ZoneBitcoin Editorial
The cryptocurrency industry has become a playground for many criminals. Hacks and attacks on cryptocurrency projects have increased exponentially in recent years, with a total of $3,8 billion stolen in 2022, according to the “ Crypto Crime Report » published by Chainalysis.
Scammers are using more and more means to deceive investors, making it more difficult for authorities to track them down. What makes the task even more difficult is that some of these criminals managed to escape by changing their identities and living comfortably off their illegal earnings. Even more, others have escaped prosecution by invoking bankruptcy filings while their companies operated on a Ponzi scheme.
In this article, we will focus on the 7 most wanted criminals by the FBI, Interpol or other national agencies.
Alex Mashinsky – The founder of Celsius
Alex Mashinsky, the founder and former CEO of the cryptocurrency lending site called Celsius Network. It was the most popular site in the cryptocurrency industry and its fall shook the sector badly.
Mashinsky, 57, was indicted on seven counts – including securities fraud, commodity fraud and wire fraud. Similarly, Celsius' former COO Roni Cohen-Pavon was indicted on four counts as well.
Prosecutors and federal regulators have accused Mashinsky of misleading customers and artificially inflating the value of his New Jersey-based company's crypto token. The company is accused of having deliberately manipulated the price of the CEL token by carrying out massive purchase/resale operations.
Alex Mashinsky was arrested recently, in July 2023 and the prison sentence is not yet known. The Federal Trade Commission announced a civil settlement with Celsius and its affiliates for $4,7 billion. Under the terms of the agreement, payment is suspended to allow Celsius, which has filed for bankruptcy, to return money to its customers. At this time, we cannot provide any certainty regarding the recovery of lost amounts.
Do Kwon – The Fugitive from Terra
If you have been active in the world of cryptocurrencies for a while, you have certainly felt the effects of the fall of the Terra blockchain. This brutally marked the bear market from hell 2022 which -even today- is still present.
do kwon, the man behind the collapse of an entire ecosystem valued at over $60 billion, was recently arrested. In September 2022, South Korean authorities issued an arrest warrant against him. At the time, Do Kwon was supposed to be in Singapore. However, an official in the city-state said he was no longer in the country and had fled to Dubai. At the end of September, Interpol joined the search for Do Kwon by issuing an international wanted notice.
Known for his arrogance, Do Kwon had claimed on Twitter that he was not on the run, but that he was not revealing his location for "security reasons."
However, South Korean authorities sent two officials to the Balkans to find the deposed CEO and bring him to justice and he was eventually found in the Balkans, in Montenegro to be exact.
However, despite this, Do Kwon claimed
Ruja Ignatova – The so-called “CryptoQeen”
Ruja Ignatova is responsible for one of the biggest scams in the history of cryptocurrencies, with the OneCoin project. Launched in 2014, the project promised lucrative returns and attracted the attention of millions of investors. However, in 2017, once the coffers were sufficiently full, Ruja and her accomplice Sebastian Greenwood fled with the investors' funds. In total, it is estimated that the so-called "Crypto Qeen" fled with a jackpot of $4 billion.
You should know that the Bulgarian entrepreneur has been on the run ever since. In June 2022, the FBI added Ignatova to its list of most wanted criminals in the crypto industry. There is even an official reward of $100 for whoever finds it. Some say that she would have carried out cosmetic surgery and that she would have several passports in order to escape searches.
After five years of searching, authorities finally found a lead in the case. Ignatova was named in a property document for the sale of a $13,6 million penthouse in Kensington, England. Ruja Ignatova's luck could well be changing and she could be apprehended by the police...
The Cajee brothers – The biggest jackpot of 2021
Ameer and Raees Cajee are behind one of the biggest cryptocurrency scams that broke out in 2021. The two brothers created a cryptocurrency exchange platform in Johannesburg, South Africa, called " africrypt » in 2016. It quickly became a growing success, attracting millions of investors.
However, in April 2021, the Cajee brothers said the platform was attacked by Ukrainian hackers, who allegedly took away most of the funds deposited by investors. They later claimed their family began receiving death threats, forcing them to flee the country.
However, after numerous investigations, users and law enforcement agencies discovered that the entire operation was just a huge scam and that the Cajee brothers were behind this hack. They disappeared with the bitcoin equivalent of nearly $3,6 billion.
As of this writing, the two brothers are still on the run, and their whereabouts are still unknown. According to Bloomberg, it is the biggest cryptocurrency fraud in history.
Satish Kumbhani – The founder of BitConnect
The "BitConnect" project was the first crypto project to operate on a Ponzi pyramid. The name "bitconnect" alone evokes the crypto scam as it has left its mark on minds and wallets... Launched in 2016, the project had attracted millions of investors taking advantage of a bull run that collapsed in early 2018. The platform presented itself as a cryptocurrency lending platform that allowed the generation of lucrative returns through the possession of a token called Bitconnect coin (BCC). The company reportedly filed for bankruptcy, taking with it more than $2000 million in bitcoin.
