Scheme

On November 5th, the Department of Justice (DOJ) announced that four individuals had been charged in an $80 million cryptocurrency fraud scheme. The scheme allegedly involved a “pig butchering” scheme in which the defendants used fake accounts to manipulate the prices of certain cryptocurrencies.

The four individuals charged are: Mark Gillespie, a former employee of the now-defunct cryptocurrency exchange Cryptsy; Robert Dunlap, a former Cryptsy customer service representative; Ryan Kennedy, the founder of the now-defunct cryptocurrency exchange Moolah; and Nathan Gibson, a former Cryptsy customer service representative.

According to the DOJ, the defendants allegedly created fake accounts on Cryptsy and Moolah in order to manipulate the prices of certain cryptocurrencies. The defendants allegedly used these accounts to buy and sell the cryptocurrencies at artificially inflated prices, resulting in profits for themselves and losses for other investors.

The DOJ also alleges that the defendants engaged in a “pig butchering” scheme in which they used fake accounts to buy large amounts of a cryptocurrency at a low price and then sold it at a higher price. This resulted in a profit for the defendants and losses for other investors.

The DOJ is seeking to recover $80 million in ill-gotten gains from the defendants. If convicted, the defendants could face up to 20 years in prison and fines of up to $250,000.

This case is yet another example of the dangers of investing in cryptocurrencies. While cryptocurrencies can offer potential rewards, they can also be highly volatile and risky investments. It is important for investors to do their due diligence before investing in any cryptocurrency and to be aware of potential fraud schemes.