Beyond the dizzying highs and crushing lows that crypto has seen over the past year, there’s been no shortage of crime.
Bull markets tend to embolden opportunistic thieves, with Chainalysis data revealing stolen funds topped $2.2 billion over the past 12 months.
Here, you’ll find a rundown of the crypto crimes that grabbed headlines in 2024. A common theme? Justice for wrongs that happened years earlier.
1. Sam Bankman-Fried Sentenced
We begin with one of the biggest crypto crimes on record: the collapse of FTX, which saw billions of dollars stolen from unsuspecting customers.
After a damning trial in 2023 saw Sam Bankman-Fried convicted of fraud, he was sentenced to 25 years behind bars back in March.
Other members of SBF’s inner circle, who reached plea deals and testified against him, also received their punishments.
Co-CEO Ryan Salame actually received a longer sentence than what prosecutors had sought: seven-and-a-half years.
Caroline Ellison — SBF’s on-off girlfriend and CEO of sister trading firm Alameda Research — was given a two-year jail term, but praised for her role in securing the billionaire’s conviction.
But some executives were spared prison altogether. The doomed exchange’s co-founder Gary Wang walked free, as did head of engineering Nishad Singh.
SBF continues to appeal his sentence from behind bars in Brooklyn, with a recent Forbes report suggesting he’s started to write a prison diary.
2. Terraform Labs Goes Bust
After wiping $40 billion from the crypto markets in 2022, and sparking a punishing bear market that made other firms go bust, Terraform Labs was slapped with a $4.5 billion fine from the Securities and Exchange Commission.
The settlement led the embattled company to begin bankruptcy proceedings of its own.
But there are still issues unresolved — especially when it comes to Terra’s founder Do Kwon, who remains in Montenegro after being detained while trying to flee the country using a bogus passport.
He’s wanted on criminal charges by both the U.S. and South Korea, but the extradition has been on ice pending an appeal.
3. ‘4’ for CZ
Changpeng “CZ” Zhao had established himself as a crypto heavyweight as CEO of Binance, the world’s largest exchange.
But all of that came crashing down when he was sentenced to four months in jail earlier this year — a punishment that stems from the billionaire pleading guilty to money laundering violations in 2023.
Four has long been a significant number for CZ. He regularly used it as shorthand to dismiss “FUD, fake news and attacks.”
Critics argued that the judge was far too lenient on the entrepreneur, and he was released from a low-security prison in California by September.
It didn’t take long for CZ to re-emerge on the crypto conference circuit — popping up at Binance Blockchain Week in Dubai, and the Bitcoin Middle East and North Africa conference in Abu Dhabi.
4. Alex Mashinsky Pleads Guilty
FTX, Terraform Labs… who’s next? Ah yes, Celsius.
The troubled crypto lender’s founder, Alex Mashinsky, has now pleaded guilty to commodities fraud and manipulating the price of CEL tokens.
He could face up to 30 years in prison when he’s sentenced next April — and has pledged not to appeal any jail term shorter than this.
Mashinsky told a judge that he had given his customers “false comfort” and took full responsibility for your actions.
While bragging that “banks are not your friends” at the height of Celsius’s operations, it turned out users couldn’t depend on this company either.
5. The OneCoin Saga Continues
Some crypto crimes are still being litigated many years after they happened, such as the OneCoin Ponzi scheme that took place between 2014 and 2016.
The project’s former attorney was jailed for four years back in April. Another accomplice was sentenced to 10 years — and ordered to forfeit $392 million along with a yacht, two Porsches and four properties.
But there’s one person who’s proven incredibly elusive since OneCoin collapsed like a house of cards: “Cryptoqueen” Ruja Ignatova.
She’s been on the run for over seven years, but is still being sought after defrauding customers out of $4.5 billion. The U.S. is now offering a $5 million reward for information that leads to her capture, but reports this year suggested Ignatova may have been murdered.
6. Bitfinex Launderers Jailed
Another long-running case that came to a conclusion this year related to the notorious hack of Bitfinex in 2016.
Husband-and-wife duo Ilya Lichtenstein and Heather Morgan were sentenced after admitting to laundering billions of stolen Bitcoin.
The crypto stash was worth $4.5 billion at the time of their arrest — with a record-breaking $3.6 billion recovered by U.S. officials — but this BTC now has a substantially higher value.
Lichtenstein received a five-year prison term for what was described as “the most complicated money laundering techniques” ever investigated by the Internal Revenue Service.
Morgan — an amateur rapper known as “Razzlekhan” who referred to herself as “The Crocodile of Wall Street” — was sentenced to 18 months.
The story’s now been turned into a Netflix documentary, while the laptop that brought down the duo is on display at the Smithsonian Institute.
7. Operation Destabilise
There’s also been plenty of work to tackle the underworld gangs that launder crypto behind the scenes.
“Operation Destabilise” saw British detectives dismantle two Russian networks that relied heavily on digital assets to conceal wealth and move it around the world.
Drug traffickers, firearms dealers, hackers and wealthy oligarchs are all said to have benefited from the illicit operations.
8. SEC’s X Account Hacked
While a number of high-profile social media accounts were targeted this year, the most consequential hack happened back in January.
The SEC’s X account was compromised, with a post falsely declaring that Bitcoin ETFs had been approved in the U.S. — days before an official announcement was made.
It was later revealed that the agency lacked two-factor authentication on this account.
By October, an Alabama man called Eric Council Jr. had been arrested on charges of conspiracy to commit identity theft and access device fraud.
The post The 8 Worst Crypto Crimes of 2024 appeared first on Cryptonews.
