Tag: Extradition

Terraform Labs Co-Founder Argues Against SEC Lawsuit

by Blockchain News

In recent news, Terraform Labs co-founder Do Kwon’s lawyers have made arguments in court against the US Securities and Exchange Commission’s (SEC) lawsuit alleging that Kwon illegally offered unregistered securities to US investors. Kwon’s lawyers have requested the lawsuit be dismissed, citing that US law prohibits regulators from using federal securities law to assert jurisdiction over the digital assets in the case. According to Bloomberg, the lawyers also claim that the SEC has failed to prove that Kwon defrauded US investors in connection with the $40 billion collapse of TerraUSD (UST) and Luna (LUNA) cryptocurrencies. The lawyers argue that the stablecoin in question is a currency and not a security.

The legal proceedings began when Kwon was arrested in Podgorica airport, Montenegro, on March 23, while attempting to fly to Dubai using fake documents. Following his arrest, both South Korean and American authorities requested the entrepreneur’s extradition. At present, it is unclear which country, if any, will be granted the extradition of Kwon.

The Seoul Southern District Court recently denied an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. Although prosecutors saw Kwon’s arrest as an opportunity to apprehend Shin, the court denied the request citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

Montenegrin Justice Minister Marko Kovač, through an interpreter, stated that determining to which state Kwon would be extradited would be based on several factors such as the severity of the committed criminal offense, the location and time when the criminal offense was committed, the order in which the request for extradition was received, and several other factors.

Terraform Labs, which is behind the development of the Terra blockchain and several stablecoins, has gained attention in the cryptocurrency industry in recent years. The company has been working on a variety of projects, including an online marketplace and decentralized finance applications. The SEC lawsuit against Kwon is just one of several legal battles that the company has been involved in, including a lawsuit filed by the South Korean financial watchdog against the company’s stablecoin, Terra.

In conclusion, the legal battle between Do Kwon and the SEC is ongoing, and the outcome remains uncertain. However, Kwon’s lawyers’ arguments that the stablecoin in question is a currency and not a security may have implications for the broader cryptocurrency industry. Additionally, the issue of Kwon’s extradition remains unresolved, and it is unclear which country, if any, will be granted the request for his extradition. The Terraform Labs legal battles highlight the regulatory challenges faced by the cryptocurrency industry as it continues to grow and develop.

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South Korean Court Denies Arrest Warrant for Terraform Labs Co-Founder

by Blockchain News

A South Korean court has denied a request for an arrest warrant for Terraform Labs co-founder, Shin Hyun-Seong, also known as Daniel Shin. This marks the second attempt by South Korean authorities to bring Shin in for questioning, following the recent arrest of Terraform Labs’ other co-founder, Do Kwon.

Kwon was arrested at Podgorica airport in Montenegro on March 23 while attempting to use fake documents to travel abroad. The Seoul Southern District Prosecutors Office took advantage of this situation and requested an arrest warrant for Shin on March 27, citing his involvement in cashing in illicit profits from Terra (LUNA) and TerraUSD (UST) sales.

However, the Seoul Southern District Court denied the request, citing unconfirmed allegations and the unlikelihood of Shin being a flight risk or destroying evidence, according to local media Yonhap.

Shin currently faces multiple fraud charges, specifically in relation to allegedly hiding risks associated with investing in Terraform Labs’ in-house tokens. The denial of the arrest warrant is a setback for South Korean authorities attempting to bring Shin to justice.

Following Kwon’s arrest in Montenegro, authorities from both the United States and South Korea have attempted to extradite the entrepreneur. However, determining to which state he will be extradited is based on several factors, according to Montenegro’s Minister of Justice, Zoran Kovač.

“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Kovač through an interpreter.

Terraform Labs is a blockchain company that has gained popularity for its decentralized stablecoin, UST, which is built on the Terra blockchain. The company has been involved in several high-profile partnerships, including with Binance, OKEx, and Huobi. However, the recent arrests of both of its co-founders have raised concerns about the company’s future and the integrity of its operations.

Terraform Labs has stated that it is cooperating with authorities and is committed to maintaining the highest standards of compliance and transparency. The company has also emphasized that its products and services remain unaffected by the ongoing legal proceedings.

