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Former investment broker of JPMorgan and Deutsche Bank may face up to 20 years in prison for cryptocurrency fraud.
Rashon Rassen, a former JPMorgan employee, is facing accusations of deceiving investors into investing in altcoins, promising high returns, only to divert the funds to his personal use.
He used some of the money for gambling and paying off previous investors, therefore running a Ponzi scheme. Additionally, Rassen is accused of fabricating documents to give the impression of profitability, which he used to lure more investors into the scam.
The US Eastern District of New York prosecutor’s office is handling the case. According to the materials presented in court, Rassen doctored a bank balance image, which he sent to an investor to demonstrate significant liquidity.
When another investor requested a refund, Rassen sent them a fake bank transfer confirmation to make it seem like he had returned the money. These actions suggest that Rassen was fully aware of his fraudulent activities and intended to deceive investors to enrich himself.
Previous Cases of Crypto Fraud
This case is not unique, as similar scams have been happening in the cryptocurrency industry. Recently, the US Securities and Exchange Commission (SEC) froze the assets of the BKCoin cryptocurrency hedge fund co-founder, Kevin Kang, who raised $100 million from more than 50 investors and diverted the funds into a Ponzi scheme.
Kang used $3.6 million to pay previous investors and spent $371,000 on personal expenses. He attempted to cover up his crimes by providing investors with falsified documents with inflated bank account balances.
The rise of cryptocurrency crimes
Unfortunately, cryptocurrency investment fraud has become a significant problem in the US, with Americans losing a total of $2.57 billion to fraudulent activities last year. People between the ages of 30 and 49 were the most affected by the fraud. Typically, they were lured into linking their crypto wallets with fraudulent apps for liquidity mining, which allowed criminals to steal funds from wallets and even hack victims’ social media profiles.
In conclusion, the rise of cryptocurrency investment fraud underscores the need for greater regulatory oversight and investor education. Investors should conduct thorough due diligence before investing in any cryptocurrency offering, and regulators must continue to crack down on fraudulent schemes to protect investors.