Jurisdiction

Celsius founder pleads guilty to fraud, facing up to 30 years for scheme in cryptocurrency crackdown

Alex Mashinsky, the founder of Celsius Network, has pleaded guilty to commodities fraud and manipulating the value of his company’s token, CEL. The former CEO of the cryptocurrency lender admitted in court to misleading investors and providing false reassurances about Celsius’ regulatory compliance. He also acknowledged selling his CEL holdings without disclosing this to customers.

The plea deal follows Mashinsky’s indictment on seven counts of fraud, conspiracy, and market manipulation. Federal prosecutors revealed he profited $42 million from selling CEL at inflated prices, while customers were left with substantial losses when Celsius filed for bankruptcy in 2022. Mashinsky faces up to 30 years in prison under the terms of the agreement and will be sentenced in April 2025.

Founded in 2017, Celsius gained popularity by offering high returns on cryptocurrency deposits, but its bankruptcy left many customers unable to access funds. The company has since emerged from bankruptcy and shifted its focus to Bitcoin mining. Mashinsky joins a growing list of crypto executives charged with fraud, including FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison earlier this year.

Mashinsky’s defence lawyer highlighted the decision to plead guilty as a step toward accountability, saying it allows all parties to move forward. Federal prosecutors continue investigating fraud in the cryptocurrency industry as digital asset prices recover.

Dutch regulator begins handling DSA complaints

The Netherlands Authority for Consumers and Markets (ACM) is receiving complaints related to the Digital Services Act (DSA), but it currently lacks formal authority to act until the law is fully transposed by the national parliament. The DSA, which aims to regulate large online platforms and protect users, became applicable in February 2024, but enforcement will only begin once the Netherlands passes the necessary implementing legislation.

Martijn Snoep, Chairman of the ACM, highlighted that enforcement under the DSA is expected to lead to clashes between regulators and Big Tech leaders, although he plans to approach this more neutrally. The ACM focuses on three main areas: ensuring platforms comply with basic rules, protecting minors online, and tackling irresponsible hosting providers. While the Dutch regulator is investigating non-compliant companies, it cannot yet take enforcement actions against foreign firms or force them to share information.

The ACM has received 227 complaints, mostly regarding companies based outside the Netherlands, and while it can redirect these to other regulators, it cannot yet act on them. Snoep emphasised that, despite challenges, the Netherlands is preparing to enhance its regulatory capacity to ensure fair compliance, though he prefers waiting before introducing new legislation on emerging issues like online child safety or advertising.

Despite the slow start, the ACM is confident that over time, as the industry adapts to a more regulated environment, digital platforms will gradually become more compliant with the DSA’s requirements.

Russian court hands life sentence to Hydra founder

The founder of Hydra, a notorious darknet marketplace and crypto mixing service has been sentenced to life in prison by a Russian court. Stanislav Moiseev and 15 accomplices were convicted of running a criminal network that handled over $5 billion in cryptocurrency transactions, while also producing and selling illegal drugs and psychotropic substances. Moiseev was also fined $38,100, with additional fines imposed on his accomplices.

Hydra, which was dismantled in 2022 by German authorities, accounted for 80% of all darknet-related cryptocurrency transactions at its peak. It sold stolen credit card data, counterfeit currencies, and fake identity documents. Despite its shutdown, Hydra’s criminal operations left a significant mark, with its user base reportedly including 17 million customers and 19,000 vendors.

The sentences include prison terms ranging from eight to 23 years for Moiseev’s accomplices, alongside the seizure of properties, vehicles, and nearly a ton of drugs. Russian officials have been investigating Hydra since 2016, but the convictions are subject to appeal.

SEC and ICBC unit reach settlement after ransomware attack

The SEC has settled allegations against ICBC Financial Services, a US-based unit of the Industrial and Commercial Bank of China, following a ransomware attack in November 2023.

The attack disrupted the company’s operations, including its ability to maintain accurate records and notify customers of securities-related transactions for nearly four months.

Regulators cited the firm’s lack of preparation for a significant cybersecurity incident as a factor leading to the breach. Despite this, the SEC refrained from imposing a civil fine, crediting the company’s meaningful cooperation and extensive remedial efforts in addressing the situation.

ICBC Financial Services neither admitted nor denied any wrongdoing in the settlement. The agreement highlights the SEC’s focus on ensuring firms take proactive steps to strengthen their cybersecurity defences.

Wise implements anti-money laundering controls after regulatory review

Wise, the British money transfer firm, has enacted a formal remediation plan following a regulatory review by the Belgian National Bank (BNB) regarding anti-money laundering compliance. In early 2022, the BNB identified that Wise lacked proof of address for hundreds of thousands of customers.

The company worked closely with the regulator to address the issues, implementing a plan requiring customers to provide proof of address within weeks. Non-compliant accounts were frozen as part of the measures. Wise stated it has fully resolved the concerns.

Founded in 2011, Wise aims to simplify international money transfers and is listed on the London Stock Exchange. The BNB declined to comment further on the matter.

Indian police probe Starlink in maritime drug bust

Indian police are investigating how a Starlink satellite internet device was used in a massive drug smuggling operation. Officers in the Andaman and Nicobar Islands seized over 6,000 kilograms of methamphetamine, worth an estimated $4.25 billion, from a Myanmar vessel last week. Six Myanmar nationals were detained in what has become the largest drug bust in the region’s history.

