SEC, FBI, DOJ join forces to bust crypto fraudsters and more

SEC, FBI, DOJ join forces to bust crypto fraudsters

The U.S. Securities and Exchange Commission (SEC), FBI and U.S. Department of Justice coordinated a large-scale takedown of fraudulent cryptocurrency firms involved in market manipulation. The SEC filed civil suits against crypto firms Gotbit Consulting, ZM Quant Investment, CLS Global and their associates, accusing them of market manipulation, including wash trading (moving assets between accounts to give the appearance of high trade volume and inflate the value of those assets) and unregistered securities offerings. To lure and capture the faux crypto enterprises, the FBI created NexFundAI, a crypto token. ZM Quant and CLS Global are implicated in fraud concerning NexFundAI. Gotbit Consulting and its marketing director, Fedor Kedrov, are accused of manipulating the market on behalf of Saitama, Robo Inu and NexFundAI crypto projects. The SEC seeks penalties, disgorgement of ill-gotten gains and permanent injunctions against the defendants. (See “SEC, FBI, DOJ coordinate takedown of fraudulent crypto firms,” by Derek Andersen, CoinTelegraph, Oct. 9, 2024.)

Grate expectations: Cheese heist causes London dairy meltdown

The theft of 22 metric tons of rare cheddar, valued at $390,000, from London-based Neal’s Yard Dairy soured the British artisanal cheese industry. The police arrested one man in connection with the crime in October 2024. The heist, dubbed the “grate cheese robbery,” began when Neal’s Yard received a large order from a fraudulent buyer posing as a wholesale distributor for a French retailer. The order, filled by several cheese producers, made it to France in September, but Neal’s Yard never received payment. Neal’s Yard reported the theft to the police in October upon realizing the buyer had disappeared. (See “That’s a Lot of Cheddar: Scammers Steal $390,000 of British Cheese,” by Amelia Nierenberg, The New York Times, Oct. 29, 2024 and “‘Grate cheese robbery’: Man arrested after 24 tons of cheddar totaling $390,000 is stolen in London,” by Gabriella Rudy, NBC News, Oct. 31, 2024.)

TD Bank’s AML lapses result in record $3 billion fine

TD Bank was slammed with a record $3 billion fine for its role in facilitating money laundering by drug cartels and will face four years of oversight by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), a relocation of its anti-money laundering (AML) office to the U.S. and U.S. market growth restrictions. Under the settlement, the bank must pay $1.3 billion to FinCEN and $1.8 billion to the U.S. Department of Justice for its failure to adequately monitor and report suspicious transactions. The bank’s lapses in AML practices enabled cartels to launder more than $670 million through their accounts from 2018 to 2024. In response, TD Bank pledged to invest in stronger AML measures. (See “TD Bank hit with record $3 billion fine over drug cartel money laundering,” by Jordan Valinsky and Matt Egan, CNN, Oct. 10, 2024.)