Key takeaways:
- For tax evasion, the 31-year-old creator of the now-defunct cryptocurrency project Oyster Protocol received the maximum punishment of four years in prison.
- Elmaani advertised Pearl (PRL), a cryptocurrency, as a means for investors to buy data on Oyster Protocol during September and October 2017.
For tax evasion, Amir Bruno Elmaani, the 31-year-old creator of the now-defunct cryptocurrency project Oyster Protocol, received the maximum punishment of four years in prison.
Elmaani, also known as “Bruno Block,” entered a guilty plea on April 6 and acknowledged surreptitiously minting and selling Pearl tokens while evading income tax on a large portion of the project’s proceeds.
The US Attorney’s Office announced on October 31 that Elmaani had been sentenced to jail. Elmaani said he lost more than $5.5 million in taxes. About the sentence, District Attorney Damian Williams stated:
“Amir Elmaani violated the duty he owed to pay taxes on millions of dollars of cryptocurrency profits, and he also violated the trust of investors in the cryptocurrency he founded,”
Elmaani advertised Pearl (PRL), a cryptocurrency, as a means for investors to buy data on Oyster Protocol, a blockchain-based data storage platform, during September and October 2017.
But in October 2018, Elmaani covertly created a large number of additional PRL tokens and sold them on the market for his own gain, right in front of the Oyster Protocol team and investors. Elmaani acknowledged in his plea deal:
“On or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project. I then sold these newly minted PRL on a digital trading platform,”
He also mentioned that he was conscious of the possibility that the counterparties purchasing these just-created PRL were unaware of his reopening of the smart contract and that he had just significantly boosted the total supply of PRL.
Elmaani filed a tax return in 2017 stating he had only made a total of $15,000 from a patent design business while earning millions of dollars from the exit scam. In 2018, he reported having no income to the tax authorities.
Elmaani spent almost $10 million on many yachts, $1.6 million at a carbon-fiber composite company, hundreds of thousands of dollars at home renovation stores, and over $700,000 on two residences, according to the court’s findings in 2018.
Two of Elmaani’s acquaintances purchased one of the homes, while the other was bought through a shell business. In addition, he “dealt substantially” in precious metals and maintained gold bars in a safe aboard one of his boats.
Elmaani received a four-year jail sentence, a one-year supervised release period, and an order to pay $5.5 million in restitution.