In February 2022, the US Department of Justice indicted Satish Kumbhani with a maximum total sentence of up to 70 years in prison.
Even today, Satish Kumbhani is on the run and is a crypto criminal who is most wanted by the authorities.
Sam Bankman-Fried: The Alleged Philanthropist
Here again, we are dealing with a large-scale white-collar criminal, namely Sam Bankman Fried. He founded the FTX exchange, which quickly rose to become one of the largest crypto exchanges. Ranked by Forbes, as the most promising entrepreneurs under 30, he had become in the space of just three years, a freed and adored crypto-billionaire.
Loved by the community novice traders, he created a personality of a benefactor, assuring that he was not seeking personal wealth. He had declared on several occasions that he wanted to distribute his colossal fortune to charities… From then on, doubts about his true intentions of " robber baron " had been revealed before the company's sudden collapse. In this regard, The New York Times speaks of " mountain of evidence " on Sam-Bankman Fried's misdeeds. This showed that the crypto enthusiast community was still immature and heavily blinded by the profits that the FTX founder promised.
Behind the fine speeches, the FTX platform suddenly collapsed some time after the dramatic fall of Terra Blockchain. In a devastating domino effect, the company could no longer maintain its operations. Sam Bankman Fried is accused of insider trading, which allegedly allowed him to profit from lucrative transactions on a personal basis.
Sam Bankman-Fried went down in history as the most hypocritical crypto criminal as he worked on an image of a philanthropist. The fall of FTX and hundreds of crypto companies that were linked to it marked the longest of bear markets in the history of cryptocurrencies. Today, more than $8 billion in FTX customer deposits are frozen although attempts to recover the funds are currently underway, but no certainty can be provided at this time.
Sam Bankman-Fried was arrested on December 12, 2022, in the Bahamas. He was nevertheless able to get out by paying bail while the investigation took place.
Mark Karpeles: The French Bitcoin Baron
Mark Karpeles was certainly the first high-profile crypto criminal. However, the word “criminal” may not be appropriate for Mark Karpeles as he has always pleaded innocence. He is the founder of the infamous Mt. Gox exchange. This has been one of the first exchanges to buy bitcoin which was launched in 2011 when the market was still in its infancy.
-Read the article : This is the history of the first Bitcoin exchanges
Mt Gox has become one of the largest bitcoin exchange platforms, draining hundreds of millions of dollars in bitcoin. However, in 2014, a hack occurred resulting in the loss of over 850,000 bitcoins. This caused a terrible shock wave throughout the sector, making Mark Karpeles the first suspect in the eyes of the Japanese authorities.
The so-called "bitcoin kingpin" was arrested in Japan in 2015 for embezzlement and concealment of information and was sentenced to two years in prison. Karpeles was widely blamed for the collapse by the community of bitcoiners and distrust of centralized platforms has crystallized since this event.
Mark Karpeles' trial has been long and tedious and the victims' losses have still not been reimbursed. However, after being released from prison in 2016, Mark Karpeles maintained his innocence and assured that the victims would regain part or all of their funds in the more or less near future.
According to BFM TV, the former bitcoin baron is reportedly preparing his return to the crypto industry. Will he one day be cleared of his former activities? Only time will tell…
Conclusion
This list only concerns the biggest criminals known to the crypto industry, it is of course (and unfortunately) not an exhaustive list. There are a lot of scams and scam sites Ponzi whose authors have not yet been identified.
In this article, we also did not cite cases of white-collar fraudsters posing as serious, legitimate entrepreneurs. These are people who take advantage of the ignorance of newcomers to the industry by creating companies with convoluted business models. We can mention, for example, the projects of memes corners and shitcoins proven scams which are not recognized scams but which nevertheless have the same purpose.
There is also the fact of many individuals who sell or make the promotion scams without even knowing it, as this appears to be a legitimate project.
These are certainly the most dangerous scams in the sense that they silently kill many victims. Entrepreneurs take away customers' funds and file for bankruptcy under the pretext that the company is experiencing financial difficulties...
In conclusion, it is important to remain vigilant and not succumb to the sirens of returns. It is equally important not to judge an entrepreneur on glowing articles or on his notoriety on social networks. These are only “vanity metrics” that do not allow us to decide on the viability of a project.
Before investing, check smart contract audits, business model and other criteria of good fundamental analysis. These simple steps can save you from being yet another victim of crypto criminals like the ones mentioned above. Law enforcement agencies continue to hunt down these criminals, and let's hope that justice is one day served to the victims.
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Disclaimer: This is not investment advice. Always do your own research before investing.
