Cryptocurrency personality Thomas John Sfraga has pleaded guilty to wire fraud charges after allegedly deceiving over a dozen victims with fraudulent investment schemes, including fake cryptocurrency ventures. The U.S. Department of Justice (DOJ) announced Sfraga’s guilty plea on May 17, detailing his deceptive activities in the crypto industry.
Promises of Unrealistic Gains
According to the DOJ, Sfraga convinced a victim to invest in a fictitious cryptocurrency “virtual wallet,” promising returns as high as 60% within three months. Sfraga, known for his involvement in podcasting and as an emcee at crypto events in New York, used his industry reputation to gain the trust of his victims. The DOJ explained that Sfraga’s scheme operated as a Ponzi scheme, where returns paid to earlier investors came from the investments of new participants, not from legitimate profits.
Betrayal of Trust
Sfraga allegedly diverted the invested funds for personal use, to cover expenses, and to pay off earlier investors and business associates. Many of his victims were friends and neighbors, whom he deceived to swindle over $1.3 million from their hard-earned savings.
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While gains like those Sfraga promised are not unheard of in the volatile crypto market, they are rare. For example, Bitcoin rose 65% over three months from January 24 to April 24 this year, according to CoinMarketCap. At the time of publication, Bitcoin is trading at $66,860, reflecting an 8.92% increase over the past 30 days. Several altcoins, such as PEPE and dogwifhat (WIF), have seen even larger returns, with increases of 722% and 656% respectively over the same period.
Broader Crackdown on Crypto Fraud
Sfraga’s case is part of a broader crackdown on cryptocurrency fraud. Recently, the DOJ charged brothers Anton Peraire-Bueno and James Pepaire-Bueno with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They allegedly acquired $25 million in cryptocurrency within 12 seconds using a scheme that compromised blockchain integrity.
Additionally, in April, the former head of legal and compliance for the OneCoin fraud scheme received a four-year jail sentence after admitting to laundering millions of dollars.
