The government’s going after alleged crypto scammers as market crashes

Illustration by Alex Castro / The Verge

The US government seems to be working on a solution to the cryptocurrencies scam. The Commodity Futures Trading Commission, Federal Bureau of Investigation, and Department of Justice all said on Thursday that they were taking action against people accused of carrying out multimillion or billion dollar schemes. One of the cases involves knock-off apes, one is the largest fraudulent scheme involvingBitcoin charged in any CFTC case, and the other involves someone nicknamed "the Cryptoqueen." There is a wave of enforcement taking place against a backdrop of falling prices.

The company that was run by a South African man, called Mirror Trading International (MTI), was the subject of an action filed by the Commodity Futures Trading Commission. The commission says that MTI told potential investors that it had a bot that could invest in opportunities that individual investors wouldn't be able to. People are said to have contributed 29,000 Bitcoins to the fund in hopes of getting a return on their investment. The CFTC says that the value of the digital currency was at one point over $1 billion.

All of the Bitcoins they accepted from the pool participants were misappropriated. The commission says it was a multi level marketing scheme. The agency warns that it may not be able to get the money back for the alleged victims because the wrongdoers may not have enough funds. Steynberg was recently arrested in Brazil, according to the Commodity Futures Trading Commission.

The FBI wants to make sure that the same thing happens to Ruja Ignatova. She was put on the bureau's most-wanted fugitive list for her alleged role in the OneCoin scam. In our story about Ignatova's brother, who was arrested for charges related to the scheme, we mention that Ruja Ignatova helped people invest in a One coin that didn't work.

One coin was called one of the largest Ponzi schemes in history. $100,000 is offered by the FBI for information that leads to Ignatova's arrest.

There isn't evidence an actual blockchain was involved, so "Cryptoqueen" is a bit of a misnomer for Ignatova. Someone better suited for the throne would be someone who has been involved in billion-dollar schemes.

Let's finish this round up with a set of stories from the DOJ. On Thursday, the department announced charges in four separate cases that it says "serve as a crucial reminder that some con artists hide behind trendy buzzwords, but at the end of the day they are just seeking to separate people from their money." One of those cases involves an NFT collection that the DOJ alleges was a scam.

An alleged Ponzi scheme that generated almost $100 million, a "purported" cryptocurrencies investment platform, and a trading pool that said it used an investment bot are all similar. The same old tricks are being covered up by fraudsters with the use ofcryptocurrencies.

The one ray of hope is that the scam may become less attractive as major coins such asBitcoin andEthereum fall in value like they have been doing over the past few months. The crash comes at the expense of companies that operate within the law. Major exchanges have laid off large portions of their workforce, some coins have plummeted in value, and some investors have been left unable to withdraw their funds. Someone nicknamed "Bitcoin Jesus" is said to have helped in one case.

Do you know how far the price of Bitcoin has fallen? It is now worth $564 million, according to cointelegraph. It is subject to change moment by moment.