prosecutors

Crypto.com customer accused of $7M spending spree granted bail

The judge said that imprisonment wasn’t necessary because Jatinder Singh couldn’t flee Australia without his Indian passport.

The Crypto.com customer who was accidentally sent $6.95 million from the exchange in 2021 and then allegedly went on a spending spree has been granted bail in Australia despite $2 million funds still unaccounted for.

In the Victorian County Court, prosecutors on March 20 tried to convince the judge that imprisonment would be the only way to ensure that Jatinder Singh would not flee the country.

The blunder by Crypto.com came about when a Bulgarian-based employee accidentally transferred $6.95 million to his account instead of what was meant to be a $100 refund in May 2021. The Melbourne man is alleged to have bought four houses and a car with the funds, along with sending a portion overseas.

Prosecutors argued that Singh is financially motivated to flee the country because only $4.9 million has been recovered, according to a report from the Herald Sun.

*The theft charges of Singh and Manivel are being dealt with by the Victorian County Court. Source: Country Court of Victoria*

Of the missing $2 million, over $1.45 million is believed to have been shifted offshore to Malaysia, the court heard.

Senior Constable Conor Healy told the judge that Singh “may have access to the outstanding money that has not been recovered yet,” while prosecutor Peter Botros argued that Singh posed an “unacceptable” flight risk because he was living without a visa, had no family in Australia and was unemployed prior to his arrest.

However, Judge Daniel Holding didn’t think this was enough to put Singh behind bars. He instead explained that confiscating Singh’s Indian passport and preventing him from applying for a new one at the Indian Embassy would be sufficient:

“If there is a condition that he not have a passport or he not apply for a passport … how does he manage to flee the country?”

Singh is facing a series of theft charges alongside his partner, Thevamanogari Manivel, who is the owner of the bank account to which the funds were transferred.

Both pleaded not guilty to the charges. They continue to claim that they rightfully won the $7 million through a Crypto.com contest.

While the incident occured in May 2021, it was not discovered until an annual audit in December 2021.

The Singaporean-based cryptocurrency exchange has since launched civil action in the Victorian Supreme Court to recover the losses.

The Victoria Supreme Court h ruled that the funds must be returned to the company.

Prosecutors argue ‘insider trading’ claim in the OpenSea case is accurate

Federal prosecutors have argued against a claim made by the former OpenSea product manager that the term “insider trading” is “inflammatory.”

United States prosecutors have opposed a motion by a former employee of nonfungible token (NFT) marketplace OpenSea to remove “insider trading” references from his charges.

Prosecutors said the phrase accurately describes the crimes the former OpenSea product manager Nathaniel Chastain is accused of in a memo filed on Oct. 14. It was responding to a motion by Chastain to stop referring to the phrase on Oct. 3, according to Law360.

Chastain was charged in June for allegedly buying 45 NFTs from June to September 2021 through anonymous wallets and selling them for a profit. He allegedly used his position at OpenSea to either choose or know which collections were featured on the homepage, which often saw their values increase.

Chastain argued the use of “insider trading” to describe his alleged actions is “inflammatory” and doesn’t have anything to do with the accusations he faces, adding a jury may be influenced by the term if his case is brought to trial.

He also added that “insider trading” only applies to securities and not to NFTs, a claim similarly made in August by his legal team, and the phrase was used to spark attention in the media to skew the jury’s view of him.

Prosecutors fired back, stating the phrase “accurately captures” the accusations made against him and the term isn’t “so inherently inflammatory” to warrant the “extreme measure” of having the term removed from his charges.

They also rebuked his claim of insider trading only applying to securities calling it a “legal error” and an “unduly cramped understanding of the phrase,” claiming it can be used to reference multiple types of fraud in which someone with non-public knowledge uses it to trade assets.

The term “insider trading” had previously not been used in reference to cryptocurrencies or NFTs before Chastain’s charges.

In June, shortly after Chastain was charged, former U.S. Securities and Exchange Commission (SEC) lawyer Alma Angotti said the case might see NFTs labeled as securities as they could be considered one under the Howey test.

The Howey test is used to determine if a transaction is an “investment contract” which exists when there is the “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others,” according to the SEC.