Monero’s ‘Fluffypony’ joins Ross Ulbricht and Arthur Hayes behind bars — but for a non-crypto crime

• Riccardo Spagni, the former developer of the privacy-oriented cryptocurrency Monero, was arrested last month over accusations of fraud.
• While Monero has attracted controversy for being the ‘vehicle of choice’ for cybercriminals, Spagni — or ‘fluffypony’ — is behind bars on non-crypto related charges.
• He has been accused of defrauding his former employer, Cape Cookies, of approximately $100,000 by generating false invoices.
• Similarly, John McAfee faced tax evasion charges, Ross Ulbricht is convicted for operating The Silk Road, and Arthur Hayes surrendered over charges of money laundering.

The former developer of privacy-oriented cryptocurrency Monero, Riccardo Spagni — also known online as ‘fluffypony’ was arrested last month in the US state of Tennessee. And, now he’s hoping to find his way back home to South Africa.


Spagni joins a list of popular entrepreneurs and technologists who made it large with the help of cryptocurrencies but soon stumbled upon legal hurdles. Anti-virus mogul John McAfee faced tax evasion charges, Ross Ulbricht was convicted for operating the illegal website Silk Road, and BitMEX co-founder Arthur Hayes surrendered over charges of money laundering.

However, Spagni’s arrest was not a result of one of Monero’s alleged illicit transactions coming to light but because of another non-crypto crime, Spagni committed a decade ago.

The South African citizen has been accused of committing fraud between 2009 and 2011 while he was working as an IT manager for Cape cookies, also headquartered in South Africa.

But, that doesn’t mean his history with cryptocurrencies doesn’t have a role to play. According to the warrant seen by CoinDesk, Spagni is currently being held under arrest without the option to post bail because of two primary reasons. One is the value of his watch, pegged at around $800,000. And, the second reason is Spagni’s cryptocurrency holdings.



According to the authorities, this makes him a flight risk. As of August 3, the Monero developer is currently in the US Attorney General’s custody in Tennessee, awaiting extradition to South Africa.

The case has been haunting for almost a decade

Court documents allege that Spagni committed invoice payment fraud while working as an IT manager for a South Africa-based cookie company, Cape Cookies, ten years ago.

His former employer claims that Spagni defrauded them off approximately $100,000 by generating false invoices from fictional entities. These transactions can also be traced back to his personal account.

Spagni was originally charged with fraud and related charges in a regional Cape Town court but failed to appear for further proceedings. South African law enforcement authorities tried to locate him at this registered residence but soon realised he had absconded to the US. An arrest warrant was issued in April.

The developer was reportedly destined for Mexico, but his trip was cut short by law enforcement in Tennessee during a refuelling stop on July 20.

Spagni is often referred to as 'fluffypony' in the crypto world due to his social media handle and the critical role he played in developing Monero. This cryptocurrency promises better privacy and protection in comparison to its competitors like Bitcoin and Ethereum.

Monero's current team hasn't issued a statement yet, despite Spagni being a famous face in the crypto community. This could possibly be because he hasn't been directly associated with the Monero project since 2019.

Although his wife, Sashka Spagni, provided a message on her husband's behalf via Twitter.


For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

SEE ALSO:
India’s NFT space is growing almost as fast as cryptocurrencies did
China’s crackdown on cryptocurrency trading will continue as its central bank raises the heat on financial institutions