This summary text is fully AI-generated and may therefore contain errors or be incomplete.
The US Department of Justice (DOJ) has charged two individuals with operating a $25 million AI cryptocurrency trading Ponzi scheme. David Gilbert Saffron, an Australian national, and Vincent Anthony Mazzotta Jr., a resident of Los Angeles, allegedly ran trading programs that claimed to use an automated trading bot with artificial intelligence to generate substantial profits from victims’ cryptocurrency investments. However, instead of investing the funds as promised, the defendants used the money for personal expenses such as hiring a personal chef, renting luxury accommodations, and taking private chartered flights.
In addition to the Ponzi scheme charges, the defendants are accused of using crypto mixers and interchain swaps to conceal the victims’ cryptocurrency investments. The scheme operated under various names, including Federal Crypto Reserve, Omicron Trust, Circle Society, Bitcoin Wealth Management, Mind Capital, and Cloud9Capital.
Saffron and Mazzotta face charges of conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release.
The DOJ has been focusing on improving the compliance of blockchain firms, particularly after the sanctioning of Tornado Cash, a cryptocurrency mixer, last year. The agency recently announced its scrutiny of Binance’s compliance following the exchange’s $4.3 billion settlement for money laundering and violating US sanctions. Various divisions within the DOJ’s criminal division, including those responsible for money laundering and asset recovery, national security, counterintelligence, and export control, as well as the United States Attorney’s office for the Western District of Washington, will closely monitor Binance’s activities.