Thomas John Sfraga, a well-known figure in the cryptocurrency world, has admitted to committing wire fraud by tricking numerous individuals into investing in fake ventures, including fraudulent cryptocurrency schemes.
The United States Department of Justice (DOJ) stated on May 17 that Sfraga convinced one victim to invest in a non-existent cryptocurrency called “virtual wallet.” The DOJ also mentioned that Sfraga has experience in podcasting and the crypto industry, and has even hosted crypto events in New York.
According to the DOJ, Sfraga promised his victims returns on their investments as high as 60% within three months. However, it turns out that he was actually operating a Ponzi scheme, where the money paid to earlier investors was not from legitimate profits, but from the investments of new participants.
“In reality, Sfraga used the money for his own benefit, to cover expenses, and to pay back earlier victims and business associates,” the DOJ explained. Shockingly, some of these victims were reportedly Sfraga’s friends and neighbors, whose trust he betrayed to scam over $1.3 million of their hard-earned savings.
While these gains may seem extraordinary, they are not uncommon in the cryptocurrency market. For instance, Bitcoin (BTC) rose by 65% within three months this year, from January 24 to April 24, according to data from CoinMarketCap. As of now, Bitcoin is being traded at $66,860.
In the past 30 days, Bitcoin has experienced an 8.92% increase in value, currently trading at $66,860. This information is sourced from CoinMarketCap. Other altcoins have seen even greater returns during the same period, with Pepe (PEPE) and Dogwifhat (WIF) rising by 722% and 656% respectively.
This incident follows a recent crackdown on cryptocurrency fraud. On May 15, it was reported that the DOJ had charged brothers Anton Peraire-Bueno and James Pepaire-Bueno with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They allegedly obtained $25 million in cryptocurrency in just 12 seconds by exploiting the blockchain’s integrity.
Just a month prior, on April 4, the former head of legal and compliance for the OneCoin fraud scheme, which involved billions of dollars, was sentenced to four years in prison after confessing to aiding in money laundering.
In other news, a UK cannabis millionaire has been making legal transactions using cryptocurrency, referred to as “deals on wheels” in a magazine publication.