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Two arrested for $575 million crypto defraud

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Fraud in the cryptocurrency sector has persisted despite the volatility in the cryptocurrency industry this year. On Monday, Estonian police arrested two men accused of involvement in a $575 million cryptocurrency scam.

Estonian police have arrested two people in a $575 million cryptocurrency scam

An indictment unsealed in US District Court in Seattle charged the two Estonian nationals with fraud and conspiracy to engage in money laundering. The accused are 37-year-old Estonian nationals identified as Ivan Torogin and Sergey Potapenko.

The charges include four other people from Belarus, Estonia and Switzerland. However, the identities of the other four people involved in the fraud case have not been revealed.

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according to According to prosecutors, the suspects defrauded hundreds of thousands of people between 2015 and 2019. These individuals tricked unsuspecting people into buying contracts for HashFlare, a cryptocurrency mining service. They also enticed people to invest in the digital currency bank known as Polybius Bank.

However, unlike what the plaintiffs promoted to their clients, these companies implemented pyramid schemes where money from new investors was used to pay early investors dividends.

These individuals are also accused of laundering the proceeds of fraud case using shell companies. They also used the money to buy real estate and luxury cars. The two mentioned accused are currently detained in Estonia. According to the US Department of Justice, they are awaiting extradition to the United States.

“These defendants took advantage of the allure of cryptocurrency and the ambiguity surrounding cryptocurrency mining to perpetrate a massive Ponzi scheme,” Seattle US Attorney Nick Brown issued a statement.

According to Brown, authorities in the United States and Estonia are currently working to seize property and bank accounts owned by the defendants. Court records in Seattle did not clarify whether the defendants actually engaged attorneys to represent them in this matter. According to the authorities, some of those victims were from Western Washington state.

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The cryptocurrency sector has seen an increase in volatility and turmoil during the year. This also includes a significant drop in the prices of Bitcoin and Ether, with the two largest cryptocurrencies losing nearly two-thirds of their value in the past year.

More cryptocurrency investors are counting losses after the FTX crash

While cryptocurrency fraud is rampant, it also appears that cryptocurrency investors are losing money on legitimate platforms. FTX, once one of the largest cryptocurrency exchanges, filed for bankruptcy on November 11th. The bankruptcy filing revealed mismanagement of the company.

FTX reportedly owes more than $3 billion to its 50 largest creditors. Prior to filing for bankruptcy, FTX had already halted withdrawals, locking customer funds on the platform. Genesis and BlockFi have also suspended withdrawals due to current market conditions.

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Blockchain

Ripple is filing a final submission against the SEC as the landmark case draws to a close

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The most talked about crypto case involving the US Securities and Exchange Commission (SEC) and Ripple is coming to an end after a two-year battle.

On Dec. 2, the SEC and Ripple both filed redacted responses to each other’s opposition to motions for summary rulings.

Ripple argued in his move document that the SEC had failed to prove that its offering of XRP between 2013 and 2020 was an offer or sale of an “investment contract” and therefore a security under federal security laws.

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Ripple concluded the document by saying that “the court should grant the defendant’s request and should reject the SEC motion.”

This is Ripple’s “final submission,” Ripple General Counsel Stuart Alderotti said on Twitter on Dec. 3, asking the court to “make” a ruling in its favor.

He also stated that Ripple is proud of the defense it filed “on behalf of the entire cryptocurrency industry,” noting that Ripple “always played it straight with the court,” and took a subtle swing at the SEC saying that “the same cannot be said for our opponent.”

In another Twitter post, Alderoty continued to criticize the SEC on Dec. 5, referring to it as a “reversion regulator,” citing two statements suggesting they are on ends with each other.

Ongoing legal dispute Between the SEC and Ripple It began in December 2020 when the Securities and Exchange Commission initiated legal action against Ripple claiming that it raised $1.3 billion by offering Ripple’s native cryptocurrency XRP as an unregistered security.

Related: Investors are increasingly confident in Ripple’s victory over the SEC: CoinShares

Earlier November 30 on Twitter threadThere are only three cases left to be resolved in SEC vs Ripple, former federal prosecutor James Phelan said.

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This includes summary motions for judgment, expert challenges, and seal issues related to the Expert Reports, Hinman documents, and other materials on which the SEC and Ripple have relied in their motions.

Hinman documents refer to the speech given by William Hinman at the Yahoo Finance All Markets Summit in June 2018, where He stated that ether (ETH) was not a security.

Phelan believes that Justice Torres will not handle the three big cases “separately,” and instead will decide “everything together, and once she rules on the motions for summary judgment, a ‘big written judgment’ will be rendered — likely” on or before March 31. ) 2023.”