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Last Month’s U.S. Crypto Crime Recap A Recap of Last Month’s U.S. Crypto Crime Log

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While our attention was focused on exchange-traded funds earlier this month, federal regulators in the U.S. announced charges or sentences for various crypto parties.

Youโ€™re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The Story Unfolds

Remember when it felt like an initial coin offering was getting sued nearly every other week? January has been downright silent in comparison.

Why Itโ€™s Significant

Itโ€™s always worth keeping an eye on the happenings in the regulatory realm.

Breaking Down the Cases

  • The U.S. Securities and Exchange Commission charged the CEO of Future FinTech, Shanchun Huang, โ€œwith manipulative tradingโ€ and โ€œfailing to disclose his beneficial ownershipโ€ in Future FinTech prior to becoming the companyโ€™s CEO in 2020. Future FinTech acquired a Chinese bitcoin mining firm in 2021 (though this wasnโ€™t part of the SEC complaint). Future FinTech also called itself โ€œa leading blockchain-based e-commerce businessโ€ in a press release that year. Its website now refers to itself as โ€œa comprehensive financial and digital technology service provider,โ€ that does mention various cryptocurrency bits in its โ€œabout usโ€ page.
  • The Commodity Futures Trading Commission charged a company called Debiex and an individual named Zhang Cheng Yang with misappropriating customer funds.
  • A federal judge sentenced Marco Ruiz Ochoa, a promoter for IcomTech, to five years in prison, two years of supervised release and nearly $1 million in forfeiture. IcomTech was a crypto ponzi scheme, the Department of Justice alleged, and Ochoa pled guilty to conspiracy to commit wire fraud last September.
  • Raul Rodriguez, who used LocalBitcoins to convert bitcoin and other cryptos for customers, pled guilty to operating an unlicensed money transmitting business. The DOJ alleged he converted more than $5 million over a 6-year period in Florida.
  • Mark Scott, a former partner at law firm Locke Lord LLP, was sentenced to 10 years in prison after being convicted over four years ago of laundering some $400 million for OneCoin, a multilevel marketing scam youโ€™ve probably heard of.
  • And finally, the DOJ published a notice about Sam Bankman-Friedโ€™s sentencing, currently set for March 28, 9:30 a.m. before Judge Lewis Kaplan. Anyone who believes they are a victim of Bankman-Fried is invited to write a victim impact statement.

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Tuesday

  • The U.K.โ€™s Financial Conduct Authority faces a deadline for its stablecoin consultation.

Thursday

  • 14:00 UTC (9:00 a.m. ET) Treasury Secretary Janet Yellen will present the Financial Stability Oversight Councilโ€™s annual report to the Senate Banking Committee.

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If youโ€™ve got thoughts or questions on what I should discuss next week or any other feedback youโ€™d like to share, feel free to email me at [email protected] or find me on Twitter @nikhileshde.

You can also join the group conversation on Telegram.

See yaโ€™ll next week!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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