Key takeaways:
- The US DOJ has charged two people with running a $25 million AI cryptocurrency trading Ponzi scheme.
- The defendants are charged with using crypto mixers to avoid discovery and interchain swaps to disguise the victims’ cryptocurrency investments.
Two people have been charged by the US Department of Justice (DOJ) with running a $25 million artificial intelligence (AI) cryptocurrency trading Ponzi scheme.
As per the December 12 announcement, David Gilbert Saffron, an Australian national, and Vincent Anthony Mazzotta Jr., a resident of Los Angeles, are charged with running trading programs that purportedly offered to utilize an automated trading bot with artificial intelligence to trade victims’ cryptocurrency investments and generate substantial profits.
However, the two people claim that after getting the consumers’ deposits, they used the money to hire a personal chef, hire a private security guard, stay in opulent hotels, rent a private residence, and take private chartered jet flights.
Additionally, the defendants are charged with using crypto mixers to avoid discovery and interchain swaps to disguise the victims’ cryptocurrency investments. The program was run under a number of identities, including Federal Crypto Reserve, Omicron Trust, Circle Society, Bitcoin Wealth Management, Mind Capital, and Cloud9Capital.
“Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release.”
The US DOJ has concentrated heavily on enhancing the compliance of blockchain firms ever since Tornado Cash, a cryptocurrency mixer, was sanctioned last year. After Binance paid a $4.3 billion settlement for money laundering and violating US sanctions, the DOJ disclosed on December 9 how it is keeping an eye on the cryptocurrency exchange’s compliance.
The activities of the exchange will be closely observed by a number of divisions within the DOJ’s criminal division, including the divisions responsible for money laundering and asset recovery, national security, counterintelligence, and export control, as well as the United States Attorney’s office for the Western District of Washington.
