Over the previous yr, many outstanding and colourful crypto personalities have been apprehended and arrested. From the jailing of antivirus pioneer John McAfee to the laying of prices towards executives from one of many world’s largest exchanges, 2020 didn’t precisely shake off crypto’s popularity as a honeypot for criminals.

Over the primary ten months of 2020, blockchain forensics company CipherTrace estimates that losses from thefts, hacks, and frauds totalled a whopping $1.8 billion, a determine fueled partly by the rise of varied DeFi platforms.

The report means that 2020 is on monitor to file the second-highest worth in losses linked to cryptocurrency crimes, trailing 2019, when proceeds of these crimes exceeded $4.5 billion.

Let’s take a better take a look at a few of the highest-profile figures embroiled in authorized points this yr.

Arthur Hayes goes lacking following DoJ prices

On Oct. 1, the USA Division of Justice (DoJ) filed felony prices towards BitMEX founder Arthur Hayes in addition to three of his associates for violating the Financial institution Secrecy Act. Compounding their issues, the US Commodity Futures Buying and selling (CFTC) filed a civil enforcement motion towards Hayes and his firm for flouting AML rules.

The Hong Kong resident has been MIA in public since and is but to resurface. However in a stroke of fine fortune for Hayes, he won’t be compelled to face the music anytime quickly, as the USA and Hong Kong have suspended their extradition agreements in gentle of the current political turmoil there.

The DoJ alleged that BitMEX had been engaged in quite a lot of shady actions and had weak Anti-Cash Laundering (AML) and Know Your Buyer (KYC) insurance policies that would simply be misused by third-party actors.

BitMEX was additionally accused of working a fancy worldwide company construction with places of work in premium worldwide locations reminiscent of New York, Hong Kong whereas claiming to be registered and based mostly out of Seychelles.

After the information broke BitMEX announced the departure of Hayes as the corporate CEO, together with chief technical officer Samuel Reed and the top of enterprise growth Greg Dwyer.

‘Star’ Xu’s mysterious absence defined

Outstanding cryptocurrency alternate OKEx copped plenty of flak after it suspended crypto withdrawals on Oct. 16, successfully barring prospects from taking out their crypto holdings.

Stories surfaced that the suspension was associated to the alternate’s Chinese language co-founder Mingxing “Star” Xu being arrested by native authorities — though the alternate vigorously denied that was the difficulty.

After being unreachable for greater than thirty days, Xu finally made a media appearance on WeChat on Nov. 19. He revealed that he’d been aiding related authorities investigating OK Group’s “backdoor itemizing in 2017” by which the alternate had sought to accomplice with an “undisclosed third occasion entity” in order to make its choices accessible to shoppers everywhere in the world. Xu indicated that after having checked out his prior enterprise engagements, investigators had lastly clarified the matter and given him the all clear.

After a month, OKEx lastly re-enabled crypto withdrawals on Nov 27.

John McAfee’s Spanish cruise involves an abrupt finish

Tech savant, crypto evangelist, and eccentric millionaire John McAfee has been main the crypto hype prepare for what seems like time immemorial now. In 2017, he famously proclaimed that inside 36 months, Bitcoin would hit a worth of $1 million or he’d “eat my d**okay on nationwide tv.” He retracted his assertion earlier this yr to the reduction of most individuals.

McAfee was detained in Barcelona by native authorities in October in regard to tax evasion prices levied by the US authorities towards him. He was additionally charged over fraudulently selling a sequence of questionable cryptocurrency tasks, from which he allegedly profited tens of millions of {dollars}.

Prosecutors declare that McAfee failed to file his tax returns for four years running, even whereas he raked in tens of millions of {dollars} from his consulting work, talking engagements, digital foreign money investments, and so on. In accordance with a statement released by the US Justice Department, McAfee illegally siphoned his earnings from numerous financial institution accounts and cryptocurrency alternate accounts within the names of various nominees. He’s additionally accused of not declaring numerous costly belongings together with a yacht and actual property.

This isn’t the primary time McAfee has been in trouble with the law. Again in 2012, he was questioned by police after his title was linked with the demise of his neighbor, Florida businessman Gregory Faull. In 2019 he was ordered to pay $25 million in a wrongful death lawsuit filed by the property, however refused, saying: 

“I’ve not responded to a single considered one of my 37 lawsuits up to now 11 years.”

If convicted of the brand new prices, he might withstand 30 years in jail.

Santiago Fuentes’ billion-dollar scheme collapses

Spanish nationwide, Santiago Fuentes, was the operator of a cryptocurrency arbitrage agency referred to as Arbistar which had tens of 1000’s of customers investing Bitcoin into its arbitrage buying and selling bot. Blockchain investigations agency Tulip Research reported that since its inception, the agency had raised greater than $1 billion in Bitcoin.

Suspicions arose in September when Fuentes claimed that resulting from a “digital error”, Arbistar’s native buying and selling module had been by some means disabled, wiping out greater than 1 / 4 of the corporate’s funds in a single day.

In the midst of their investigations, Spanish authorities decided that Fuentes had been making use of his crypto outfit to allegedly facilitate numerous monetary frauds and to launder cash. Tulip Analysis traced again a few of Arbistar’s withdrawal exercise to a deep net market referred to as ‘Hydra’.

