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Bitfinex hack launderer ‘Razzlekhan’ wants time served as sentencing looms

Heather Morgan has argued for no more jail time for her role in laundering some of the 120,000 Bitcoin stolen from Bitfinex by her husband Ilya Lichtenstein.

Heather Morgan, also known as the rapper “Razzlekhan,” has asked to avoid more prison time ahead of her sentencing for her role in laundering the Bitcoin her husband stole from the crypto exchange Bitfinex.

“Ms. Morgan has proven herself worthy of a second chance, and we respectfully ask this Court to give her that chance by imposing a sentence of time served,” Morgan’s lawyers asked a Washington, DC, federal court in an Oct. 31 filing.

They added she was subject to “difficult conditions” in her week-long pretrial incarceration — having to recover from surgery and getting COVID-19 — and, since her release in mid-February 2022, had “complied fully with the restrictive terms of pretrial release.”

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Judge pushes Tornado Cash co-founder trial to April 2025

Roman Storm, currently free on bail and facing three federal charges, will have another four months to prepare for his criminal trial.

Tornado Cash co-founder and developer Roman Storm won’t stand trial for money laundering and sanctions violation charges until April 2025.

In a Nov. 1 telephone conference for the United States District Court for the Southern District of New York, Judge Katherine Polk Failla ordered Storm’s trial adjourned until April 14, 2025. The Tornado Cash co-founder’s legal team had been petitioning to dismiss his charges, claiming they were based solely on him writing code for the cryptocurrency mixing service.

In 2023, prosecutors charged Storm and Tornado co-founder Roman Semenov with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money-transmitting business. The indictment prompted outrage from many in the crypto industry.

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Ex-FTX exec sentenced to time served after guilty plea

Nishad Singh will receive no prison time after pleading guilty to six felony charges in February 2023, cooperating with prosecutors and FTX’s debtors after the exchange’s collapse.

A federal judge has sentenced Nishad Singh, the former engineering director of FTX, to time served and three years of supervised release for his role in misappropriating user funds and campaign finance violations.

In an Oct. 30 hearing in the United States District Court for the Southern District of New York, Judge Lewis Kaplan sentenced the 29-year-old Singh to time served. He was the fourth individual named in the indictment of FTX executives to stand before a judge following sentencing hearings for former CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison, and former FTX Digital Markets co-CEO Ryan Salame.

According to reporting from the courtroom by Inner City Press, Singh’s lawyers alleged “most of” the fraud at FTX was the result of Bankman-Fried’s and Ellison’s actions. The former FTX executive said he was “overwhelmed with remorse” for his role.

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

FTX CEO hints Nishad Singh should remain free to assist bankruptcy case

John Ray, who took over as FTX CEO in November 2022, suggested Nishad Singh’s cooperation in the firm’s bankruptcy would be “important to maximize recovery” for creditors.

Scheduled to be sentenced on the afternoon of Oct. 30, former FTX engineering director Nishad Singh has submitted an eleventh-hour letter from the company’s current CEO, who said he would provide “further assistance and cooperation” in the firm’s bankruptcy case.

In an Oct. 29 filing in the United States District Court for the Southern District of New York, Singh’s lawyers filed a sentencing letter from FTX Trading Ltd. CEO John Ray detailing the former engineering director’s assistance in the firm’s Chapter 11 case. According to the FTX CEO, Signh assisted the FTX debtors with information about the firm’s computers shortly after the firm filed for bankruptcy, provided relevant documents, and helped return Bahamian property purchased with company funds.

Source: SDNY

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Hacker behind fake Bitcoin ETF X post pleads not guilty

Reports from the courtroom suggested that prosecutors would offer a deal for Eric Council Jr., who allegedly helped compromise the SEC’s X account.

Eric Council Jr., the individual charged over his involvement for allegedly hacking the United States Securities and Exchange Commission’s X account and posting a message suggesting that Bitcoin exchange-traded funds (ETFs) had been approved, has pleaded not guilty in a DC courtroom.

In an Oct. 25 arraignment before Judge Amy Berman Jackson in the US District Court for the District of Columbia, Council Jr. entered a plea of not guilty for one charge of conspiracy to commit aggravated identity theft and access device fraud. He was allegedly part of a group that hacked the SEC’s X account in January, publishing a post that claimed the commission had officially approved spot Bitcoin (BTC) ETFs for the first time.

The fake SEC X post — since removed — announcing the approval of spot Bitcoin ETFs. Source: US SEC/X

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Homeowner lawsuit over $170K crypto theft rejected on appeal  

A United States appeals court said a district court was right to toss Ali Sedaghatpour’s lawsuit claiming that his insurer, Lemonade Insurance, should cover him for a crypto scam loss.

