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Serbian Citizen Extradited to US to Face Crypto-Related Fraud Charges

On Friday, February 5, the US Department of Justice revealed that Serbia has handed over its citizen, Antonije Stojilkovic, 32 years old, to the United States to face charges over conspiracy to commit fraud and launder money through a crypto mining investment scam.

Acting US Attorney Prerak Shah, said:

“We are proud to bring Mr. Stojilkovic to Dallas to face justice in an American courtroom. The U.S. Department of Justice will not relent in our fight against cybercrime.”

The DOJ alleged that Stojilkovic and his six colleagues duped investors across the world – many of them live in northern Texas – out of more than $70 million.

According to the court document, Stojilkovic and his partners (five Serbian co-conspirators and one US-based co-conspirator) set up fake trading platforms from their home bases in China, Serbia, and elsewhere, and used such platforms to advertise cryptocurrency mining and binary options services to innocent investors across the globe.

The culprits operated the platforms under the names of Trinity Mining, BTC Mining Factor, Bancde Options, Options Rider, Dragon Mining, and Start Options.

The binary trading services claimed to offer an average payout of 80% and promised 20% refunds on every lost trade while the crypto mining platforms promised investors to buy Bitcoin at half market price. The $70 million scam cut across several continents, targeting US citizens and foreigners.

By displaying a respectable and convincing online presence, fake figures on their scam investment portals and a series of fraudulent withdrawal history logs and fake wire receipts, Stojilkovic and his partners made investors think that the crypto mining and binary options trading was legitimate business activities.

If found guilty, Stojilkovioc and his co-conspirators would face a maximum of 20 years in federal prison.

Apart from Serbia, there is no public information from any other nation making a similar extradition request for the culprits.

Common Crypto Scams to Avoid

The significant rise of Bitcoin’s value has attracted many people to invest in the cryptocurrency in order to get better returns. However, anyone chasing that fortune can easily fall victim to opportunistic con artists who perpetrate cryptocurrency scams.

These scams pitch themselves as investment opportunities, promising high returns, but with a catch; investors have to pay some funds to an agent, or into an account, or asked to send funds somewhere.

Such scams tend to market themselves heavily and hide their true intentions through tried and tested marketing gimmicks. Lots of them have an element of referrals, promoting it to others, or inviting others for some rewards, and their marketing agents are known to be excellent at sales and marketing.

Investors interested in Bitcoin are advised to be aware and stay alert of potential scams associated with fake Bitcoin exchanges, Ponzi schemes, fake cryptocurrencies, ransomware scams, and pump-and-dump scams.

John McAfee Found Dead in Prison After Spanish High Court Approves His Extradition to the US

Computer programming entrepreneur John McAfee has committed suicide in his Barcelona jail, just hours after a Spanish High Court approved his extradition to the United States.

The British-American McAfee antivirus inventor lived the latter part of his years due to evading American authorities for tax evasion. According to his lawyer, Javier Villalba, McAfee died after committing suicide as he could no longer handle his prison sentences.

Also renowned as the founder of the privacy coin, Ghost coin, McAfee was often involved in pump and dump schemes in the cryptocurrency ecosystem. The 75-year old also had a brawl with the United States Securities and Exchange Commission (SEC) for earning about $13 million in the promotion of Dogecoin (DOGE) and Verge (XVG).

The death of McAfee shocked the entire crypto sector on Twitter. Some people believe him as a victim under the law. On the other hand, McAfee’s wife, Janice McAfee, memories him on Twitter of celebrating him on Father’s day, lamenting the ill-treatment he was receiving and the lack of chances to get a fair trial in the United States if extradited.

While he was also being tried by the SEC, the extradition clause only factored in trials relating to tax evasions. McAfee had a chance to appeal the jurisdiction, and the entire extradition was expected to be approved by local lawmakers before it is finalised. However, Villalba said McAfee’s nine-month spell in prison had brought him despair, a condition he could no longer bear. The tax evasion charges are likely to be dropped now that McAfee is dead.

McAfee had a robust career with NASA, Xerox, and Lockheed Martin before developing the first commercial McAfee antivirus in 1987, later sold to Intel in 2011. While McAfee has no involvement with the company, the antivirus still bears McAfee’s name and is still widely used to date.

Image source: BBC

Former BitMEX Executive Agrees to be Extradited Back to the US as Trial Drags on

Former BitMEX Derivatives Exchange executive Gregory Dwyer has agreed to be extradited from Bermuda back to the United States of America,while the legal tussle indicting three other executives lingers on.

As reported by the Royal Gazette, the extradition process is still awaiting approval by governor Rena Lalgie.

The American authorities accused Gregory of being complicit in operating the BitMEX exchange without adequately registering it with the proper authorities. The Australian executive was also officially charged on October 1 in violation of the US Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act.

