An Ohio man was arrested for allegedly running a Crypto Ponzi scheme, from which he raised at least $10 million from investors, according to a press release by the Department of Justice published on November 18th.
As the allegations state, Rathnakishore Giri has been accused of deceiving investors by lying to them about his experience in trading Bitcoin derivatives. As asserted by the indictment, he falsely promised them profitable returns without putting their principal investment at risk.
In fact, Giri is alleged to have used money from new investors to repay old ones, which is typical of a Ponzi scheme. He also misled his investors by making them believe that there were delays when they wanted to cash out or receive their promised principal.
According to the press release:
Giri is charged by indictment with five counts of wire fraud. If convicted, he faces a maximum penalty of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Crypto Crime Trends For 2022
A blockchain analysis firm, Chainalysis, previously reported that the amount of cryptocurrency-related crimes reached a new all-time high in 2021, with illegal addresses collecting $14 billion during the year.
The utilization of cryptocurrencies is increasing more quickly than before. In 2021, the total amount of transactions across all cryptocurrencies recorded by Chainalysis increased to $15.8 trillion, an increase of 567% over the total in 2020.
The biggest surprise of all, though, could be that the growth in illegal transaction volume was only by 79%, or by a factor of almost an order of magnitude less than total adoption.
In addition, the value of crypto stolen from victims increased by 82% in 2021 to $7.8 billion. More than $2.8 billion, or almost as much as the rise over 2020’s total, came from rug pulls.
Moreover, by transaction volume, scams continued to be the most common cryptocurrency-based crime, stealing over $7.7 billion in cryptocurrency from victims all around the world.
That is an increase of 81% from 2020, a year in which scam activity dramatically decreased compared to 2019, mainly due to the lack of big Ponzi schemes. That changed in 2021 when Finiko, an Eastern European Ponzi scam primarily preyed on Russian-speaking individuals, collected more than $1.1 billion from its victims.
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