(*two*)The US Department of Justice (DoJ) today charged Project Investors Inc. (also known as Cryptsy) CEO and founder Paul Vernon with stealing €1 million from wallets controlled by the defunct cryptocurrency exchange, the press announced. agency on Wednesday.
In a 17-count indictment unsealed in Miami federal court, the Justice Department charged Vernon, 48, with tax evasion, wire fraud, money laundering, computer fraud and destruction of records in connection with a federal investigation, among other charges.
The Department of Justice alleges that, between May 2013 and May 2015, Vernon stole more than €1 million from exchange-controlled wallets and used his own crypto wallet to transfer the funds to his personal bank account. But "at no time during this period" did Vernon reveal the theft to his clients.
According to the Department of Justice, in July 2014, Vernon notified Cryptsy employees that a hacker had stolen €5 million worth of bitcoin and other cryptocurrencies from the exchange, but only reported the attack to his clients in November 2015.
The agency claims that in 2016, after moving to China and announcing that Cryptsy was in receivership, Vernon hacked into Cryptsy's servers remotely, stole Cryptsy's database containing customer funds, and destroyed the database. to hide their illegal activity. Vernon remains hidden. Cryptsy closed in 2016.
The Justice Department also alleges that Vernon filed "false and fraudulent" federal income tax returns, declaring and paying less than he owed.
David Silver, a securities fraud and investment loss lawyer who filed a civil lawsuit against Vernon and the stock market, believes Vernon is staying in China. Silver told CoinDesk that he will continue to track the 11,325 bitcoins that "have disappeared and remain intact in private wallets."
"We continue to track these coins in real time," Silver said. "If Vernon ever attempts to liquidate the stolen money, we will work within the limits of the law to freeze and recover that stolen bitcoin."
Read More: Cryptsy CEO Stole Millions From Exchange, Receiver Lawsuit Claims