Fuentes was arrested in October and has been charged with monetary fraud and cash laundering. On Dec. 13 legal professionals representing 130 former shoppers mentioned they’d misplaced 4 million euros ($4.86M) between them, with Spanish media suggesting that in complete, 32,000 people had lost 93.4 million euros ($113.5M).

Matthew Piercey’s daring sea scooter escape

The 44-year-old Shasta County, California man was arrested by the FBI on Nov 16. whereas making an attempt to flee from authorities utilizing a sea scooter.

Native media retailers reported that Piercey was able to evade agents for over an hour by first rushing off in a truck after which abandoning the automobile on the sting of Lake Shasta the place he used a sea scooter — an underwater cellular system that may sometimes attain a most velocity of 5mph —  to proceed to evade police underwater for 25 minutes. He was arrested when he emerged.

Police allege that Piercey solicited $35 million for crypto mining and different investments by means of Household Wealth Legacy LLC and Zolla Monetary LLC.

The 2 corporations reportedly focused rich traders, acquiring a minimal of $50,000 from every shopper. Nonetheless Piercey reportedly admitted that he had little to no understanding of cryptocurrencies.

He reportedly spent $2.5 million obtained by way of his schemes, renovating two of his properties and paying off his bank card payments. He’s now at present going through a number of prices of wire fraud, mail fraud, cash laundering and witness-tampering. If discovered responsible, Matthew might face life in jail.

Harpreet Singh Sahni is introduced down by Indian sleuths

Through the years, Sydney-based socialite and live performance promoter Harpreet Sahni constructed a popularity as a person who often rubbed shoulders with Australia’s elites together with ex-Prime Minsters reminiscent of Tony Abbott and Julia Gillard, the previous Premier of New South Wales Mike Baird, and former cricketer Glenn McGrath.

However in October, Indian police authorities claimed that Sahni and his shut aides had allegedly swindled around $50 million from shoppers. He was selling a scheme referred to as “Plus Gold Union Coin” (PGUC), which promised to ship earnings ranging between $5,000 to $8,000 per day to backers.

Traders who tipped round $7,000 in PGUC, had been advised they might doubtlessly rake in additional than $100,000 inside a yr. Traders needed to lock right into a 12-month contract throughout which they could not money out their crypto holdings. Nonetheless, as PGUC’s reputation grew, token holders started to develop suspicious.

The PGUC web site would go offline for weeks at a time and when the foreign money plummeted, there was no manner for traders to reduce their losses or withdraw their belongings. The invested cash — estimated to be round $50 million — disappeared, with all correspondence stopped with shoppers.

Sanhi now faces roughly 24 years in jail and is awaiting his sentencing.

Conor Freeman’s million-dollar Bitcoin ploy

The US Division of Homeland Safety recognized Dublin-based IT skilled Conor Freeman as the person behind a theft involving more than $2 million worth of crypto. He was arrested by Homeland Safety officers on Nov. 16  and compelled at hand over greater than 142 Bitcoin.

Freeman was reportedly working with a gaggle capable of acquire entry to the e-mail addresses and telephone numbers of victims by way of numerous social media platforms. Additionally they had contacts contained in the telecom business, enabling them to provoke subtle SIM-swap assaults.

That’s the place a rip-off artist is ready to receive a SIM card that’s straight linked to their sufferer’s cellular quantity, enabling them to realize entry to a person’s 2FA messages and One Time Passwords which might be used to validate identities and approve bigger monetary transactions.

Freeman pleaded responsible to stealing cryptocurrencies price $1.92 million from Emmy award-winner Seth Shapiro — producer of The Sport Changers, The Chosen One — in addition to illegally acquiring a further $250,000 from two different victims, Michael Templeman and Darran Marble.

Your complete Plustoken crew

Earlier this yr in July, Chinese language police took 109 folks into custody in reference to the Plustoken Ponzi scheme. Twenty seven of them — together with Chen Bo, Luu Jianghua, Lu Jianghua, Lu Qinghai, Jin Xinghai, Wang Yin, and Zhang Qin — had been allegedly the scheme’s masterminds, whereas the remaining 82 folks arrested held smaller roles throughout the group.

The Plustoken rip-off raked in an estimated $5.7 billion from greater than two million traders. Primarily based out of China, the mission introduced itself as being a cryptocurrency pockets that supplied excessive returns if customers bought PLUS tokens with both BTC or ETH.

In 2019, key members moved giant quantities of crypto out of the platform, with 25,000 BTC despatched to varied addresses together with Bitcoin mixers between Feb and March and in June, 789,534 ETH was transferred from the agency’s coffers. Nonetheless, by the top of the yr, your entire scheme had been uncovered, and by July 2020, the mission had been taken down by Chinese language police.

In November the Jiangsu Yancheng Intermediate Individuals’s Court docket revealed that authorities had confiscated 194,775 BTC, 833,083 ETH, 487 million XRP, 79,581 BCH, 1.4 million LTC, 27.6 million EOS, 74,167 DASH, 6 billion DOGE and 213,724 USDT — estimated to be price $4 billion. Earlier this month Chen Bo and 13 of his co-conspirators had been sentenced to jail phrases ranging between two and 11 years.