A yacht with gold bars found in the creator of a fraudulent cryptocurrency project

The most popular event in the world of cryptocurrencies for people unfamiliar with the blockchain industry is the growth of the market in 2017. On January 1 of that year, Bitcoin was valued at $ 998, and on December 17, its local peak was $ 19,665.

Against this background, many projects brought investors even more income, while others were left with nothing. The latter include the Oyster Protocol project, whose creator was arrested the day before.

In 2017, it became the peak of the popularity of ICO – a format for financing new cryptocurrency projects. Investors were required to deposit a certain amount, for which, after the launch of the cryptocurrency, they received a proportional amount of coins. At times, these tokens have significantly increased in value, due to which investors have become rich. However, sometimes projects existed only on paper, which is why users’ money ended up in the pockets of fraudulent developers.

The Oyster Protocol was also launched in the ICO format, but this happened in September 2018. The creators called the project an online storage platform and promised serious prospects. However, in fact, the developer used it for his own enrichment, and he used an intricate scheme.

What happened to the Oyster Protocol

On December 9, 2020, representatives of the United States Department of Justice announced the arrest of Amir Burno Elmaani, the 28-year-old developer of the Oyster Protocol. The official wording and the reason for the arrest was the creation of a «multimillion dollar tax evasion scheme.» In addition, representatives of the US Securities and Exchange Commission also filed charges against Elmaani, Cointelegraph reports.

The indictment alleges that Amir made millions of dollars selling native tokens on his own platform, Oyster Pearl. At the same time, he did not report his income to the US Internal Revenue Service and, in addition, used shell companies to hide his own traces of participation in this scheme.

Here is a quote from a Justice Department spokesman.

Elmaani made millions of dollars selling the new cryptocurrency, but did not report his income to the US Internal Revenue Service. This happened, among other things, by filing a false tax return, running your business and owning assets through pseudonyms and shell companies, as well as making a profit through nominees and trading in gold.

That is, in fact, the list of claims turned out to be much wider than simple tax evasion. Elmaani not only did not pay taxes, but also actively made sure that representatives of government departments did not find out about his money.

Amir’s 2017 tax return mentions 15,000 dollars received, and in 2018 he indicated zero income. However, according to FBI Deputy Chief William Sweeney, despite «the minimum declared income in 2018, he still managed to spend more than $ 10 million on the purchase of yachts.»

According to law enforcement officials, the blockchain entrepreneur kept gold bars on his yacht and spent huge amounts of cash on personal expenses. Justice Department officials are also confident that he spent $ 700,000 to buy two houses. Sweeney comments on the situation.

After today’s arrest, he will not sail for a long time.

According to representatives of the department, Elmaani began advertising his own token in September 2018. He stated that the Pearl cryptocurrency will become the backbone of the Oyster Protocol platform.

The developer then conducted an ICO, but did so through a shell company that had nothing to do with his real name. He limited himself only to the message that he would receive a share of tokens for the role of the founder.

The coins were later transferred to another address. As Elmaani specified, these were transfers between his wallets, which were necessary to “avoid double taxation”. However, representatives of the Ministry of Justice have a different version.

Elmaani used friends and family members as candidates to generate cryptocurrency income. And then he transferred the funds to his own accounts.

Government officials are also confident that Elmaani was issuing new Pearl tokens, contrary to the claim of a fixed cryptocurrency supply in October 2018. That is, in fact, he used the rights of a developer and created new coins out of thin air, which were then sent to exchanges for sale.

In response, the management of the exchanges delisted Pearl, which affected the rate of the cryptocurrency. Due to the sharp decline in the value of the asset, many investors have suffered losses. Well, the initiator of the project managed to make good money.

Now Elmaani will go to jail. The story has become another proof that the punishment can overtake fraudsters in the cryptocurrency niche. I would like to believe that because of this there will be much fewer investors who want to cheat, but the quality of new projects will be even higher.

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