They claim Jenner misled investors by promoting JENNER as a high-potential token without revealing any of the associated risks or properly registering it with the SEC. Meanwhile, Daren Li pleaded guilty to laundering $73 million in stolen crypto funds, while U.S. prosecutors moved to seize $18.5 million tied to alleged bribes that were payed by FTX’s Sam Bankman-Fried. Crypto crime also recently took a tragic turn after missing crypto influencer Kevin Mirshahi was found dead after his abduction in Montreal.
Investors File Lawsuit Against Caitlyn Jenner
Caitlyn Jenner is facing a class-action lawsuit that was filed by Naeem Azad and Mihai Caluseru. They are investors from the United Kingdom and Romania, and alleged she sold the meme coin JENNER as an unregistered security.
The complaint was submitted to a federal court in California on Nov. 13, and it accuses Jenner and her manager, Sophia Hutchins, of misleading investors by promoting the token without the proper disclosures that are required under U.S. securities laws.
Azad and Caluseru claim they lost more than $56,000 after buying JENNER tokens on Ethereum and Solana. They argue that they would not have invested in the crypto if it was not for allegedly misleading statements made by Jenner. According to the lawsuit, Jenner ”willfully failed” to register JENNER with the U.S. Securities and Exchange Commission (SEC), which left investors without crucial information about the token’s risks. The suit also states that this lack of transparency resulted in big financial losses for buyers.
The JENNER meme coin was originally launched on Solana in May through the platform Pump.fun. However, the project soon stirred controversy after Jenner and other people accused collaborator Sahil Arora of fraudulent conduct. The token was subsequently relaunched on Ethereum.
Since then, JENNER’s value plummeted, and its market value dropped to close to $170,000 from a peak of $7.5 million, according to CoinGecko.
JENNER’s price action over the past 3 months (Source: CoinGecko)
The complaint also alleges that Jenner abandoned the project by stopping active promotion, which left investors with major losses. Additionally, it claims that Jenner initially promoted the token with market predictions, yet these assurances failed after Arora allegedly sold a large share of his holdings which triggered a price collapse. The plaintiffs argue that Jenner had a duty to warn investors about this risk, which she ”willfully failed” to uphold.
The lawsuit also raises some serious concerns about a 3% transaction fee on Ethereum JENNER transactions, which the plaintiffs say was not properly disclosed and allegedly benefited Jenner financially. They also accuse her of using token proceeds to fund exchange listings and buybacks that never really materialized. Furthermore, the suit states Jenner did not disclose her or insiders’ holdings in JENNER, which she allegedly bought at a very favorable price.
Azad and Caluseru’s claims include securities fraud, common law fraud, and violations of securities laws against Jenner.
Scammer Admits to Role in $73M Fraud Case
Caitlyn Jenner is not the only person in the crypto space facing legal scrutiny. Daren Li, a 41-year-old dual Chinese citizen, pleaded guilty in a California federal court to conspiracy to commit money laundering in connection with a scheme that laundered $73 million that was stolen through various crypto investment scams, including “pig butchering.”
According to court documents that were filed on Nov. 11, Li instructed others to open U.S.-based bank accounts under shell companies to obscure the origin and ownership of the stolen funds between August of 2021 and April of 2024. After victims transferred funds into these accounts, the money was converted into Tether (USDT) and distributed to wallets that were controlled by Li and his accomplices.
(Source: CourtListener)
Prosecutors revealed that one of the wallets received more than $341 million in digital assets. Nicole M. Argentieri, the head of the Justice Department’s Criminal Division, shared that Li operated the scheme internationally, and also relied on a network of shell companies and foreign bank accounts.
Li admitted that about $73.6 million in stolen funds were directly deposited into the scheme’s bank accounts. An additional $59.8 million was funneled from U.S. shell companies to help the money laundering operation. He was arrested on April 12 at Atlanta’s airport, and his co-conspirator Yicheng Zhang was detained in Los Angeles on May 16.
After his guilty plea, Judge R. Gary Klausner scheduled Li’s sentencing for March 3 of 2025. He faces up to 20 years in prison, three years of supervised release, and a fine of $500,000 or twice the profits from the offense. Prosecutors also raised the possibility that he may be ordered to pay restitution to the victims, which could be anywhere between $4.5 million and $73 million.
U.S. Moves to Seize $18.5M in Crypto Tied to FTX Bribery
Meanwhile, U.S. prosecutors are asking permission to seize a crypto account that is allegedly tied to bribes paid to Chinese officials by FTX co-founder Sam Bankman-Fried. In a Nov. 12 filing in the New York District Court, they claimed a Binance account was used to launder funds that were intended as bribes before FTX’s collapse in 2022. The account was initially valued at $8.6 million in December of 2023, and is now worth close to $18.5 million due to market gains.
According to the lawsuit, Chinese authorities froze two Alameda Research accounts on Chinese crypto exchanges holding $1 billion in assets in 2021. On Nov. 16, 2021, Bankman-Fried allegedly transferred a $40 million Tether (USDT) bribe to a private wallet, which led to the unfreezing of Alameda’s accounts. Prosecutors claim that additional crypto payments were authorized by Bankman-Fried to complete the bribe. Former Alameda CEO Caroline Ellison testified that the total bribe was approximately $150 million.
The account that is being targeted by prosecutors has five deposit accounts allegedly used to obscure the bribe’s flow. It also shows very frequent deposits and withdrawals, with nearly daily deposits of Bitcoin and stablecoins, which are then later converted into other cryptocurrencies.
On Dec. 21 of 2023, Judge Lewis Kaplan ordered the seizure of this account during Bankman-Fried’s trial. It holds cryptos like Solana (SOL), Cardano (ADA), XRP, Internet Computer (IC), and Avalanche (AVAX).
After FTX’s collapse, Bankman-Fried was convicted of seven felony charges, which led to a 25-year prison sentence that was handed down by Judge Kaplan on March 28.
Missing Crypto Influencer Found Dead
Shockingly, it seems like crypto crimes might be taking on a more violent nature. The body of 25-year-old crypto influencer Kevin Mirshahi, who was abducted from a Montreal condo in June, was found at Île-de-la-Visitation park in Montreal on Oct. 30.
According to local media, a passerby discovered Mirshahi’s decomposed remains, and an autopsy confirmed his identity. Mirshahi was last seen on June 21 when he and three others were abducted. The other three managed to escape.
This is becoming a concerning trend targeting people in the crypto industry. Recently, Dean Skurka, who is the CEO of Canadian crypto firm WonderFi, was also reportedly abducted and forced to pay a $1 million ransom for his release. A Chinese national was also kidnapped and murdered in August by Malaysian nationals who demanded a $1 million Tether ransom.
The investigation into Mirshahi’s death is still ongoing. However, Montreal police have charged 32-year-old Joanie Lepage with his first-degree murder. Mirshahi was a well known figure in Montreal’s crypto community, and previously operated “Crypto Paradise Island,” a private crypto investment firm. Local speculation and social media comments accused Mirshahi of fraudulent activities, though it is unclear if Lepage was involved with his firm.
Mirshahi was also known to Québec’s investment regulator, the Autorité des Marchés Financiers, which banned him in 2021 from working as a broker or adviser. The regulator even recently extended this ban in July, shortly after his abduction.
This article was originally Posted on Coinpaper.com
