U.S. prosecutors are looking to give back $6.5 million in purportedly swindled cryptocurrency to “Banana.Fund” crowdfunding effort victims, CoinDesk reported.
The suit aims to provide official ownership to the U.S. government so it can give the assets back to the victims. It was filed in late July in the U.S. District Court for the District of Columbia.
Prosecutors claim that the project’s administrator, who is not identified, told investors that the effort did not work out, pledged to give $1.7 million back and didn’t follow through, CoinDesk reported, citing the forfeiture complaint. The operator then purportedly moved to a laundering and reimbursement scam that led to the U.S. Secret Service confiscating 1,721,868 tether and 482 bitcoin.
The white paper of Banana.Fund discussed a business development firm that helped burgeoning upstarts across the beginning phases and provided those who put up the early investments with transparency. Buy-in for the investment began at 0.02 bitcoin, according to a Telegram user cited in the report. One investor reportedly put in 82 bitcoin, while nine additional parties reportedly invested at least 10 bitcoin. More than 400 investors purport to have lost an overall 481 bitcoin, per the report.
An attorney representing the individual said his client had 300 bitcoin in his possession, the outlet reported, citing the Tampa Bay Times. That amount of bitcoin is worth more than $3.6 million as of Monday (Aug. 3) at 7:13 p.m. Eastern Time at market price, according to CoinDesk.
Authorities view the individual as the central figure and leader of the “CryptoForHealth” Twitter incident, which was a hack on approximately 30 well-known accounts that purported to increase the funds of users who transferred digital currency by two times. Roughly $117,000 in digital currency was sent to the hackers in a single afternoon. The individual’s bail was set for $725,000 at the individual’s inaugural court appearance.