The denial of the arrest warrant for Shin is likely to result in further scrutiny of Terraform Labs’ operations by regulatory authorities in South Korea and other countries. As the blockchain industry continues to grow and mature, incidents of fraud and non-compliance are likely to come under increasing scrutiny, and companies will need to be proactive in demonstrating their commitment to legal and ethical standards.

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Former OneCoin Executive Charged with Fraud

by Blockchain News

The United States Department of Justice has charged Irina Dilkinska, a former executive of the fraudulent cryptocurrency scheme OneCoin, with wire fraud and conspiracy to commit money laundering. Dilkinska, who was extradited from Bulgaria, now faces up to 40 years in prison for her alleged role in aiding the laundering of over $400 million of OneCoin’s proceeds.

OneCoin was a cryptocurrency scheme that has been accused of being a Ponzi scheme and a fraudulent operation. The scheme was founded in 2014 by Ruja Ignatova, who was later indicted by the US government for her role in the scheme. Ignatova is currently a fugitive, and her brother, Konstantin Ignatov, has pleaded guilty to his role in the scheme.

Dilkinska was OneCoin’s former head of legal and compliance and is accused of aiding in the laundering of OneCoin’s proceeds. According to the Department of Justice, Dilkinska allegedly destroyed incriminating evidence and sent incriminating messages upon hearing of a co-conspirator’s arrest. Each count of wire fraud and conspiracy to commit money laundering carries a maximum potential sentence of 20 years in prison.

The OneCoin scheme has been accused of defrauding investors of billions of dollars, and the US government has been actively pursuing legal action against those involved in the scheme. The scheme operated by convincing investors to buy OneCoin tokens, which were then traded on the OneCoin exchange. However, the exchange was found to be fraudulent, and the tokens were worthless.

The OneCoin scheme has been the subject of numerous investigations and legal actions around the world. In addition to the charges against Dilkinska and Ignatova, several other individuals have been indicted in connection with the scheme. The US government has also seized millions of dollars in assets and bank accounts connected to the scheme.

The case against Dilkinska is another example of the US government’s commitment to pursuing those involved in fraudulent cryptocurrency schemes. The government has been increasing its efforts to regulate the cryptocurrency industry and crack down on fraudulent schemes in recent years. The Department of Justice has created a cryptocurrency enforcement framework to help prosecutors identify and investigate cryptocurrency-related crimes.

In conclusion, the charges against Dilkinska highlight the ongoing legal action against those involved in the OneCoin scheme. Dilkinska faces a potential prison sentence of up to 40 years for her role in aiding the laundering of OneCoin’s proceeds. The case is another example of the US government’s efforts to crack down on fraudulent cryptocurrency schemes and regulate the cryptocurrency industry.

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Latvian National Extradited to the U.S for Crypto and Wire Fraud

by Blockchain News

Ivars Auzins, a Latvian citizen, accused of committing securities and wire fraud using eight companies that were alleged to mine or invest in crypto assets, was extradited to the United States to face a six-count indictment charge.

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Breon Peace, the United States Attorney for the Eastern District of New York, pointed out:

“Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency.”

He added:

“This office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.” 

The indictment noted that Auzins concealed his identity through aliases. As a result, he operated “Auzins Entities,” which advertised crypto mining and investments through websites, social media, and email campaigns. Per the announcement:

“Some of the Auzins Entities – Denaro and Bitroad Limited – purported to raise funds from investors through initial coin offerings (ICOs).  Other Auzins Entities purported to be cryptocurrency investment platforms that provided investors with different investment plans and profit rates.”

The Auzins Entities were able to siphon more than $7 million in crypto assets from investors in the U.S. and other places. This happened between November 2017 and July 2019, and soon after, the Auzins Entities went underground. 

 

Meanwhile, a recent report by blockchain analytic firm Chainalysis pointed out that crypto scams had nosedived by 65% in 2022. 

 

The drop in scam revenue was linked to Bitcoin’s bearish momentum, which has seen the leading cryptocurrency decline by at least 70% from its all-time high (ATH) price of $69K recorded in November last year. 

 

The Chainalysis report highlighted that people falling for crypto scams had declined. 

