Category Archives: Cryptocurrency
Former Athens resident pleads guilty in $3.3 billion cryptocurrency fraud
A Hall County manwho once resided in Athens recentlypleaded guilty in U.S. District Court in New York to the largest cryptocurrency theft in U.S. history.
James Zhong, 30, of Gainesville last week pleaded guilty to committing wire fraud, according to the U.S. Attorney in New York. Facing 20 years in prison, Zhongwill be sentenced on Feb. 22, 2023.
The investigation into Zhongs Bitcoin finances led to a November 2021 search of Zhongs home in Gainesville that resulted in the seizure of more than $3.36 billion in Bitcoin, described by the U.S. Attorney as the largest financial seizure ever by the Internal Revenue Service.
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When federal investigators searched Zhongs home they also seized Bitcoin in an underground floor safe, bitcoin loaded on a computer that was hidden inside a popcorn tin, along with $661,900 cash and 11 1-ounce bars of silver and gold.
Zhong was living on Ruth Street in Athens in March 2019, when he reported his home was burglarized while he was out of town between March 7-13. He came home to discover a window in a rear bedroom shattered and the thief had found a brief case that contained $400,000 cash and a USB thumb drive with personal information, according to the police report.
Zhong told the police officer he felt the person who stole the money apparently knew him because he had hidden the brief case behind an air vent.
Police Lt. Shaun Barnett said Tuesday that the cash was never recovered, nor was a suspect identified. However, he said the burglary and amount of money reported stolen "raiseda red flag with the IRS.
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Federal investigators said Zhong originally stole the Bitcoin by going into the Silk Road dark web marketplace, according to the report.
Silk Road is an online black market used by drug dealers and others to distribute illegal drugs and goods to buyers, according to the U.S. Attorney. Silk Road was created by an Austin, Texasnativewho is now serving life in prison.
James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost 10 years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery, U.S. Attorney Damian Williams said in a statement released Monday. ... Thanks to state-of-the art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds."
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Former Athens resident pleads guilty in $3.3 billion cryptocurrency fraud
FTX Cryptocurrency company Tom Brady endorses collapsed
David Moon| For the Knoxville News Sentinel
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Entertain This!, USA TODAY
FTX Cryptocurrency Exchange is a business that allows people to buy and sell digital currencies and other digital assets. Less than two weeks ago, it was a $32 billion crypto behemoth with celebrity endorsers such as Tom Brady (NFL) and Stephen Curry (NBA). Today the company is bankrupt, its founder Sam Bankman-Fried is sheltering in the Bahamas and its customers can no longer withdraw money (either actual money or digital dollars) from their accounts. Several sources report that up to a billion dollars of customer funds are missing.
It's not necessary to understand what a cryptocurrency exchange is to grasp this horrible situation. There are enough obvious red flags that anyone can learn from them.
Tom Brady and his (now ex) wife Gisele Bndchen were investors in the company and featured in a number of FTX ads. FTX is the safest and easiest way to buy and sell crypto, Brady declares in one ad.
Lesson: celebrity endorsements are worthless on any topic other than how to become a celebrity.
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Ive written this before, but it bears repeating: if you dont understand something well enough to be able to understandably explain it to a 14-year-old, dont invest in it. I have yet to meet anyone who can clearly and understandably explain cryptocurrency.
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It is important to note that FTX was structured in a way to avoid as much U.S. regulatory oversight as possible. It wasnt a brokerage firm or bank, but in ways it operated a bit like each. Do not let the FTX debacle cause concern about the safety of your money at an FDIC-insured bank or an NYSE-member brokerage firm. FTX was neither.
There are plenty of problems with the Federal Reserve and U.S. monetary policy, none of which are going to be solved by digital currencies. The U.S. dollar may not be backed by gold, but it is backed by something even more valuable: the taxing and regulatory authority of the U.S. government. Digital currency is backed by little more than fear and greed. And stupidity.
If someone makes a stupid investment, he should bear the cost of failure. But if he is enticed to make the investment by an outright lie, the liar should be held accountable. In August, U.S. bank authorities ordered FTX to stop claiming that money and other assets on deposit with the company were FDIC insured. That ridiculously false claim alone should, in my opinion, earn FTX executives time in prison. If promotors benefit from making false claims to would-be investors and customers, yet suffer no serious consequences if things turn sour, new charlatans will always quickly take the place of the old ones.
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David Moon, president of Moon Capital Management, may be reached at david@mooncap.com.
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FTX Cryptocurrency company Tom Brady endorses collapsed
Celsius execs cashed out millions before cryptocurrency company went …
Two former executives at Celsius Network cashed out millions in cryptocurrency shortly before the exchange declared bankruptcy this summer, court documents show.
Former CEO Alex Mashinsky and ex-Chief Strategy Officer Daniel Leon in May withdrew $10 million and $11 million, respectively, according to a legal filing in the case. Celsius filed for Chapter 11 protection from its debts in July.
Mashinsky and Leonresignedlast month. Celsius did not immediately respond to a request for comment Thursday.
The New Jersey company launched in 2018 and quickly became one of the darlings of the crypto community. Celsius marketed itself as a type of crypto bank, encouraging people to deposit their digital currencies with the firm and earning money by borrowing or lending against those funds.
In 2019, Celsius launched a mobile app and made its services available in 100 countries. A year later, the company landed millions of dollars in venture capital, which helped it launch a crypto-mining arm called Celsius Mining, which it still owns today. By the spring of 2021, Celsius had 200 employees and was managing about $10 billion worth of crypto assets on its platform.
But Celsius collapsed as theprice of digital currencies plummetedthis year. Goldstein said in September that the company is considering giving out IOU tokens as a promise to eventually make customers whole, according to an internal companycallshared publicly by a Celsius customer.
Celsius is also holding an auction on October 20 and may sell some of its assets, court documentsshow. Sam Bankman-Fried, co-founder of crypto exchange FTX, has expressed interest in buying some Celsius assets, Bloomberg News reported.
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Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
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Celsius execs cashed out millions before cryptocurrency company went ...
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