She used stolen funds to fund a luxurious lifestyle, before she was caught. SafeMoon’s CTO Thomas Smith has pleaded guilty for his part in an alleged scheme to steal over $200 million dollars from investors. The SEC has launched the Cyber and Emerging Technologies Unit in response to an increase of crypto-related crime, especially fraud on blockchain and emerging markets.
A fraudster is jailed for stealing millions from Bybit
Ho Kai Xin was sentenced to almost ten years of prison by a Singapore court for defrauding Bybit, a crypto-exchange company, out $5.7 million. The Straits Times reported the verdict on February 20. It was made following her guilty pleas to 44 charges including five counts for cheating, and eight other counts related to dealings with proceeds from criminal activity.
Ho Kai Xin
Ho was a payroll manager at Bybit and worked for the cryptocurrency networking platform WeChain. She manipulated payroll information while leading the team to redirect funds into cryptocurrency wallets that she controlled. Fraudulent activities began in 2022 and continued unnoticed until 2023. A WeChain rep alerted the authorities, and she was caught. In April of that same year, she was arrested.
Ho allegedly altered payroll records with Microsoft Excel in order to increase falsely the payments due by Bybit. Then, she transferred approximately $4.2million into her own crypto wallets and converted it to fiat currency. The funds used were to fund a luxurious lifestyle. This included a $750,000 deposit on a $3.7million penthouse. The money was also spent on Louis Vuitton luxury items, such as bags, rings and shoes.
The authorities were able to retrieve more than $1 million worth of Tether (USDT), from the electronic wallets she used, and also over $140.000 from a bank account. The police also seized assets totaling close to $330,000 including a Mercedes Benz. Ho has not attempted to return the stolen money despite these recovery.
Items confiscated
She was sentenced after receiving a six-week jail term for contempt last month. The court had ordered her not to spend the money she misappropriated. She will receive her latest sentence after she has completed the current sentence, which began on January 27.
Ho tried, during the investigation to deceive authorities, by inventing the existence a cousin called “Jason Teo” whom she wrongly accused of the illegal transactions. Later, investigators confirmed that such a person did not exist. This only strengthened her case.
James Gomez, her defense attorney, requested a sentence reduction of 8 years, 8 months, due to the fact that she is a young mother. His argument was that Ho’s actions were the result of a mistake in judgement and she had since considered the consequences her crimes would have on her family, Bybit and the justice systems. Prosecutors pointed out, however, that Ho was emboldened by her initial inaction.
SafeMoon CTO pleads guilty to crypto fraud
Thomas Smith, the chief technology officer of SafeMoon LLC and a former FBI agent, pleaded to guilty in an unrelated case. US authorities claim that this involves a scheme for a crypto-fraud worth millions. In a court document filed on February 20, it was revealed that Smith had appeared in front of Magistrate Cheryl Pollak, to withdraw his not-guilty initial plea. The judge recommended to US District Judge Eric Komitee that the new plea be accepted, with a possible sentence up to 45-years in prison. The sentence includes 20 years of prison for conspiracy to commit wire fraud and 25 years in securities fraud.
In November 2023, the Justice Department and Securities and Exchange Commission filed criminal charges against Smith along with SafeMoon’s CEO Braden Karony and Kyle Nagy. Authorities claimed that they misled investors into believing that SafeMoon’s liquidity pool had been locked and that it was impossible to access funds. Prosecutors say that they had access to the liquid funds and used more than 200 million dollars for their personal needs, such as the purchase of luxury cars and real estate.
SafeMoon’s market cap peaked at between $5.7 and $8 billion, before falling sharply on April 20th, 2021 when it became apparent that the liquid pool had not been locked up as claimed. This news caused a huge sell-off that cut SafeMoon’s value in half.
Smith, Karony and Nagy are still on the run and believed to be in Russia. Smith and Karony both filed initial motions for dismissal of the charges.
Karony asked for a delay of his criminal case earlier this month by saying that the former US president Donald Trump’s promises on crypto-policies could lead to at least dismissing one of Karony’s charges. The Judge Komitee refused the request and kept the trial schedule with the opening statements scheduled for April 7 intact.
SEC launches new unit to combat crypto fraud
The US SEC has announced that it is creating a division to combat cyber crimes such as frauds involving crypto assets and blockchain. This newly created Cyber and Emerging Technologies Unit replaces the SEC’s former Crypto Assets and Cyber Unit and is composed of around 30 fraud specialists and lawyers across several SEC offices. The unit’s primary focus is to protect retail investors against bad actors who are using emerging technologies.
Laura D’Allaird will lead the unit. She previously headed the SEC’s Crypto Assets and Cyber Unit. She is located in Washington DC and served as the counsel for SEC Commissioner Jaime Lizarraga. Mark Uyeda, acting SEC chair said the unit would work to crack down on those who abuse technology to hurt investors or undermine confidence in emerging market.
Unit will focus on fraudulent activities related to securities transactions, manipulation of social media, misleading websites and scams involving blockchain. This announcement came as cryptocurrency is dealing with new allegations of insider trade, especially in meme coin.
The LIBRA meme coin was promoted by Argentine president Javier Milei, before it collapsed in a rug-pull. The team that created the token allegedly pocketed more than $100,000,000, while investors lost over $251,000,000. It was the sudden and sharp collapse of this token that sparked a great deal of criticism about regulatory shortcomings in the cryptocurrency industry. Nic Puckrin’s, The Coin Bureau co-founder, was among those who blamed regulators, claiming they failed to give clear guidelines on the assets.
( Nansen)
Jupiter, the decentralized exchange where LIBRA was traded, has acknowledged that meme coin enthusiasts were aware of its launch before it was made public. Jupiter launched an internal investigation in response to the controversy, and Meteora’s co-founder also resigned. LIBRA’s failure has also heightened calls for tighter regulation of the crypto-market.
This site is for entertainment only. Click here to read more
