This week, a resident of New York was fined $36 million for scamming investors in a crypto and forex scheme.
Hundreds of crypto mining equipment were seized by authorities in Argentina from a smuggling ring.
The SEC is now investigating Elon Musk for over his $44 billion Twitter purchase.
The crypto world is no stranger to controversy. This week has barely begun, and we have already seen a series of hacks, scams and arrests involving crypto.
Here is the latest scoop on happenings in the industry, including crypto fraud, smuggling rings, and an ongoing investigation into high-profile figures like Elon Musk.
This week, a federal judge hit William Koo Ichioka, a New York resident, with a massive fine.
Ichioka now has to pay $36 million for scamming investors in a crypto and forex scheme, according to reports from the U.S. Commodity Futures Trading Commission.
The commission reported that Ichioka tricked investors into his scheme by promising them 10% returns every 30 business days, from far back in 2018.
While Ichioka did invest some of these funds he collected in crypto as promised, he spent much of the investor funds on personal expenses.
Some of these included jewelry, watches, and rent for his residence.
Upon his arrest, the court demanded that the accused pay a whopping $31 million in restitution to the victims.
Alongside this, he is expected to pay an additional $5 million as a civil monetary penalty.
This comes amid an earlier order in August of last year, which permanently banned Ichioka from trading in any CFTC-regulated markets.
Agencies like the CFTC and the US Department of Justice are actively on the lookout for individuals and entities who promise investors unreasonably high returns on crypto investment.
Earlier in the year, Thomas John Sfraga from Brooklyn was charged with wire fraud for the same reason.
Sfraga reportedly promised investors an even more unrealistic 60% return in just three months.
The same was the case with crypto trading instructor Brian Sewell, who misled students into investing $1.2 million in a similar scam.
So far, reports from the FBI have revealed that Americans lost $5.6 billion to crypto-related fraud in 2023 alone.
This stands as a 45% increase from the previous year, with individuals over the age of 60 accounting for nearly $1.6 billion of the total.
In another high-profile case this week, authorities in Argentina just busted a major Bitcoin mining operation within the country.
The country’s Administración Federal de Ingresos Públicos (AFIP), along with the Argentine Naval Prefecture (PNA) raided multiple locations and seized hundreds of crypto mining equipment that had been smuggled into the country.
The officials also seized hundreds of high-end cell phones, video cards, and components including equipment from Canaan.
Hundreds of mining equipment seized.
These items were allegedly brought into the country illegally after the owners bypassed regulations that require permits for such equipment.
Cities like Mar del Plata and Bahía Blanca were raided, with four individuals—two men and two women—being arrested and charged with smuggling and money laundering.
Overall, the total value of assets seized included over $30,000 in pesos and $19,000 in U.S. dollars (all estimated to be over $624,000).
$640,000 and other items seized
The Argentine authorities suspect that the smugglers also used a clothing store as a front for storing the mining equipment.
This also comes amid similar crackdowns in which legitimate businesses like livestock farms and luxury apartment buildings are used as covers.
In one of the most high-profile cases, billionaire Tesla CEO, Elon Musk is now on the SEC's radar.
The agency, according to a report from Reuters, is seeking sanctions against him for failing to attend a court-ordered deposition after his $44 billion Twitter takeover.
Musk reportedly canceled his court date, just hours before it was set to take place on 10 September while citing an emergency related to SpaceX’s Polaris Dawn mission.
So far, the agency is accusing Musk of engaging in “gamesmanship” with prosecutor Robin Andrews urging the court to take action.
Musk’s Lawyer Alex Spiro, on the other hand, has labeled the SEC’s move as “drastic and unnecessary.”
Spiro also argues that Musk’s presence at the SpaceX launch was important because he needed to ensure the safety of the astronauts.
The SEC’s investigation, in particular, is over whether the Tesla CEO broke any laws by delaying the disclosure of his 9.2% stake acquisition in Twitter.
For context, this stake is a lot more than the 5% threshold which requires public disclosure.
Musk has since defended himself, stating that the delay was a misunderstanding and not an intentional violation.
Interestingly, this isn’t the first time that Musk has clashed with the SEC: In 2018, he battled a lawsuit over tweets about taking Tesla private.
This resulted in a $20 million fine and his removal as Tesla’s chairman.
The outcome of the ongoing court battle over Twitter, in this case, remains to be seen.
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