Hydra

Celsius

Life

Bitcoin

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 Some of Moiseev’s accomplices received sentences of up to 23 years. Meanwhile, other well known crypto figures are also facing legal challenges. Roger Ver is battling U.S. tax evasion charges that could result in a 30-year sentence, while ex-Celsius CEO Alex Mashinsky pleaded guilty to fraud and price manipulation. Coinbase CEO Brian Armstrong also recently urged the crypto industry to reject law firms hiring anti-crypto officials in resistance against regulatory hostility.
 <h2 id="hydra-founder-and-accomplices-sentenced">Hydra Founder and Accomplices Sentenced</h2>
 Stanislav Moiseev, the founder of the infamous online black market and crypto mixing service Hydra, has been <a href="https://epp.genproc.gov.ru/web/proc_50/mass-media/news?item=99442998" target="_self">sentenced</a> to life imprisonment by a Russian court. The Moscow Regional Court found Moiseev and 15 of his accomplices guilty of organizing a criminal community and the illegal production and sale of psychotropic substances and drugs.&nbsp;
 The court's decision was announced on Dec. 2 by the Moscow Prosecutor’s Office, and also included sentences for his accomplices ranging from 8 to 23 years in prison. Moiseev was fined $38,100 as well, or 4 million rubles, while his co-defendants were ordered to pay a collective $152,400. As part of the sentencing, properties and vehicles linked to the convicted people were confiscated. According to the Russian <a href="https://tass.ru/proisshestviya/22552935" target="_self">media outlet TASS</a>, the sentences will be served in correctional colonies under very strict regimes.&nbsp;
 Hydra operated from 2015 until its shutdown in 2022, and was the largest darknet marketplace globally. In fact, it was responsible for 80% of all darknet-related crypto transactions in 2021. Over its operational years, Hydra facilitated the exchange of more than $5.2 billion in crypto, according to the United States Department of Justice. The platform was especially known for its sale of illegal items, including stolen credit card information, counterfeit currencies, and fraudulent identity documents.
 Hydra's operations became increasingly sophisticated over the years, and its cryptocurrency volumes on exchanges grew by 624% between 2018 and 2020, according to a 2021 <a href="https://flashpoint.io/blog/chainalysis-hydra-cryptocurrency-research/" target="_self">report</a> from Flashpoint and TRM Labs.&nbsp;
 Hydra crypto volumes between 2016 and 2020 (Source: <a href="https://flashpoint.io/blog/chainalysis-hydra-cryptocurrency-research/" target="_self">Flashpoint</a>)
 The <a href="https://www.justice.gov/opa/pr/justice-department-investigation-leads-shutdown-largest-online-darknet-marketplace" target="_self">marketplace's downfall</a> came in April of 2022, when German authorities dismantled its infrastructure and seized its Bitcoin servers based in the country. German law enforcement also reported that Hydra had 17 million customers and 19,000 vendor accounts at the time of its shutdown. Additionally, authorities confiscated&nbsp;almost a ton of narcotic and psychotropic substances.
 Hydra has been under investigation by Russia's Ministry of Internal Affairs since 2016. The other people sentenced in the case included Alexander Chirkov, Andrei Trunov, Evgeny Andreev, Ivan Koryakin, Vadim Krasninsky, Georgy Kierobiani, Artur Kolesnikov, Nikolai Bilyk, Alekandr Kabalina, Mikhail Dombrovkogo, Alexander Aminova, and Sergey Czech. The convictions and sentences are subject to appeal.&nbsp;
 Unfortunately, darknet marketplaces still thrive, and their revenues reached at least $1.7 billion in 2023, according to <a href="https://go.chainalysis.com/crypto-crime-2024.html" target="_self">Chainalysis</a>.
 <h2 id="roger-ver-battles-federal-tax-evasion-charges">Roger Ver Battles Federal Tax Evasion Charges</h2>
 Other people involved in the crypto space are also butting heads with the law. <a href="https://x.com/rogerkver" target="_self">Roger Ver</a>, who is widely known as ”Bitcoin Jesus,”&nbsp;filed a motion in a California federal court to dismiss allegations of tax evasion brought against him by United States prosecutors.&nbsp;
 Ver argues that the Internal Revenue Service’s (IRS) “exit tax,” which applies to U.S. citizens with more than $2 million in assets renouncing their citizenship, is unconstitutional. In his Dec. 3 <a href="https://www.courtlistener.com/docket/68486373/21/united-states-v-ver/" target="_self">filing</a>, Ver claimed the tax violates the Constitution's Apportionment and Due Process Clauses and described the relevant tax provisions as ”inscrutably vague” regarding digital assets.
 The exit tax is designed to make sure that citizens fulfill their tax obligations before renouncing citizenship. However, Ver believes that prosecutors ignored key evidence, including documents proving he did not intend to file a fraudulent tax return, and that one of his lawyers was unlawfully interrogated.&nbsp;
 The case stems from allegations that were made by the U.S. Attorney’s Office in Los Angeles, which accused Ver of evading more than $48 million in taxes by failing to report capital gains from selling tens of thousands of Bitcoin for $240 million in cash. Ver was later arrested in Spain on April 30.
