Fun

Cryptsy CEO Indicted for Defrauding Crypto Investors, Destroying Evidence

News Feed - 2022-01-29 12:01:53

Cryptsy CEO Indicted for Defrauding Crypto Investors, Destroying Evidence


The CEO of cryptocurrency exchange Cryptsy has been indicted in the U.S. The 17-count indictment charges the crypto exchange executive with “tax evasion, wire fraud, money laundering, computer fraud, tampering with records, documents, and other objects, and destruction of records in a federal investigation,” the DOJ said. Cryptsy’s CEO Faces 17-Count Indictment


The U.S. Department of Justice (DOJ) announced Wednesday that Paul E. Vernon, the founder, operator, and chief executive officer (CEO) of Project Investors Inc., doing business as Cryptsy, has been indicted.


A 17-count indictment was unsealed charging Vernon, 48, “with criminal violations for his involvement in a sophisticated theft scheme involving his cryptocurrency exchange,” the announcement details, adding: The charges include tax evasion, wire fraud, money laundering, computer fraud, tampering with records, documents, and other objects, and destruction of records in a federal investigation.


According to the indictment, Vernon solicited investors to store and trade cryptocurrencies on the Cryptsy platform.


However, “Between May 2013 through May 2015, Vernon used his control over Cryptsy’s accounts, known as wallets, to steal over one million dollars from Cryptsy’s cryptocurrency wallets,” the DOJ said.


He then deposited the stolen funds into his personal crypto wallet, which he subsequently transferred to his personal bank account. The DOJ emphasized: At no time during this time period did Vernon disclose this theft of his customers’ funds from his customers’ Cryptsy wallets.


In July 2014, Vernon informed Cryptsy employees that the exchange had been hacked by unidentified hackers and more than five million dollars’ worth of bitcoin and other cryptocurrencies were stolen.


Nonetheless, the platform continued to operate normally for six months, soliciting new customers, without disclosing to them that its security had been compromised, the justice department explained.


In November 2015, Vernon abruptly moved to China and publicly told Cryptsy customers about the 2014 hack and loss of bitcoins and other cryptocurrencies.


The Department of Justice further noted that after being notified that Cryptsy was in receivership in April 2016: Vernon hacked into Cryptsy servers from a remote location, stole Cryptsy’s database containing customers’ funds, and destroyed the customer database to conceal his illicit activity.


Furthermore, the indictment alleges that Vernon attempted to evade his federal income tax obligations for 2014 and 2015. Tags in this story bitcoin ceo, Bitcoin Fraud, crypto exchange fraud, Cryptsy, Cryptsy CEO, Cryptsy CEO indicted, Cryptsy fraud, Cryptsy scam


What do you think about this case? Let us know in the comments section below. Kevin Helms


A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Turkey"s President Erdogan Instructs Ruling Party to Study Cryptocurrency, Metaverse REGULATION | 20 hours ago IRS Special Agent on Crypto: "We See Mountains of Fraud in This Area" REGULATION | 1 day ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleCoinFLEX’s New AMM+ and the Rise of Crypto Yield 2.0 Next articleBitcoin, Ethereum Technical Analysis: ETH Down 14% This Week Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItJPMorgan: Ethereum Losing Ground to Other Crypto in NFT Market Due to High Transaction Fees, Congestion


JPMorgan has told its clients that ethereum is losing ground to rival cryptocurrencies, such as solana (SOL), in the non-fungible token (NFT) market due to sky-high transaction fees on the network. "It looks like, similar to defi apps, congestion and ... read more.Tom Brady"s Autograph NFT Agency Gets $170 Million in Series B Funding Round Bank of Russia to Monitor Banks’ Dealings With Crypto Exchangers Report: A16z to Raise $4.5 Billion for Crypto Investments NYC Mayor Eric Adams Converts First Paycheck to Bitcoin and Ether via Coinbase

News Feed

Bitcoin price hits $64K as traders anticipate new all-time high before halving
Horus Hughes6 hours agoBitcoin price hits $64K as traders anticipate new all-time high before halvingBitcoin price continues its parabolic rally with a swift move to $64,000. Is a new all-time high the next stop?6627 Tot
XRP Price Confirms Bullish Reversal Setup With This Demand Zone
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Dow Futures Sink and Furious Donald Trump Rages at 'Gutless' Fed
Dow Jones Industrial Average (DJIA) futures plunged lower in early trading Thursday. It comes after the Federal Reserve cut the target base rate by 25 points, as expected. But the stock market, not to mention Donald Trum
Easy-Money Policy Continues: Fed Plans to Keep Purchasing Assets, Interest Rates to Stay Near Zero
Easy-Money Policy Continues: Fed Plans to Keep Purchasing Assets, Interest Rates to Stay Near Zero Members of the U.S. Federal Reserve discussed the possibility
Curate, Next Generation Yield Farming
Curate, Next Generation Yield Farming PRESS RELEASE. Curate decentralized platform has set the goal of maximizing the DeFi potential. The main task is to create
Shaquille O’Neal may still be in hot water over Astral NFTs, says judge
Jesse Coghlan7 hours agoShaquille O’Neal may still be in hot water over Astral NFTs, says judgeA Miami judge didn’t dismiss a claim that basketball legend Shaquille O’Neal was a “seller” of Astrals NFTs and fou
Snaky Way Presale Live: AI Meme Coin $AKE Gears Up for Bull Run
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Brayden Lindrea7 hours agoGrayscale ETH futures ETF a ‘trojan horse’ for spot Ethereum ETF: AnalystBloomberg ETF analyst James Seyffart thinks Grayscale’s Ether futures ETF application is just a ploy to corner the
Moledao Launches Pioneering Web 3.0 Hackathon on the Metaverse
Moledao Launches Pioneering Web 3.0 Hackathon on the Metaverse press release PRESS RELEASE. Moledao, a social platform for blockchain enthusiasts, announced today its upcoming Web 3
Demand for Arbitration Filed Against Genesis Global Capital, DCG — Firm Accused of ‘Ochestrating a Sham Transaction’
Demand for Arbitration Filed Against Genesis Global Capital, DCG — Firm Accused of "Ochestrating a Sham Transaction" Three Gemini Earn users have accused Genesis Global Capital o
Helen Partz13 hours agoGrayscale officially abandons post-Merge PoW Ethereum tokensOne year after the Ethereum Merge, Grayscale has finally made the decision to abandon all the rights to proof-of-work Ethereum tokens.343
Charles Schwab’s $655B Asset Management Arm to Start Trading Crypto-Related ETF This Week
Charles Schwab"s $655B Asset Management Arm to Start Trading Crypto-Related ETF This Week Charles Schwab’s $655 billion asset management arm is launching its first crypto-re