Former CEO Arthur Hayes surrendered to US authorities for the prosecution earlier in the year. Alongside Hayes, Benjamin Delo and Samuel Reed, the other parties indicted, had appeared in court since the case started, leaving Gregory as the outstanding man. The other three executives had been granted bail in varying sums as the case drags on. Despite his absence from the court, Gregory’s spokesman noted that the Australian cooperated with the authorities.

“Mr. Dwyer continues to work with the government to ensure a smooth process for his appearance in New York and has every intention of defending himself against these meritless charges,” the spokesman noted.

Should Gregory Dwyer be found guilty of the charges, he and his colleagues could bag up to 5 years in jail. While this may be the worst-case scenario, the case may end up with settlements paid to the relevant authorities just as the mother exchange did when it agreed to pay $100 million in settlement to the Commodity Futures Trading Commission (CFTC) back in August.

The ongoing case highlights the continuous clampdown on cryptocurrency-related entities in the US. While the BitMEX case involved the CFTC, blockchain payments firm, Ripple Labs Inc, battling a legal issue with the Securities and Exchange Commission (SEC) since the firm was accused of selling unregistered XRP securities. These and more cases have pushed stakeholders in the crypto ecosystem to nudge the relevant authorities to provide the proper oversight for the industry.

Latvian National Extradited to the U.S for Crypto and Wire Fraud

Ivars Auzins, a Latvian citizen, accused of committing securities and wire fraud using eight companies that were alleged to mine or invest in crypto assets, was extradited to the United States to face a six-count indictment charge.

Breon Peace, the United States Attorney for the Eastern District of New York, pointed out:

“Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency.”

He added:

“This office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.”

The indictment noted that Auzins concealed his identity through aliases. As a result, he operated “Auzins Entities,” which advertised crypto mining and investments through websites, social media, and email campaigns. Per the announcement:

“Some of the Auzins Entities – Denaro and Bitroad Limited – purported to raise funds from investors through initial coin offerings (ICOs). Other Auzins Entities purported to be cryptocurrency investment platforms that provided investors with different investment plans and profit rates.”

The Auzins Entities were able to siphon more than $7 million in crypto assets from investors in the U.S. and other places. This happened between November 2017 and July 2019, and soon after, the Auzins Entities went underground.

Meanwhile, a recent report by blockchain analytic firm Chainalysis pointed out that crypto scams had nosedived by 65% in 2022.

The drop in scam revenue was linked to Bitcoin’s bearish momentum, which has seen the leading cryptocurrency decline by at least 70% from its all-time high (ATH) price of $69K recorded in November last year.

The Chainalysis report highlighted that people falling for crypto scams had declined.

Former OneCoin Executive Charged with Fraud

The United States Department of Justice has charged Irina Dilkinska, a former executive of the fraudulent cryptocurrency scheme OneCoin, with wire fraud and conspiracy to commit money laundering. Dilkinska, who was extradited from Bulgaria, now faces up to 40 years in prison for her alleged role in aiding the laundering of over $400 million of OneCoin’s proceeds.

OneCoin was a cryptocurrency scheme that has been accused of being a Ponzi scheme and a fraudulent operation. The scheme was founded in 2014 by Ruja Ignatova, who was later indicted by the US government for her role in the scheme. Ignatova is currently a fugitive, and her brother, Konstantin Ignatov, has pleaded guilty to his role in the scheme.

Dilkinska was OneCoin’s former head of legal and compliance and is accused of aiding in the laundering of OneCoin’s proceeds. According to the Department of Justice, Dilkinska allegedly destroyed incriminating evidence and sent incriminating messages upon hearing of a co-conspirator’s arrest. Each count of wire fraud and conspiracy to commit money laundering carries a maximum potential sentence of 20 years in prison.

The OneCoin scheme has been accused of defrauding investors of billions of dollars, and the US government has been actively pursuing legal action against those involved in the scheme. The scheme operated by convincing investors to buy OneCoin tokens, which were then traded on the OneCoin exchange. However, the exchange was found to be fraudulent, and the tokens were worthless.

The OneCoin scheme has been the subject of numerous investigations and legal actions around the world. In addition to the charges against Dilkinska and Ignatova, several other individuals have been indicted in connection with the scheme. The US government has also seized millions of dollars in assets and bank accounts connected to the scheme.

The case against Dilkinska is another example of the US government’s commitment to pursuing those involved in fraudulent cryptocurrency schemes. The government has been increasing its efforts to regulate the cryptocurrency industry and crack down on fraudulent schemes in recent years. The Department of Justice has created a cryptocurrency enforcement framework to help prosecutors identify and investigate cryptocurrency-related crimes.

