Crypto.com Postpones South Korea Launch After Reports of Money Laundering Probe

Justice Department’s First Cryptocurrency Open-Market Manipulation Case
A federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange.

According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts.

“Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out of $110 million,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Manipulative trading puts our financial markets and investors at risk. This prosecution—the first involving the manipulation of cryptocurrency through open-market trades—demonstrates the Criminal Division’s commitment to protecting U.S. financial markets and holding wrongdoers accountable, no matter what mechanism they use to commit manipulation and fraud.”

“Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the first-ever cryptocurrency open-market manipulation case,” said U.S. Attorney Damian Williams for the Southern District of New York. “This ground-breaking prosecution epitomizes this office’s ability to employ innovative methods and cutting-edge law enforcement tools to continue to protect all financial markets. The career prosecutors of this office continue their expertise in prosecuting financial fraud, one of our core priorities, and would-be financial criminals should think twice before daring to engage in illicit conduct on our watch.”

“The FBI and its partners will not stand by when criminals engage in illicit activity at the expense of the American people and our financial institutions,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “If you engage in fraudulent activity, whether that be in the cryptocurrency space or through other forms of market manipulation, you will be held accountable for your ill-gotten gains.”

Eisenberg is scheduled to be sentenced on July 29 and faces a maximum penalty of 10 years in prison on the commodities fraud count and the commodities manipulation count, and a maximum penalty of 20 years in prison on the wire fraud count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI investigated the case, with assistance from Homeland Security Investigations and IRS Criminal Investigation.

Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the Criminal Division’s Fraud Section, a member of the National Cryptocurrency Enforcement Team (NCET), and Assistant U.S. Attorneys Thomas Burnett and Peter Davis for the Southern District of New York are prosecuting the case.

The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Within the Criminal Division’s Computer Crime and Intellectual Property Section, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also works to set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.

Article Credit: https://www.coindesk.com/policy/2024/04/23/cryptocom-postpones-south-korea-launch-after-reports-of-money-laundering-probe/