Update (Aug. 21, 9:50 pm UTC): This article has been updated to include information about the criminal case against Edward Zimbardi.
Former Alameda Research and FTX executives receive 5-year trading bans
On Tuesday, the US District Court for the Southern District of New York (SDNY) entered consent orders related to a 2022 enforcement action against former Alameda Research CEO Caroline Ellison and crypto exchange FTX co-founder Zixiao “Gary” Wang.
The orders imposed by the US Commodity Futures Trading Commission (CFTC) required that Ellison and Wang receive a five-year trading ban related to their roles in the crypto exchange’s collapse. The CFTC also ordered that the Alameda CEO receive a 10-year registration ban, while Wang received an eight-year registration ban.
According to CFTC enforcement director David Miller, the orders reflected Wang’s and Ellison’s “material assistance in the Commission’s FTX-related investigations.” The civil case is separate from criminal cases involving the misuse of customer funds at FTX, in which Ellison was sentenced to two years in prison and Wang received time served.
US prosecutors file opposition to Polymarket trader over $400,000 Maduro bet
On Wednesday, lawyers representing the US government in SDNY filed their opposition to a motion to dismiss from Gannon Ken Van Dyke, a US soldier who allegedly made more than $400,000 using event contracts on prediction market platform Polymarket using nonpublic information. Van Dyke was tied to the military operation that removed Venezuelan President Nicolás Maduro in January.
Related: Judge stays CFTC’s case against US soldier over prediction market bets
The US soldier’s motion to dismiss, filed on July 31, included claims that the Commodity Exchange Act, at the center of three of the charges he faces, was “ambiguous” in treating event contracts as “swaps” under the CFTC’s purview. In its Wednesday filing, the US government argued that Van Dyke “advances hypotheticals, edge cases, and ongoing litigation over state gaming laws” that were unnecessary to decide in order to move forward with the case.
“Van Dyke’s motion asks the Court to make a factual determination not appropriate at the motion-to-dismiss stage,” said SDNY Deputy US Attorney Sean Buckley. “His argument relies on speculative assertions about facts, based on improper inferences from the Indictment and incorrect conclusions about the nature of the charge, to claim that facts do not amount to ‘property.’”
As of Friday, the court had not posted any decision on the motion to the public docket.
Judge unseals 25-count indictment against alleged $165 million crypto fraudster
On Monday, a Georgia judge ordered an indictment unsealed involving an individual allegedly behind a $165 million cryptocurrency Ponzi scheme.
Initially indicted on July 8, Edward Zimbardi will face wire fraud and money laundering charges in the Northern District of Georgia after being deported from Fiji, where he fled after allegedly committing the crypto scheme. According to prosecutors, Zimbardi “tricked thousands of people to invest in his ‘Crypto Program’ with false promises of enormous returns.”
Magistrate Judge Anna Howard ordered Zimbardi’s indictment unsealed this week, showing that the alleged crypto fraudster was being charged with 12 counts of wire fraud, one count of money laundering conspiracy and 11 counts of transactional money laundering based on activities at the Crypto Program between 2022 and 2023.
Prosecutors are also seeking the forfeiture of the proceeds of Zimbardi’s alleged wire fraud and money laundering and crypto already seized upon potential conviction. The indictment listed 11.87 Bitcoin (BTC), 2.15 Ether (ETH), 713,344,695 Shiba Inu (SHIB), 47,110 USDt (USDT), 12,095 USDT0, 3.3 million XRP, 1,095 Dogecoin (DOGE), 10.2 million Osaka Protocol (OSAK) and 11.97 Polygon (POL) seized by Dutch authorities in 2024 — worth about $6 million combined.
Magazine: MiCA cracks down on USDT in Europe… but no one else cares