 Ver claimed the exit tax process was slowed down by practical challenges, including the lack of liquid Bitcoin markets at the time. Nonetheless, the U.S. government holds firm that Ver filed a fraudulent tax return after renouncing his U.S. citizenship in favor of Japanese citizenship in 2014. Ver faces <a href="https://www.justice.gov/opa/pr/early-bitcoin-investor-charged-tax-fraud" target="_self">charges</a> of tax evasion, mail fraud, and filing false tax returns, which collectively carry a maximum sentence of up to 30 years in federal prison if he is convicted.
 Ver has been an advocate for Bitcoin since 2011, and gained a lot of recognition for promoting the cryptocurrency when it was still valued under $1. He later became a leading proponent of Bitcoin Cash after the 2017 Bitcoin network hard fork.&nbsp;
 However, Ver’s reputation has been marred by controversy, including a 2022 <a href="https://x.com/MarkDavidLamb/status/1541831697787928576" target="_self">dispute</a> with CoinFlex. The company claimed he owed the platform $47 million in USD Coin. Ver also served 10 months in federal prison in 2002 and 2003 for selling explosives on eBay.&nbsp;
 <h2 id="ex-celsius-ceo-pleads-guilty">Ex-Celsius CEO Pleads Guilty</h2>
 Alex Mashinsky, the former CEO of Celsius Network, reached a plea agreement with United States prosecutors. Mashinsky pleaded guilty to commodities fraud and a scheme to manipulate the price of the CEL token. This happened after a failed bid by Mashinsky's legal team to have the charges dismissed.
 During a conference in the United States District Court for the Southern District of New York on Dec. 3, Mashinsky <a href="https://x.com/innercitypress/status/1864049689114354123" target="_self">acknowledged his actions</a>, including making false statements about Celsius' Earn Program, which misled investors and resulted in him profiting approximately $42 million.
 Mashinsky also admitted to falsely claiming that Celsius had regulatory approval and to misleading statements about not selling his CEL tokens. After accepting full responsibility for these actions, he entered a plea agreement that reduced his <a href="https://www.justice.gov/usao-sdny/pr/celsius-founder-and-former-chief-revenue-officer-charged-connection-multibillion" target="_self">charges</a> from seven to two years. Each charge carries a maximum sentence of 15 years, which could potentially amount to 30 years if served consecutively. His sentencing is scheduled for April 8.
 The plea deal was made after Judge John Koeltl rejected arguments from Mashinsky’s legal team, and ruled that their motions to dismiss were either moot or lacked merit. Before the plea agreement, Mashinsky maintained his innocence and was released on a $40-million bond. His trial was initially set for January of 2025.
 Mashinsky’s case makes him one of many high-profile crypto executives facing potential prison time, including former FTX CEO Sam Bankman-Fried, who received a 25-year sentence, and Binance’s ex-CEO Changpeng Zhao. CZ pleaded guilty and served four months. Mashinsky stepped down as Celsius CEO in September of 2022 due to increasing scrutiny of the platform's operations.
 Roni Cohen-Pavon, Celsius’ former chief revenue officer, also pleaded guilty to charges related to CEL price manipulation in September of 2023 and is set to be sentenced on Dec. 11.&nbsp;
 <h2 id="coinbase-urges-crypto-industry-to-reject-anti-crypto-officials">Coinbase Urges Crypto Industry to Reject Anti-Crypto Officials</h2>
 Coinbase CEO Brian Armstrong <a href="https://x.com/brian_armstrong/status/1863774342267781222" target="_self">announced</a> that the crypto exchange will no longer work with law firms that employ people who were involved in what he described as anti-crypto actions during their government service. In a post on Dec. 3, Armstrong criticized lawmakers' efforts to undermine the crypto industry without providing any clear regulations and called on the broader crypto community to avoid supporting these individuals.&nbsp;
 He believes there is a need to hold law firms accountable, and encouraged people to recognize that hiring former officials with anti-crypto agendas could lead to losing business from industry players.
 Armstrong specifically mentioned Coinbase's decision to sever ties with the law firm Milbank after it <a href="https://www.milbank.com/en/news/sec-division-of-enforcement-director-gurbir-s-grewal-joins-milbanks-litigation-and-arbitration-group.html" target="_self">hired Gurbir Grewal</a>, who was the former enforcement director of the U.S. SEC. Grewal resigned from the SEC in October, and was&nbsp;involved in recommending more than 100 enforcement actions that targeted noncompliance in the digital asset industry.&nbsp;
 Milbank welcomed Grewal to its litigation and arbitration group, and its chairman praised his career achievements. However, Armstrong argued that Grewal’s tenure at the SEC was far from ordinary and that senior officials cannot claim to have been merely following orders during their time at the agency.
 The announcement was made amidst growing optimism in the crypto community after Donald Trump’s 2024 U.S. presidential election victory. Many people now believe this could lead to a more favorable regulatory environment.&nbsp;
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Hydra Founder Stanislav Moiseev Sentenced to Life in Prison

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