# Crypto Fraud

ALL From Crypto Fraud

NYAG Introduces Legislation to Protect Crypto Fraud Victims

The New York Attorney General’s Office (NYAG) has introduced legislation aimed at protecting cryptocurrency investors from fraud. The proposed bill would require companies dealing in digital currencies to adhere to certain standards and disclose key information to their investors.

Supposed AI-Based Crypto Token Using Musk's Image Targeted by Texas Securities Board

The Texas State Securities Board has reportedly issued a cease-and-desist order against a supposed AI-based cryptocurrency token that uses Elon Musk's image without his consent. The token, called "MuskCoin," was allegedly being marketed as an AI-based investment opportunity that leverages Musk's image and social media activity to generate returns. The Texas authorities have warned that the MuskCoin token is unregistered and therefore poses a risk to investors. The order is part of a broader crackdown by regulators on fraudulent and unregistered cryptocurrency offerings.

South African Mirror Trading's CEO Fined $3.4B by U.S. in Bitcoin Forex Fraud Case

The head of bitcoin pool operator Mirror Trading International (MTI), Cornelius Johannes Steynberg, has been ordered by a US court to pay $3.4 billion in restitution and penalties, the highest civil monetary penalty ordered in any case brought by the Commodities Futures Trading Commission (CFTC). The regulator charged Steynberg with fraud in June 2022, alleging that he accepted BTC valued at more than $1.7 billion from 23,000 Americans for running an unlicensed commodity pool scheme. MTI is undergoing liquidation in South Africa, and Steynberg is a fugitive from South African law enforcement detained in Brazil since December 2021. The order finds MTI liable for fraud and failure to comply with CPO regulations.

Leader of Miami Trio Pleads Guilty to $4M Bank, Crypto Fraud Charges

The leader of a Miami crew charged by the U.S. Department of Justice (DOJ) with defrauding banks in a 2020 cryptocurrency-related scheme has pleaded guilty, an official notice from Wednesday said.

Elderly Couple Falls Victim to a Bitcoin Scam That Costs Them £80,000

An elderly couple in the UK lost £80,000 (roughly $100,000) in a cryptocurrency scam falsely linked to UK financial expert Martin Lewis. The scammer convinced the couple to invest in Bitcoin through a series of transactions using FinTech platforms Revolut, Wise, and Binance. The couple made 14 transactions, with their “investment” purportedly doubling in value within four weeks. However, when they attempted to withdraw their funds, they were asked to pay £10,000 for capital gains tax, at which point they realized they had been scammed. Both Barclays and Revolut allegedly refused to reimburse the lost funds. The story highlights the importance of verifying investment opportunities' legitimacy and financial firms' legitimacy before making transactions. Martin Lewis's website,, as well as Barclays and Revolut, have urged consumers to remain vigilant and conduct thorough research before investing.

Crypto Fraudster Might Serve Seven Years in Prison for Allegedly Running a Shadow Bank

Damian Williams, the US attorney for the Southern District of New York, has requested a seven-year sentence for Reginald Fowler, the alleged executive in a crypto shadow banking business that operated in 2018. Fowler's case has dragged on for five years, and he was arrested in 2019 and charged with illegal money transfers, bank fraud, and conspiracy related to shadow banking practices in unlicensed money transmitting business. Williams is seeking a sentence of 15 to 20 years to show the seriousness of the offense and the need to promote respect for the law. Fowler allegedly deceived several financial institutions and allowed criminals to launder their funds through his platform, and he defrauded an upcoming football league by falsely representing the source of his wealth to acquire a stake in the club. Williams is also seeking a restitution order of $53 million to the football league's trustee and a forfeiture of $740 million.

Do Kwon Says SEC Is Out of Bounds in Pursuing Crypto Fraud Suit

Crypto entrepreneur Do Kwon’s lawyers say a US regulator’s lawsuit accusing him and Terraform Labs Pte of securities fraud is unfounded, in part, because the stablecoin at issue is a currency, not a security.

Social Media Crypto Scams

Overall, more than one in four people who reported losing money to all types of fraud in 2021 reported that it started on social media with an ad, post, or a message. The amount lost to social media scams in 2021 was five times that of 2020, and six times from 2018.

Former Investment Banker Charged for Allegedly Defrauding Crypto Investors

A former investment banker and registered broker, Rashawn Russell, has been charged with defrauding numerous investors by promising profits on fake cryptocurrency investments and misappropriating the funds received to finance his lifestyle. Russell allegedly convinced multiple investors to reinvest their fiat savings into cryptocurrencies, promising significant or "guaranteed" returns, but misappropriated their money to fund his personal lifestyle, according to court documents. Russell allegedly fabricated documents to mislead unwary investors about the status of their crypto investments, altering an image of a bank's website to depict fake balances and bank wire transfer confirmations. If convicted, Russell could face a maximum of 20 years in prison.

New York Regulator Strengthens Anti-Fraud Unit to Curb Crypto-Related Crime

The New York State Department of Financial Services (DFS) has stepped up efforts to detect fraud and other illegal activities among entities engaged in cryptocurrencies and other virtual currencies, as a government clampdown on the sector widens.