In conclusion, the charges against Dilkinska highlight the ongoing legal action against those involved in the OneCoin scheme. Dilkinska faces a potential prison sentence of up to 40 years for her role in aiding the laundering of OneCoin’s proceeds. The case is another example of the US government’s efforts to crack down on fraudulent cryptocurrency schemes and regulate the cryptocurrency industry.

South Korean Court Denies Arrest Warrant for Terraform Labs Co-Founder

A South Korean court has denied a request for an arrest warrant for Terraform Labs co-founder, Shin Hyun-Seong, also known as Daniel Shin. This marks the second attempt by South Korean authorities to bring Shin in for questioning, following the recent arrest of Terraform Labs’ other co-founder, Do Kwon.

Kwon was arrested at Podgorica airport in Montenegro on March 23 while attempting to use fake documents to travel abroad. The Seoul Southern District Prosecutors Office took advantage of this situation and requested an arrest warrant for Shin on March 27, citing his involvement in cashing in illicit profits from Terra (LUNA) and TerraUSD (UST) sales.

However, the Seoul Southern District Court denied the request, citing unconfirmed allegations and the unlikelihood of Shin being a flight risk or destroying evidence, according to local media Yonhap.

Shin currently faces multiple fraud charges, specifically in relation to allegedly hiding risks associated with investing in Terraform Labs’ in-house tokens. The denial of the arrest warrant is a setback for South Korean authorities attempting to bring Shin to justice.

Following Kwon’s arrest in Montenegro, authorities from both the United States and South Korea have attempted to extradite the entrepreneur. However, determining to which state he will be extradited is based on several factors, according to Montenegro’s Minister of Justice, Zoran Kovač.

“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Kovač through an interpreter.

Terraform Labs is a blockchain company that has gained popularity for its decentralized stablecoin, UST, which is built on the Terra blockchain. The company has been involved in several high-profile partnerships, including with Binance, OKEx, and Huobi. However, the recent arrests of both of its co-founders have raised concerns about the company’s future and the integrity of its operations.

Terraform Labs has stated that it is cooperating with authorities and is committed to maintaining the highest standards of compliance and transparency. The company has also emphasized that its products and services remain unaffected by the ongoing legal proceedings.

The denial of the arrest warrant for Shin is likely to result in further scrutiny of Terraform Labs’ operations by regulatory authorities in South Korea and other countries. As the blockchain industry continues to grow and mature, incidents of fraud and non-compliance are likely to come under increasing scrutiny, and companies will need to be proactive in demonstrating their commitment to legal and ethical standards.

Terraform Labs Co-Founder Argues Against SEC Lawsuit

In recent news, Terraform Labs co-founder Do Kwon’s lawyers have made arguments in court against the US Securities and Exchange Commission’s (SEC) lawsuit alleging that Kwon illegally offered unregistered securities to US investors. Kwon’s lawyers have requested the lawsuit be dismissed, citing that US law prohibits regulators from using federal securities law to assert jurisdiction over the digital assets in the case. According to Bloomberg, the lawyers also claim that the SEC has failed to prove that Kwon defrauded US investors in connection with the $40 billion collapse of TerraUSD (UST) and Luna (LUNA) cryptocurrencies. The lawyers argue that the stablecoin in question is a currency and not a security.

The legal proceedings began when Kwon was arrested in Podgorica airport, Montenegro, on March 23, while attempting to fly to Dubai using fake documents. Following his arrest, both South Korean and American authorities requested the entrepreneur’s extradition. At present, it is unclear which country, if any, will be granted the extradition of Kwon.

The Seoul Southern District Court recently denied an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. Although prosecutors saw Kwon’s arrest as an opportunity to apprehend Shin, the court denied the request citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

Montenegrin Justice Minister Marko Kovač, through an interpreter, stated that determining to which state Kwon would be extradited would be based on several factors such as the severity of the committed criminal offense, the location and time when the criminal offense was committed, the order in which the request for extradition was received, and several other factors.

Terraform Labs, which is behind the development of the Terra blockchain and several stablecoins, has gained attention in the cryptocurrency industry in recent years. The company has been working on a variety of projects, including an online marketplace and decentralized finance applications. The SEC lawsuit against Kwon is just one of several legal battles that the company has been involved in, including a lawsuit filed by the South Korean financial watchdog against the company’s stablecoin, Terra.

In conclusion, the legal battle between Do Kwon and the SEC is ongoing, and the outcome remains uncertain. However, Kwon’s lawyers’ arguments that the stablecoin in question is a currency and not a security may have implications for the broader cryptocurrency industry. Additionally, the issue of Kwon’s extradition remains unresolved, and it is unclear which country, if any, will be granted the request for his extradition. The Terraform Labs legal battles highlight the regulatory challenges faced by the cryptocurrency industry as it continues to grow and develop.

