Celsius CEO Sentenced to 12 Years in Prison

Every week, Information Security Media Group summarizes cybersecurity incidents in digital assets. This report includes prison sentences for a former Celsius CEO, an Irish crypto launderer, and an ISIS financier, as well as a kidnapping attempt involving a crypto CEO’s family and the indictment of Sinaloa Cartel leaders in U.S. federal court.

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Former Celsius Network CEO Alexander Mashinsky has been sentenced to 12 years in federal prison after pleading guilty to commodities fraud and market manipulation. In December, he admitted to misleading investors about the safety and profitability of the Celsius platform while secretly liquidating millions in personal assets. His legal challenges began in 2023 amid a $4.7 billion settlement with the Federal Trade Commission, alongside lawsuits from both the Securities and Exchange Commission and the Commodity Futures Trading Commission, underscoring the significance of deceptive practices within the cryptocurrency sector.

German federal police have dismantled the eXch cryptocurrency exchange, citing allegations of facilitating money laundering linked to cybercrime. In a significant operation, authorities seized eight terabytes of data and digital assets estimated at $38 million, marking one of the largest cryptocurrency confiscations in the history of the Bundeskriminalamt (BKA). The exchange purportedly circumvented Know Your Customer (KYC) regulations, allowing the transfer of approximately $1.9 billion in cryptocurrency, with several of these funds traced to criminal origins as part of North Korean cyber operations. eXch has denied any wrongdoing but ceased its operations amidst ongoing investigations.

Once hailed as the largest illicit online marketplace globally, Haowang Guarantee has announced its shutdown following Telegram’s removal of its channels. The platform was infamous for facilitating sales of personal data and laundering services, reportedly processing over $27 billion in transactions, according to analysts. The U.S. Department of Treasury has identified its ties to extensive money laundering schemes, some emerging from transactions linked to North Korean cybercrime.

In Paris, police are investigating an attempted kidnapping involving the daughter of a cryptocurrency CEO, as reported by Le Parisien. Surveillance footage captured three masked individuals attempting to abduct the victims in broad daylight, thwarted by the woman’s husband, who intervened and forced the assailants to flee. This incident is part of a troubling trend in France, marked by a surge in “wrench attacks,” where perpetrators utilize physical threats to seize cryptocurrency assets, highlighting the tangible risks faced by individuals in the digital asset space.

Mohammed Azharuddin Chhipa, a 35-year-old individual, has been sentenced to more than 30 years in federal prison due to his involvement in conspiracy and providing material support to a terrorist organization. From 2019 to 2022, he raised over $185,000 through various means, converting these funds into cryptocurrency and delivering them to recipients linked with ISIS in Turkey. The funding was used to support terrorist operations, including logistics and personnel welfare, underscoring the intersection of terrorism financing and digital currencies.

Suleman Mazhar, aged 43, has received a two-year sentence in an Irish prison for multiple cybercrimes after a joint investigation by the Garda National Cybercrime Bureau and the FBI. He was found guilty of selling fraudulent bank accounts, credit cards, and sophisticated malware online, while also laundering cryptocurrency valued at €80,000 during his arrest. The assets have significantly appreciated since then, reflecting the volatile nature of cryptocurrency investments.

Leaders of the Sinaloa Cartel, Pedro Inzunza Noriega and his son, are facing serious charges in U.S. federal court related to extensive drug trafficking operations. They belong to a faction of the cartel historically led by Joaquin “El Chapo” Guzmán, who is serving a life sentence in the U.S. The indictment includes trafficking quantities of fentanyl and other illegal drugs; further investigations have connected them to cryptocurrency transactions amounting to millions. Analyzing these activities through the lens of the MITRE ATT&CK framework highlights potential adversary tactics such as initial access and money laundering techniques exploited in the illicit drug trade.