Image source: Shutterstock

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Former BitMEX Executive Agrees to be Extradited Back to the US as Trial Drags on

by Blockchain News

Former BitMEX Derivatives Exchange executive Gregory Dwyer has agreed to be extradited from Bermuda back to the United States of America,while the legal tussle indicting three other executives lingers on.

As reported by the Royal Gazette, the extradition process is still awaiting approval by governor Rena Lalgie.

The American authorities accused Gregory of being complicit in operating the BitMEX exchange without adequately registering it with the proper authorities. The Australian executive was also officially charged on October 1 in violation of the US Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act. 

Former CEO Arthur Hayes surrendered to US authorities for the prosecution earlier in the year. Alongside Hayes, Benjamin Delo and Samuel Reed, the other parties indicted, had appeared in court since the case started, leaving Gregory as the outstanding man. The other three executives had been granted bail in varying sums as the case drags on. Despite his absence from the court, Gregory’s spokesman noted that the Australian cooperated with the authorities.

“Mr. Dwyer continues to work with the government to ensure a smooth process for his appearance in New York and has every intention of defending himself against these meritless charges,” the spokesman noted.

Should Gregory Dwyer be found guilty of the charges, he and his colleagues could bag up to 5 years in jail. While this may be the worst-case scenario, the case may end up with settlements paid to the relevant authorities just as the mother exchange did when it agreed to pay $100 million in settlement to the Commodity Futures Trading Commission (CFTC) back in August.

The ongoing case highlights the continuous clampdown on cryptocurrency-related entities in the US. While the BitMEX case involved the CFTC, blockchain payments firm, Ripple Labs Inc, battling a legal issue with the Securities and Exchange Commission (SEC) since the firm was accused of selling unregistered XRP securities. These and more cases have pushed stakeholders in the crypto ecosystem to nudge the relevant authorities to provide the proper oversight for the industry.

Image source: Shutterstock

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Janice McAfee can’t ‘accept the suicide story’ about John’s death

by Cointelegraph

Janice McAfee, the widow of anti-virus pioneer John McAfee, says that she can’t “accept the suicide story” relating to the death of her husband until an investigation has been completed.

In a July 7 Twitter post, McAfee noted that she is still in shock, as she expressed her disbelief that the 75-year-old would kill himself because of looming extradition to the U.S. to face charges of tax evasion, and the possibility of life in prison.

The outspoken crypto proponent was found dead in his jail cell within hours of a Spanish court ordering his extradition to the U.S. on June 23. An official autopsy is being conducted by Spanish authorities, but newspaper El Pais has cited unnamed sources saying preliminary results showed the death was by suicide.

McAfee described the mainstream media as a “malignant cancer” and said that she questioned the “story of John’s suicide”, noting that the reported “suicide note” found in his pocket was never mentioned when she picked up his belongings from jail and was something the MSM found out before she did.

In McAfee’s view, the decision from Spanish courts was no surprise to John and wouldn’t have tipped him over the edge, as he was prepared to appeal the process:

“We had a plan of action in place to begin the appeal process and we discussed plans for the next stages of his legal fight. The extradition would not have happened immediately, it would have taken many months at least.”

“John was a fighter and he had so much more fight left in him. He told me not to worry, we would continue to fight all the necessary appeals,” she added.

Denial is the first of the ‘five stages of grief’ and many people, including Edward Snowden and Charles Hoskinson, have stated publicly the suicide was an understandable response to the situation McAfee was in. However, conspiracy theories quickly began to swirl in a similar fashion to the suicide of Jeffrey Epstein, asserting that McAfee had not died from his own hand.

The McAfee Antivirus founder had touted that he had enough dirt on the U.S. government to be assassinated, noting in December 2019 that “If I suicide myself, I didn’t. I was whackd. Check my right arm,” in reference to his tattoo which read “WHACKD.”

Related: Remembering John McAfee: Computer programmer and crypto evangelist dead at 75

His grieving widow hopes an investigation will uncover more details.

“The investigation into John’s death is still ongoing but I will share what information I can, when I can. Until then, I do not accept the ‘suicide’ story that has been spread by the malignant cancer that is the MSM. They are their unnamed sources are not to be trusted,” she stated.