Authorities revealed the smugglers relied on a Starlink device to navigate the deep seas and evade detection. Starlink, which provides internet coverage in international waters, has yet to formally launch in India, pending government approvals. Investigators aim to trace the device’s purchase and usage history to uncover potential links to smuggling networks.

Meth trafficking via maritime routes has surged across Asia, with record seizures reported in 2023. Police in India are now probing connections to both local and international criminal syndicates in this case.

Canada sues Google over alleged online advertising monopoly

Canada’s Competition Bureau has filed a lawsuit against Google, accusing the tech giant of abusing its dominant position in online advertising. The bureau seeks an order for Google to divest two ad tech tools and pay a penalty to ensure compliance with competition laws.

The investigation, launched in 2020, found that Google controls key aspects of the ad tech stack in Canada and allegedly employed tactics to entrench its market power. Google disputes the claims, arguing that the online ad market remains competitive.

The case mirrors global scrutiny of Google’s advertising practices, including a similar lawsuit in the United States and ongoing EU investigations. Google’s earlier offer to sell an ad exchange failed to satisfy European publishers.

Chinese industry groups urge ditching US chips, claiming they are ‘no longer safe’

Trade tensions between the USA and China are escalating in the semiconductor sector, as four of the top Chinese industry associations warned against purchasing US chips, claiming they are ‘no longer safe’ and they threaten national security principles. The response follows the latest US crackdown, restricting exports to 140 Chinese companies, including prominent chip equipment makers like Naura Technology Group.

The industry bodies’ warnings suggest that Chinese companies should turn to local suppliers, which could impact US giants such as Nvidia, AMD, and Intel, who have sold in China despite export restrictions.

However, the US semiconductor trade group dismissed these concerns, arguing that US chips remain safe and reliable. It called for more targeted export controls aimed at national security rather than broad, punitive measures.

Despite these assurances, the Chinese associations, which represent major industries from telecommunications to the digital economy, opted for a considerable change of course in the mindset of Chinese businesses. They are now advised to consider non-US suppliers to safeguard their operations and reduce reliance on US technology.

China has also imposed restrictions, notably a ban on exports of critical rare minerals used in military applications, solar cells, and fibre optic cables. The measure is seen as Beijing’s attempt to exert leverage and retaliate against the US actions, showing a more aggressive stance in this tech export war. Experts suggest that while the warnings from Chinese associations may be largely advisory, the new mineral export bans are a far more significant measure that could have a lasting impact on the global supply chain.

The recent crackdown and the retaliatory moves have also raised alarms in Washington, with the US National Security Council vowing to take necessary steps to deter further ‘coercive actions’ from China. The US is also working on diversifying its supply chains away from China, particularly in the semiconductor sector, where China’s growing self-reliance is seen as a challenge to American dominance.

Apple sued over worker monitoring claims

A new lawsuit accuses Apple of illegally surveilling employees’ personal devices and iCloud accounts while restricting discussions about pay and workplace conditions. Filed in California by Amar Bhakta, a digital advertising employee, the suit claims Apple mandates software installations on personal devices used for work, enabling access to private data such as emails, photos, and health information. The lawsuit also alleges Apple enforces confidentiality policies that hinder whistleblowing and discussions about working conditions.

Bhakta asserts he was instructed to avoid discussing his work on podcasts and remove job-related details from LinkedIn. The complaint argues these practices suppress employee rights, including whistleblowing and job market mobility. Apple denies the claims, stating they lack merit and emphasising its commitment to employee training on workplace rights.

This case joins other legal challenges faced by Apple, including allegations of underpaying female employees and discouraging discussions about workplace bias and pay disparity. Filed under a California law allowing workers to sue on behalf of the state, the lawsuit could lead to penalties, with a portion allocated to employees bringing the claims.

Interpol and South Korea lead operation, arresting over 5,500 cybercrime suspects

A coordinated global effort involving law enforcement from 40 countries has resulted in over 5,500 arrests and the seizure of more than $400 million in virtual and fiat currencies during Operation HAECHI V (July–November 2024).

The operation, led by INTERPOL and financially supported by South Korea, targeted seven major types of cyber-enabled fraud, including voice phishing, romance scams, investment fraud, and business email compromise schemes.

In one significant success, Korean and Chinese authorities dismantled a voice phishing network that defrauded over 1,900 victims of 1,511 billion KRW ($1.1 billion). The syndicate, which impersonated law enforcement and used fake IDs, saw 27 members arrested, with 19 facing formal charges.

INTERPOL issued a Purple Notice during the operation to warn member countries of a new cryptocurrency scam targeting stablecoin users. Known as the USDT Token Approval Scam, fraudsters lured victims with romance-based schemes, directing them to buy Tether stablecoins through legitimate platforms. Victims were then tricked into granting scammers full access to their cryptocurrency wallets through phishing links, allowing unauthorized fund transfers.

Operation HAECHI V also achieved record-breaking results, solving 8,309 cases—nearly double those from the previous year—and blocking 1,023 virtual asset service provider (VASP) accounts, a threefold increase from 2023.

HAECHI V participating countries, territories and regions: Albania, Argentina, Australia, Brunei, Cambodia, Canada, Cayman Islands (UK), China, France, Ghana, Hong Kong (China), India, Indonesia, Ireland, Japan, Korea, Kyrgyzstan, Laos, Liechtenstein, Macao (China), Malaysia, Maldives, Mauritius, Nigeria, Pakistan, Philippines, Poland, Portugal, Romania, Seychelles, Singapore, Slovenia, Spain, Sweden, Thailand, Timor Leste, United Arab Emirates, United Kingdom, United States, Viet Nam.