Cryptocurrency Fraud , Fraud Management & Cybercrime , Standards, Regulations & Compliance

Cryptohack Roundup: Bankman-Fried to Face 2 Criminal Trials

Also: Binance's Global Regulatory Woes, Trial of Mango Market Hacker
Cryptohack Roundup: Bankman-Fried to Face 2 Criminal Trials
Image: Executium via Unsplash

Every week, Information Security Media Group rounds up cybersecurity incidents in the world of digital assets. This week: Sam Bankman-Fried is set to face two criminal trials instead of one, Binance is sinking deeper into regulatory quicksand, and the Mango Markets hacker is expected to be tried on Dec. 4.

See Also: OnDemand Panel Discussion | Using Cyber Intelligence for Fraud Prevention

FTX

FTX co-founder Sam Bankman-Fried is set to face two separate trials for allegedly mismanaging funds at the sunk crypto exchange. He was originally scheduled to face trial on 13 charges, including fraud, fraud conspiracy and bribery, on Oct. 2, 2023. But on June 15, a U.S. district judge ruled that five of those charges will be split off into a second trial on March 11, 2024.

The Department of Justice added these five charges, which include bribery conspiracy, conspiracy to operate an unlicensed money-transmitting business, bank fraud conspiracy, and derivatives and securities fraud, in February and March 2023. Bankman-Fried's lawyers attempted to dismiss them, arguing that he could not be tried on the charges levied on him after his arrest and extradition from the Bahamas in December 2022. The DOJ requested a waiver from the Bahamian authorities, who currently hold the right to try him on said charges.

Binance

Binance appears to be sinking deeper into legal quicksand. The world's leading crypto exchange now reportedly faces a money laundering investigation in France. French daily Le Monde reported on Friday that the company has been under investigation by the Judicial Investigation Service of Finance since February 2022 for alleged "illegal" provision of digital assets and "aggravated money laundering."

The exchange faced a similar lawsuit in the United States, when the Securities and Exchange Commission filed 13 charges against Binance.US and CEO Changpeng Zhao. The SEC and Binance on Friday agreed to a plan that would restrict the parent company's officials from accessing U.S. customer funds, keys tied to those wallets and the cloud infrastructure. A federal judge has not yet approved the proposal.

The company also previously de-registered its U.K. subsidiary, Binance Markets Limited, as it did not conduct any business in the pro-crypto country.

Mango Markets

Avraham Eisenberg, the mastermind behind the $116 million Mango Markets hack in October 2022, is reportedly set to face trial on Dec. 4, 2023. He pleaded not guilty to three criminal charges including commodities fraud, commodity manipulation and wire fraud. Eisenberg claimed his actions are legal and part of a "highly profitable strategy," and he returned $67 million of the stolen funds to the decentralized platform. Defense attorneys and prosecutors are expected to file pretrial motions today.

Eisenberg also faces separate civil suits from the Commodity Futures Trading Commission, the Securities and Exchange Commission and Mango Markets.

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About the Author

Rashmi Ramesh

Rashmi Ramesh

Assistant Editor, Global News Desk, ISMG

Ramesh has seven years of experience writing and editing stories on finance, enterprise and consumer technology, and diversity and inclusion. She has previously worked at formerly News Corp-owned TechCircle, business daily The Economic Times and The New Indian Express.




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