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Court Orders UK Man to Pay $571m for Operating Fraudulent Bitcoin Trading Scheme
- WJW 6y ago> The court’s March 2, 2021 order requires Reynolds to pay nearly $143 million in restitution to defrauded customers and a civil monetary penalty of $429 million. That is a... robust amount of damages. OTOH: > The CFTC cautions victims that restitution orders may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets.
- mpeg 6y agoAlso, it seems they haven't caught the scammer, and he probably keeps most of his assets in crypto that can't be seized. All they'll be able to get is whatever fiat he had under his name.
- unishark 6y agoApparently has been missing throughout the court cases for the last year. It was a default judgement. Kind of annoying trying to dig up that info the internet; there's a million websites out there all in line to clog up search engines with the same limited facts. They need to cluster them by content or something. Even in the days before crypto, scammers could hide money in other ways. They need to catch him.
- fogihujy 6y agoI suspect they won't catch him. Building a new identity isn't really that hard, especially since the guy has had some time to do it, and (I assume) money to pay for it.
- JumpCrisscross 6y ago> Building a new identity isn't really that hard No. But he will have effectively given up all his known wallets. If he touches them, he’ll have lit himself up.
- chefkoch 6y agoThen they know he's still alive but not his new identity? Would a "grey" crypto market refuse to trade (some) of the coins into another less traceable crypto?
- swiley 6y agoIt still leaves a trail that could be subpoenaed.
- chefkoch 6y agoHow would that bother you? Could they trace you with that information? I don't know about that to be sure. If you operate a grey crypto market your already with one foot in a US jail.
- swiley 6y agoIs trading on IRC illegal? Everyone used to do that and I wouldn't call that "grey." If they truly are interested in finding him it's straightforward and within their power, just a bit tedious.
- chefkoch 6y agoI thought there we're markets that are only accessible through vpns or on the darknet.
- swiley 6y agoAnything you can get to via a normal VPN isn't secret, those just help you get around local firewalls. As for exchanges on TOR: maybe? I haven't heard of any and IRC was rough and expensive enough. Exchanging bitcoin on TOR sounds like a great way to loose all of it.
- JumpCrisscross 6y ago> Would a "grey" crypto market refuse to trade (some) of the coins into another less traceable crypto? No, but every wallet it touched would be flagged by AML software, making it ineligible for e.g. sale to an institution or deposit at Coinbase. That reduces its value, albeit not to zero.
- cosmodisk 6y agoNot sure if it's applicable in this case,but the UK has an interesting concept where you might end up in a prison with additional years piled on for failure to pay the outstandings.There were some high profile cases were VAT fraudsters kept getting additional years for failing to pay the taxman.
- londons_explore 6y agoYou won't get prison for the inability to pay... But you might get prison for deliberately not paying even if you can pay, or for lying on government forms/falsifying records.
- cosmodisk 6y agoI could have constructed my previous comment better: yes, nobody's going to prison for sime non-paymens but rather fraudulent activity and failure to compensate the victims of such actions.
- fjeifisjf 6y agoThe US governments love putting people in jail for inability to pay fines. But mostly <$1000 fines and poor people.
- deleted 6y ago[deleted]
- manarth 6y ago> Federal Court Orders Man to Pay $572 Million > Reynolds solicited at least 22,190 bitcoin ₿22,190 × $57,916 ≈ $1,285 Million. Looks like crime does pay – pays around $713 Million. Not a bad return for around 6 months of work.
- Filligree 6y agoWell, except if he tried to sell them all the bottom would fall out of the 'market'.
- dylkil 6y agoaccording to livecoinwatch[1] a $1.8 billion sell would have a 2% price impact on bitcoin [1]https://www.livecoinwatch.com/price/Bitcoin-BTC https://www.livecoinwatch.com/price/Bitcoin-BTC
- londons_explore 6y agoThis is a lie. Lots of that apparent liquidity is fake buy/sell orders that will disappear milliseconds before you manage to use them... Even a sell of $10M can move the market 2%.
- ur-whale 6y ago> This is a lie. Source?
- londons_explore 6y agoI'm not sure how to cite "I placed a sell order to match an existing market order, and the majority of the market order was withdrawn 1 millisecond before my order was confirmed, as seen on the websocket message timestamps, and this happened multiple times".
- gruez 6y ago
- Proven 6y agoOuch. It's interesting how they didn't go after the affiliates (who must have known that was a Ponzi). Only the Fed is allowed to operate an anti-constitutional, fraudulent currency scheme with impunity.
- easytiger 6y agoHow would enforcing a thing like this operate? Surely there would have to be a subsequent UK case if that's where he is resident, to solicit any enforcement
- freddie_mercury 6y agoWhy does there have to be a UK case? Governments extradite people all the time.
- easytiger 6y agoHow does extraditing him make him pay up anything? It is also not guaranteed that the UK courts would agree to the extradition.
- kache_ 6y agoshould have used monero
- altacc 6y agoDepressingly, the scam he used (claiming to run advanced trading algorithms to guarantee a profit for his 'investors' and using MLM to spread the con) is repeated over and over again and seemingly impossible to stop. One of my in-laws is a serial MLM patsy and has totally fallen for one of these. Both AI and cryptocurrency are in the news a lot, making it easy for con-artists to dazzle people with marketing techno-babble and promises of guaranteed riches. (Obviously not all trading schemes are complete cons, but so many are.)
- malthaus 6y ago"all trading schemes are complete cons" should be your default assumption
- Nextgrid 6y agoEspecially considering if someone knows about a scheme that actually works (in the sense that it significantly beats the market), they would be using it quietly for themselves instead of sharing it with other people.
- divs1210 6y ago> they would be using it quietly for themselves instead of sharing it with other people investment banking is a real job
- asddubs 6y agodepending on who you ask anyway
- justaj 6y agoWouldn't it make sense to gather as much funds (from other investors) in order to achieve the most leverage for that scheme?
- smabie 6y agoall trading schemes that you would have access to are cons. That is to say, real players aren't soliciting investments from retail.
- randomtandom 6y agoThis is interesting, it shows there is CFTC interest in virtual currency markets and they are willing to prosecute.
- deleted 6y ago[deleted]
- blunte 6y agoThere are so many of these scams in the wild. I have a former client who is constantly spamming me with "can you check this out and tell me if it is legit?" emails. They are so formulaic and obvious, but people go blind with greed. I hope all the scammers eventually suffer one way or another, but I worry that there are so many that many of them will slip by.
- fjeifisjf 6y agoI hope you charge a good fee for your evaluations.
- codegeek 6y agoToo many trading/crypto scammers out there and youtube especially is full of them with their shitty ads. Amazing how gullible people are and they fall for these "get rich quick" schemes. Hey folks, remember that there is no AI behind trading that a youtuber can master. If there is, they would definitely not share with you. Please stop losing your hard earned money to shit scams.
- jcpham2 6y agoStandard white collar slap o' the wrist
- CynicusRex 6y agoA pyramid scheme on top of a pyramid scheme. Outlaw this nonsense already.