The 8 Most Notable Cryptocurrency Offenses of 2024

Amid the extreme fluctuations that the cryptocurrency market has experienced over the last year, incidents of crime have been prevalent.

During bull markets, opportunistic criminals often feel emboldened, with Chainalysis data indicating that stolen assets exceeded $2.2 billion in the past year.

This article provides an overview of the notable crypto crimes that made headlines in 2024. A recurring theme? Accountability for offenses committed years prior.

Courtesy: Tiffany Fong

1. Sam Bankman-Fried Sentenced

We start with one of the most significant crypto offenses recorded: the downfall of FTX, which resulted in billions of dollars being misappropriated from unsuspecting clients.

Following a damaging trial in 2023 that led to Sam Bankman-Fried’s conviction for fraud, he received a 25-year prison sentence in March.

Other associates of SBF, who entered plea agreements and testified against him, also faced their own consequences.

Co-CEO Ryan Salame received a longer sentence than prosecutors had requested: seven-and-a-half years.

Caroline Ellison — SBF’s former girlfriend and CEO of the affiliated trading firm Alameda Research — was sentenced to two years in prison but was commended for her contribution to securing the billionaire’s conviction.

However, some executives avoided incarceration entirely. The co-founder of the troubled exchange, Gary Wang, was released, as was the head of engineering, Nishad Singh.

SBF is currently appealing his sentence from a facility in Brooklyn, with a recent Forbes article suggesting he has begun documenting his experiences in a prison diary.

2. Terraform Labs Goes Bust

After erasing $40 billion from the crypto markets in 2022 and triggering a severe bear market that led to the collapse of other companies, Terraform Labs faced a $4.5 billion penalty from the Securities and Exchange Commission.

This settlement prompted the beleaguered company to initiate its own bankruptcy proceedings.

However, several issues remain unresolved — particularly concerning Terra’s founder Do Kwon, who is still in Montenegro after being apprehended while attempting to escape the country with a fraudulent passport.

He is wanted on criminal charges by both the U.S. and South Korea, but extradition has been stalled pending an appeal.

Source: @cz_binance

3. ‘4′ for CZ

Changpeng “CZ” Zhao had positioned himself as a prominent figure in the crypto space as the CEO of Binance, the largest exchange globally.

However, his reputation took a hit when he was sentenced to four months in prison earlier this year — a consequence of his guilty plea to money laundering offenses in 2023.

The number four has long held significance for CZ, as he often used it to dismiss “FUD, fake news, and attacks.”

Critics contended that the judge was overly lenient towards the entrepreneur, and he was released from a low-security facility in California by September.

It wasn’t long before CZ reappeared on the crypto conference scene — attending Binance Blockchain Week in Dubai and the Bitcoin Middle East and North Africa conference in Abu Dhabi.

4. Alex Mashinsky Pleads Guilty

Following FTX and Terraform Labs, the next notable case involves Celsius.

The founder of the troubled crypto lending platform, Alex Mashinsky, has pleaded guilty to commodities fraud and manipulating the price of CEL tokens.

He could face a maximum of 30 years in prison when he is sentenced next April — and has committed not to appeal any sentence shorter than this.

Mashinsky admitted to a judge that he had provided his customers with “false comfort” and accepted full responsibility for his actions.

While he claimed that “banks are not your friends” during Celsius’s peak operations, it became evident that users could not rely on this company either.

Source: FBI

5. The OneCoin Saga Continues

Some crypto crimes continue to be litigated many years after their occurrence, such as the OneCoin Ponzi scheme that transpired between 2014 and 2016.

The former attorney of the project was sentenced to four years in prison back in April. Another accomplice received a 10-year sentence and was ordered to forfeit $392 million along with a yacht, two Porsches, and four properties.

However, one individual has remained remarkably elusive since OneCoin collapsed: “Cryptoqueen” Ruja Ignatova.

She has been on the run for over seven years, still being pursued for defrauding customers out of $4.5 billion. The U.S. is currently offering a $5 million reward for information leading to her capture, although reports this year suggested Ignatova may have been killed.

6. Bitfinex Launderers Jailed

Another long-standing case that reached a conclusion this year involved the infamous hack of Bitfinex in 2016.

Husband-and-wife team Ilya Lichtenstein and Heather Morgan were sentenced after admitting to laundering billions of stolen Bitcoin.

The crypto assets were valued at $4.5 billion at the time of their arrest — with a record-setting $3.6 billion recovered by U.S. authorities — but this BTC now holds a significantly higher value.

Lichtenstein received a five-year prison sentence for what was described as “the most complex money laundering techniques” ever examined by the Internal Revenue Service.

Morgan — an amateur rapper known as “Razzlekhan” who referred to herself as “The Crocodile of Wall Street” — was sentenced to 18 months.

The narrative has since been adapted into a Netflix documentary, while the laptop that led to their downfall is now displayed at the Smithsonian Institute.

7. Operation Destabilise

Efforts have also been made to combat the underground networks that launder cryptocurrency behind the scenes.

“Operation Destabilise” involved British law enforcement dismantling two Russian networks that heavily utilized digital assets to hide wealth and facilitate its movement globally.

Drug traffickers, arms dealers, hackers, and affluent oligarchs are all reported to have benefited from these illicit operations.

The faked post. Source: X

8. SEC’s X Account Hacked

While numerous high-profile social media accounts were compromised this year, the most significant hack occurred in January.

The SEC’s X account was breached, with a post falsely announcing that Bitcoin ETFs had been approved in the U.S. — just days before an official statement was released.

It was later disclosed that the agency did not have two-factor authentication enabled on this account.

By October, an Alabama resident named Eric Council Jr. was arrested on charges of conspiracy to commit identity theft and access device fraud.

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