Wolf Capital’s co-founder Travis Ford also faced the wrath of the justice system, and pleaded guilty to a $9.4 million investor scam. Globally, Vietnamese authorities arrested four individuals for a crypto mining scam, and Kenya proposed a comprehensive regulatory framework for virtual assets to protect its investors. Meanwhile, Mango Markets announced that it will be shutting down after an SEC settlement over unregistered securities offerings.

Attorney General Acts to Recover Stolen Crypto

New York Attorney General Letitia James took legal action to recover more than $2 million in cryptocurrency that was stolen from victims who were lured into fraudulent schemes under the guise of remote work opportunities. Scammers targeted New Yorkers with deceptive text messages, offering flexible, well-paying jobs that ultimately resulted in financial losses.

The victims were tricked into creating crypto accounts, depositing funds, and reviewing products on counterfeit websites mimicking legitimate brands. They were instructed to maintain a crypto balance matching or exceeding the product costs and were assured that they were not actually buying the products. Instead, the money was allegedly used to “legitimize” the data for the reviews. They were also promised a return of their funds along with commissions, but the victims never received any compensation, and their money was stolen.

Example of the messages sent by the scammers (Source: Office of the New York State Attorney General)

With assistance from the US Secret Service, the Attorney General’s office froze the stolen cryptocurrency. Letitia James urged people to stay very vigilant against unsolicited messages offering work opportunities, and also called these scams “cruel and unacceptable,” especially because they prey on people who are trying to support their families.

This case happened after a warning was issued by the FBI in June of 2024 about an increase in work-from-home scams. The FBI pointed out tactics where scammers contacted victims via unsolicited messages, and offered simple tasks like rating restaurants or “optimizing” services. These schemes also involved fraudulent demands for cryptocurrency payments under the pretense of unlocking additional work, with the funds going directly to the scammers. 

Wolf Capital Founder Admits to Investor Scam

Travis Ford, the co-founder and head trader of the cryptocurrency investment firm Wolf Capital, pleaded guilty to conspiracy to commit wire fraud after deceiving investors with false promises of extraordinary returns. According to the United States Department of Justice (DOJ), Ford raised close to $9.4 million from around 2,800 investors between January and August of 2023 by claiming he could generate daily returns of 1-2%. This is equivalent to an annual return of about 547%.

By using social media, Wolf Capital’s website, and online promotions, Ford portrayed himself as a very sophisticated investor to lure victims into the scheme. Instead of using the funds as promised, Ford misappropriated the money for his own personal financial benefit and that of his co-conspirators. As a result, this caused major financial losses to investors. 

Ford admitted to the DOJ that the returns he promised were impossible to achieve consistently. He now faces a maximum sentence of five years, although a sentencing date still has to be determined.

As seen with the crypto work-from-home scam case as well as the Wolf Capital case, there has been a global crackdown on crypto-related fraud. On Jan. 5, Vietnamese police arrested four people that were involved in a crypto mining scam that defrauded more than 200 victims of 4 billion Vietnamese dong, or approximately $157,300. In the United States, police in Springfield, Massachusetts, also warned residents about a rise in crypto scams, particularly those involving Bitcoin ATMs, where victims are directed to transfer funds to scammers.

Blockchain security firm PeckShield reported that hackers and scammers stole over $3 billion through crypto-related activities in 2024, which was a 15% increase from the previous year. 

Mango Markets Shuts Down After SEC Settlement

Meanwhile, Solana-based decentralized exchange Mango Markets recently announced its closure, and urged its users to close their positions. The decision was made after governance proposals to end borrowing and lending, which are set to take effect on Jan. 13, after unanimous community approval. The shutdown also happened after a settlement with the US Securities and Exchange Commission (SEC) over allegations of unregistered securities offerings.

In September of 2024, the SEC charged Mango DAO and the Blockworks Foundation, and claimed the sale of $70 million worth of MNGO governance tokens violated federal securities laws. Mango Labs was also accused of operating as an unregistered broker. 

As part of the settlement, Mango agreed to pay $700,000 in civil penalties, destroy MNGO tokens, and petition exchanges to delist them. The Mango DAO previously voted to settle with the SEC for $223,228 and with the Commodity Futures Trading Commission (CFTC) for $500,000.

Mango Markets was launched in August of 2021 by Maximilian Schneider, Britt Cyr, and John Kramer, and its goal was to provide fast and cost-effective trading and lending services on the Solana blockchain. At its peak, the platform had $210 million in total value locked but this has since declined to $6 million, according to data from DefiLlama.

Mango Markets’ troubles date back to October 2022, when trader Avraham “Avi” Eisenberg exploited a vulnerability in its protocol to drain over $100 million. While Eisenberg returned $67 million after a community governance vote, he kept $40 million. US authorities arrested him in December of 2022 on charges of fraud and market manipulation. Eisenberg is still in custody, and faces a maximum sentence of 20 years in prison. His sentencing was recently postponed to April 2025 because of the complexity of the legal issues.

Kenya Plans New Crypto Regulations

In light of these recent shutdowns, Kenya is moving towards regulating crypto, signaling a shift from the more cautious stance that was previously taken by the Central Bank of Kenya (CBK). Treasury Cabinet Secretary John Mbadi announced it is very committed to establishing a legal and regulatory framework for virtual assets and service providers. This initiative is part of a new draft proposal that is titled “National Policy on Virtual Assets and Virtual Asset Service Providers.”

The goal of the draft is to create a fair, competitive, and stable market for cryptocurrencies in Kenya while addressing risks like money laundering, terrorism financing, and consumer protection. It proposes comprehensive legal standards and procedures to govern virtual asset activities and is open for public feedback until Jan. 24. If adopted, Kenya will join countries like South Africa and Nigeria in implementing crypto regulations.

Kenya’s approach to cryptocurrencies evolved a lot since the CBK’s 2015 warning about risks like fraud and lack of legal protections. Cryptocurrencies are not banned in Kenya, but the CBK has historically advised against their use. 

A turning point came in September of 2023 when the country completed a risk assessment on money laundering and terrorism financing involving virtual assets. The assessment recommended regulation to mitigate these risks and boost the country’s anti-money laundering framework.

(Source: Chainalysis)

Kenya stepped up as a major player in sub-Saharan Africa’s crypto adoption. According to Chainalysis, Kenya ranks 21st globally on the 2024 Crypto Adoption Index. Stablecoins account for almost half of the region’s transaction volume, driven by currency devaluation. Between July 2023 and July 2024, Kenya recorded $3.3 billion in stablecoin transactions, trailing regional leaders Nigeria with $21.8 billion, South Africa with $13.5 billion, and Ghana with $3.9 billion.