Last week, two Nigerian fraudsters were detained after committing an extensive fraud to steal "$ 435 million worldwide" from illegal emails, luxury brand showdowns, and Bitcoin.
The duo, identified as Ramon "Hushpuppi" Abbas and Olalekan "Woodberry" Ponle, showed a lavish lifestyle on their Instagram with luxury cars, expensive watches, private jets and gold watches.
The music stopped last week after the FBI extradited them from Dubai over several lawsuits. In the meantime, new documents show that they used Crypto-Exchange Gemini to buy millions in Bitcoin before using peer-to-peer services like LocalBitcoins to redeem these funds.
Twins used to buy millions in BTC
A SEC filing CryptoSlate shows the fraudsters created fraudulent bank accounts for two undisclosed companies in Chicago. They then targeted employees to transfer funds to these accounts, and soon converted them to Bitcoin through Gemini.
A blockchain analysis conducted by independent companies revealed that Ponle cheated “at least 1,495 bitcoins” worth approximately $ 7 million.
The fraudsters used Bank of America, Wells Fargo and other banks to transfer their funds. While they tried to blur their bank tracks with an alias and other tricks; They didn't seem to cover their Bitcoin footprint – which ultimately resulted in them being caught.
Files show that Gemini was the most used exchange of fraudsters. One opportunity shows that they converted $ 2 million to BTC in February 2019:
The transactions amouset to 601 BTC. Bitcoin was trading at around $ 3,500 to $ 4,000 in that period last year.
Eventually, a covert FBI agent pretended to be an OTC trader. The fraudsters bit the bait and were later arrested.
Track soccer stars and bitcoin
Abbas and Ponle used Paxful and LocalBitcoins to curb illegal profits, the SEC report said.
B.Other outlets have been criticized in the past for their poor KYC practices and user accountability.
In the meantime, the two claim they have no wrongdoing, CNN reported Monday. Her lawyers say Abbas and Ponle are legitimate business people who run real estate advisory services and work as Instagram influencers.
When CryptoSlate looked at Abbas & # 39; Instagram, he seemed to have contacts in interesting areas. There's a picture with English and Chelsea soccer star Tammy Abraham and other U-21 players. At the time of going to print, there were no reports or comments from Chelsea regarding their relationship.
Amusingly, it was Bitcoin's blockchain instead of information provided by the bank that helped the FBI track down the scammers.
For purists of decentralization, this means a violation of financial identity and an argument for the pseudonymity of Bitcoin.
For law enforcement, however, this means that Bitcoin (and other cryptocurrencies) can be part of a well-functioning financial system in which professional analytics companies track fraudulent transactions on request.
Only time will tell how the crypto ecosystem will develop. an independently operated system or circle closes with regulators and strict KYC.
A similar fraud was committed in China just last week after regulators attributed Ethereum's transactions to the perpetrators. As CryptoSlate reported, the fraudsters cheated on ETH to fund a lifestyle with lavish villas and ferraris.
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