A homeowner’s attempt to sue his insurer for failing to cover his $170,000 loss to a crypto scam was rejected by a United States appeals court, with a three-judge panel ruling there had been no error in dismissing his case. 

The Fourth Circuit Appeals Court ruled on Oct. 24 that a Virginia District Court judge was correct in ruling that Ali Sedaghatpour had no breach of contract claim against Lemonade Insurance because his homeowner’s policy only covered “direct physical loss” of property.

Sedaghatpour sued Lemonade Insurance in 2022, claiming the insurer should have covered him under the policy for $170,000 in crypto stolen from him in a scam.

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

US gov’t cites ex-FTX exec’s ‘exemplary cooperation’ before sentencing

Prosecutors asked Judge Lewis Kaplan to consider Nishad Singh’s “substantial assistance” to the government in its case against Sam Bankman-Fried at sentencing.

Prosecutors said former FTX engineering director Nishad Singh, who pleaded guilty and cooperated with authorities, provided “substantial assistance” to the United States government, hinting the judge should be lenient at sentencing.

In an Oct. 23 filing in the US District Court for the Southern District of New York, US Attorney Damian Williams asked Judge Lewis Kaplan to consider Singh’s cooperation, which helped in the prosecution of former FTX CEO Sam “SBF” Bankman-Fried and former FTX Digital Markets co-CEO Ryan Salame. Singh is scheduled to appear before the judge on Oct. 30 for sentencing after pleading guilty to fraud and conspiracy charges in 2023.

According to prosecutors, Singh’s testimony at SBF’s trial was a “core part” of the government’s case by helping the jury understand “how FTX’s code permitted the illegal use of customers’ funds” and “identif[ying] in detail the transactions by Bankman-Fried that involved the use of stolen money.”

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Former Celsius CEO to return to court on Nov. 13

Judge John Koeltl ordered Alex Mashinsky and prosecutors to appear in court on Nov. 13 to address the former Celsius CEO’s motion to dismiss fraud and market manipulation charges.

Alex Mashinsky, the former CEO of crypto platform Celsius, will appear in a New York courtroom for the first time in months for oral arguments related to his motion to dismiss charges.

In an Oct. 23 filing in the United States District Court for the Southern District of New York, Judge John Koeltl ordered Mashinsky and prosecutors to appear in court on Nov. 13 to “preserve testimony” and address the former Celsius CEO’s motion to dismiss certain charges in the indictment. In January, Mashinsky’s lawyers filed motions to dismiss charges related to commodities fraud and market manipulation.

Source: SDNY

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Judge delays sentencing of IcomTech promoter to allow testimony

Gustavo Rodriguez, who was initially scheduled to be sentenced following his conviction for conspiracy to commit wire fraud, will testify under oath on Oct. 25.

Gustavo Rodriguez, one of the promoters of the cryptocurrency mining and trading firm IcomTech convicted of wire fraud, will have a few more days to prepare for his testimony and cross-examination before sentencing in a New York courtroom.

In an Oct. 22 hearing in the United States District Court for the Southern District of New York, Rodriguez’s lawyers requested Judge Jennifer Rochon grant an evidentiary hearing, claiming the former IcomTech promoter wanted to testify at his March 2024 trial. Judge Rochon said the court would hear testimony from Rodriguez and a witness on Oct. 25.

Rodriguez was one of two IcomTech promoters — along with his colleague David Brend — charged in the indictment against the project’s founder, David Carmona. Authorities alleged IcomTech amounted to a crypto-based Ponzi scheme, siphoning more than $8 million from users between 2018 and 2019.

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’

Indicted NYC mayor leaves questionable crypto legacy as controversy mounts

Before his indictment on criminal charges, NYC Mayor Eric Adams promised to turn the city into a major crypto hub.

Three years before cryptocurrency became a talking point in the United States presidential election for the first time, a different crypto-focused race was brewing in New York City to determine who would replace outgoing Mayor Bill DeBlasio.

Democrat Eric Adams was squaring off against Republican Curtis Sliwa, and both were campaigning on the promise of being pro-crypto mayors. Adams had recently defeated Andrew Yang, another crypto proponent, in the Democratic Party primary. 

On the campaign trail, Adams promised to make NYC the “center of Bitcoins.” He was elected mayor in November 2021, after which he continued to pledge the city would become “the center of the cryptocurrency industry” and argued cryptocurrency should be taught in schools.

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Canada’s new prime minister once said Bitcoin had ‘serious deficiencies’