A former investment banker has been arrested and charged with wire fraud in connection with an alleged cryptocurrency fraud.
Rashawn Russell, who was a Financial Industry Regulatory Authority-registered broker, has been charged with one count of wire fraud related to his alleged role in the scheme, the United States Department of Justice said in a Tuesday (April 11) press release.
Russell allegedly promised investors he would use their funds for cryptocurrency investments; told them that they would receive large and, in some cases, guaranteed returns; and then misappropriated much of their assets, according to the press release.
When investors asked to be repaid, Russell allegedly said, falsely, that he had wired them the money that they had given him to be invested, the release said.
This report is the latest in a series of cases that allege that claims around cryptocurrency have been used to put a new spin on old-fashioned methods of fraud.
For example, in November 2022, a New York man pleaded guilty to defrauding customers in a case in which he told them he would provide them with crypto-mining computers (“Miners”) and Miner hosting services but instead kept the money and didn’t deliver what he had promised.
“Cryptocurrency mining has generated much media attention and public excitement in the past few years, but new forms of money and investment can also generate fresh opportunities for old-fashioned fraud,” U.S. Attorney Damian Williams said at the time.
As PYMNTS reported in November 2022, the promise of “the next big thing in crypto” has been used to peddle bogus coins, make false claims and swindle people out of their money.
In the United Kingdom, the Financial Conduct Authority (FCA) received 45% more reports of crypto assets scamsduring the year that ended June 2022 than it received during the previous year.
In the U.S., the Consumer Financial Protection Bureau (CFPB) received more than 8,300 complaints related to crypto assets between October 2018 and September 2022 and said most of them were received in the last two years.
“Our analysis of consumer complaints suggests that bad actors are leveraging crypto assets to perpetrate fraud on the public,” CFPB Director Rohit Chopra said at the time.
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