Israeli Police recommend charges against businessman Moshe Hogeg as global crackdown on crypto scams rages on

On Aug 23, 2023

In a development that further underscores the escalating global crackdown on crypto scams, Israeli police have accused technology entrepreneur Moshe Hogeg of defrauding investors out of $290 million in a series of cryptocurrency scams, according to Bloomberg.

Hogeg, the founder and co-CEO of Sirin Labs AG, and several unnamed associates are suspected of misappropriating millions of dollars from Israeli and foreign investors raised between 2017 and 2018 for four cryptocurrency startups. The funds, instead of being utilized for the intended purposes, were allegedly misappropriated for personal use. The two-year investigation involved questioning 180 witnesses, gathering 900 pieces of evidence, and making significant funds and asset seizures.

The list of accusations against Hogeg includes fraud, theft, money laundering, forgery, and tax offenses. The police have forwarded their recommendation to Israeli prosecutors, who will ultimately decide on pursuing charges. Hogeg, who was arrested in 2021 and later released under house arrest, has yet to respond to these allegations through his attorney.

Crackdown

This case against Hogeg, however, is not an isolated incident but part of a broader, more robust crackdown on illicit cryptocurrency activities worldwide. The Federal Bureau of Investigation (FBI), for example, has significantly elevated efforts to tackle the misuse of cryptocurrencies. A recent FBI forfeiture notice detailed numerous seizures, totaling 195 instances of major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) from various states and jurisdictions.

Recent legal developments suggest an intensifying enforcement crackdown within the crypto industry. This aggressive wave of enforcement actions against crypto scams has led to arrests or charges against such erstwhile industry giants like Sam Bankman-Fried, Alex Mashinsky, Do Kwon, and more. Moreover, the Department of Justice (DOJ) is reportedly considering charges against Binance and its CEO, Changpeng Zhao.

Market manipulation and securities fraud cases have also drawn the attention of prosecutors. Earlier in the year, the SEC charged Avraham Eisenberg with stealing $116 million from the Mango Markets platform through manipulation of its governance token. Furthermore, insider trading charges at OpenSea have seen Nate Chastain sentenced to three months in prison.

The SEC also has filed extensive charges against Binance and Binance.US for securities law violations, evading U.S. regulations, and misleading users about trading volume accuracy and protections against wash trading.

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