SEC Agrees to Delay Terraform Labs Trial, Awaiting Do Kwon's Extradition

The United States Securities and Exchange Commission (SEC) has consented to postpone the trial of Terraform Labs and its co-founder, Do Kwon, pending Kwon’s extradition. This follows a filing by the SEC on January 15, 2024, in the U.S. District Court for the Southern District of New York. The trial, originally scheduled to commence on January 29, is now proposed to start no earlier than March 18, 2024.

Kwon, currently in Montenegro following his arrest in March 2023, is facing charges for allegedly orchestrating a $40 billion cryptocurrency fraud. The SEC, fully prepared to proceed with the trial, joined Kwon’s legal team in requesting the adjournment to ensure his participation in the trial. The Terraform Labs co-founder’s legal team, dealing with the complexities of extradition, suggested that Kwon could be in the United States by mid-March. If the trial is postponed, the SEC has requested that it commence on April 15, 2024.

The allegations against Terraform Labs and Kwon stem from the collapse of TerraUSD, a stablecoin designed to maintain a constant $1 price, and Luna, a closely linked token. Both cryptocurrencies suffered a catastrophic loss in May 2022 when TerraUSD failed to maintain its peg, leading to a market loss of $40 billion or more. This event marked a significant downturn in the crypto market that year and had far-reaching implications in the industry.

Furthermore, Terraform Labs and Kwon are accused of misleading investors about the stability of TerraUSD and its usage in a popular Korean mobile payment app. In addition to the SEC’s civil case, Kwon also faces criminal charges in the U.S. and an extradition request from South Korea. The outcome of this trial could significantly impact the regulatory landscape of cryptocurrencies, given the scale of the alleged fraud and the involvement of multiple international jurisdictions.

South Korea's Police Agency Requests INTERPOL's Assistance for Extradition of Terra's Do Kwon

South Korea’s National Police Agency has officially requested the International Criminal Police Organization’s (INTERPOL) assistance to extradite Do Kwon, the CEO of Terraform Labs, back to his home country. This development comes in the wake of a Montenegrin court’s decision to overturn a prior ruling for Kwon’s extradition to the United States, favoring a potential return to South Korea due to earlier extradition requests.

Montenegrin Court’s Decision and South Korea’s Response

On March 7th, 2024, the Montenegrin Appeals Court sent back the case to the primary court, reversing a prior decision that would have seen Kwon extradited to the United States. The reversal was based on the timeline of extradition requests, where South Korea’s request predated that of the U.S. by mere days.

Following this development, South Korea’s law enforcement has been proactive in reinforcing its position. The National Police Agency, through the Korean INTERPOL National Central Bureau, has sent a message to INTERPOL’s General Secretariat, urging the organization to ensure that Kwon is extradited to South Korea.

Terra Luna Crisis

Do Kwon is a central figure in the collapse of the Terra-Luna cryptocurrency, which saw billions of dollars in market value wiped out overnight. The incident had a catastrophic impact on global investors, with estimates suggesting losses exceeding 50 trillion won (over 40 billion USD), including the significant damage inflicted upon approximately 200,000 domestic investors.

Kwon’s legal troubles began when he fled to Singapore in April 2022, shortly before the cryptocurrency’s value plummeted. He was subsequently apprehended in Montenegro in March 2023 on charges of using a forged passport. Since then, Kwon has been detained in Montenegro, with his legal status being a subject of international contention.

The International Extradition Process and Its Complexities

Extradition is a complex process, often influenced by international relations, the severity of alleged crimes, and the legal frameworks of the countries involved. In Kwon’s case, the process is further complicated by the competing requests from both South Korea and the United States.

As South Korea steps up its efforts to bring Kwon to justice, the international community is closely monitoring the situation. The case not only serves as a significant legal precedent for international crimes involving cryptocurrencies but also highlights the need for global cooperation in regulating and overseeing the digital asset industry.

Looking Ahead

The South Korean government, along with the Ministry of Justice, the Ministry of Foreign Affairs, and the National Police Agency, continues to coordinate efforts to ensure Kwon’s extradition. The final decision now rests in the hands of the Montenegrin judiciary and INTERPOL’s subsequent actions based on the appeals from South Korea.

This case underscores the growing need for international legal frameworks that can effectively address the borderless nature of cryptocurrency-related crimes. As the legal saga unfolds, it also serves as a cautionary tale for the crypto industry at large, emphasizing accountability and the potential reach of law enforcement across national boundaries.

Conclusion

The request for INTERPOL’s assistance by the South Korean Police Agency marks a significant step in the ongoing legal proceedings against Do Kwon. It reflects the country’s determination to hold individuals accountable for their actions in the cryptocurrency space, setting a precedent for future cases of a similar nature.

The legal outcome of this case could have far-reaching implications for the governance and regulation of the cryptocurrency industry, as nations grapple with the challenges of pursuing justice across jurisdictions in an increasingly digital and decentralized financial landscape.