Crypto’s Cell Block: Executives Behind Bars 2024

• 2023 and 2024 saw the highest number of crypto convictions.
• There has been a 300% increase in crypto conviction between 2014 and 2024.
• Money laundering and fraud account for most of the longest sentences in crypto crimes.

It’s spooky season, a time that reminds us of the horrors that lurk around every corner.

So let this tale serve as a warning to all daring to harness the powers of crypto for their own evil schemes, and let’s look at some of the villains who thought they could get away with it and will be spending this Halloween in the slammer.

Sam Bankman Fried

Perhaps the most famous case in crypto is that of Sam Bankman-Fried (SBF), the founder of FTX, who was convicted and sentenced in 2024 to 25 years in jail for spectacularly massive fraud, conspiracy, and financial mismanagement.

Billions upon billions of dollars were lost.

In 2022, it brought the entire crypto market and industry to its knees, toppling several other companies in its wake.

The collapse of FTX at the hands of “good guy” SBF fuelled even greater regulatory scrutiny and skepticism towards crypto and crypto exchanges.

SBF will spend this Halloween sharing a “dorm-style” cell with Sean “P Diddy” Coombes. Though however hellish that may be, it’s nothing compared to the 100-year sentence prosecutors were originally pushing for.

The whole debacle has seen other FTX employees and advisors jailed, including exec Ryan Salame, who was sentenced to seven and a half years in jail back in May 2024.

Caroline Ellison

Caroline Ellison was the CEO of FTX’s sister firm, Alameda Research. She played a significant role in misleading lenders and gambling with stolen customer funds at the request of SBF for FTX.

She received two years in prison and was ordered to pay $11 billion.

The lenient sentencing, especially compared to that of SBF, was thanks to her “extraordinary cooperation” with investigators and the government.

She was instrumental in bringing down several other FTX executives, essentially opening the whole case.

If you’re looking for a true fright this Halloween, consider that Ellison wrote a steamy period romance novel whilst awaiting her up-to-110-year prison sentence.

Alexey Pertsev

Perhaps the most controversial sentencing is that of Tornado Cash developer Alexey Pertsev. Dutch courts found him guilty of laundering $1.2 billion and sentenced him to 64 months in jail.

Pertsev, a Russian national who resided in the Netherlands, helped create the privacy-preserving cryptocurrency mixer, which Dutch courts concluded was by “its nature” functioning as a “tool intended for criminals.”

What makes the case so contentious is that Tornado Cash represented a gray area between privacy-preserving code facilitated by automated smart contracts and anti-money laundering laws.

The idea is that he is personally responsible for failing to implement measures to prevent bad actors, such as North Korean hacking groups, from accessing and using the platform.

Pertsev’s lawyers argue that because the smart contract code is open source, its creators can have no control over how it is used.

Therefore, it’s unreasonable to blame Pertsev for the actions of anonymous independent actors. Fellow developers Roman Storm and Roman Semenov are awaiting trial in the U.S.

Karl Sebastian Greenwood

OneCoin was one of the biggest Ponzi schemes in crypto history after pulling off a $4 billion fraud.

For his role as co-founder and playing a central role in orchestrating the fraud, Greenwood was sentenced to 20 years in 2023.

The mastermind behind OneCoin, “Cryptoqueen” Ruja Ignatova, remains at large after vanishing following an airplane trip from Sofia to Athens, Greece.

Now on the FBI’s top ten most wanted, a $5 million bounty has been placed for information that leads to her arrest.

Honourable Mentions

Though not “in jail,” certain individuals are still bound by law to remain in their respective jurisdictions.

Firstly, there’s Telegram founder Pavel Durov, who was immediately arrested and detained upon taking a trip to France in August 2024 with 12 charges levied against him.

This includes failure to stop drug trafficking and child pornography on the app.

Pavel spent four days in detainment and was then placed under judicial supervision with a $5 million deposit. For now, he is required to check in to a French police station twice a week and isn’t allowed to leave France.

Terraform Labs co-founder Do Kwon was also arrested in 2023 in Montenegro after evading authorities following the 2020 $40 billion collapse of Terra and its stablecoin.

As South Korea awaits his extradition, Montenegro courts have Kwon out on bail while they consider whether the extradition ruling was legal.