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<ul><li><keyword id="11783605" type="UNKNOWN" weightage="20" keywordseo="riccardo-spagni">Riccardo Spagni</keyword>, the former developer of the privacy-oriented cryptocurrency <keyword id="3626967" type="PERSON" weightage="20" keywordseo="Monero">Monero</keyword>, was arrested last month over accusations of fraud.</li><li>While Monero has attracted controversy for being the ‘vehicle of choice’ for cybercriminals, Spagni — or ‘<keyword id="11783604" type="UNKNOWN" weightage="20" keywordseo="fluffypony">fluffypony</keyword>’ — is behind bars on non-crypto related charges.</li><li>He has been accused of defrauding his former employer, Cape Cookies, of approximately $100,000 by generating false invoices.</li><li>Similarly, <keyword id="1450154" type="PERSON" weightage="20" keywordseo="John-McAfee">John McAfee</keyword> faced tax evasion charges, <keyword id="1889140" type="PERSON" weightage="20" keywordseo="Ross-Ulbricht">Ross Ulbricht</keyword> is convicted for operating The <keyword id="621419" type="COMPANY" weightage="20" keywordseo="Silk-Road">Silk Road</keyword>, and <keyword id="4513419" type="PERSON" weightage="20" keywordseo="arthur-hayes">Arthur Hayes</keyword> surrendered over charges of <keyword id="6355008" type="UNKNOWN" weightage="20" keywordseo="Money-laundering">money laundering</keyword>.</li></ul>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. <div type="twitter" handle="Spatzipantz" handlename="Saskia Spagni" image="http://pbs.twimg.com/profile_images/1051488624695496704/vwN-gYJ9_normal.jpg" favoritecount="94" retweetcount="28" status="Riccardo Spagni @fluffypony South African counsel legal statement:https://t.co/NvLA2aOMH8 https://t.co/VEXNx2JLf9" createdat="1627993275000" id="1422533018397384709"></div> 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-<a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">crypto</a> 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 <a href="https://www.coindesk.com/former-monero-maintainer-fluffypony-to-be-extradited-for-non-crypto-crimes">CoinDesk</a>, 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. <div type="image" title="The alleged $800,000 watch, which was first spotted on Spagni in 2018 at the Consensus cryptocurrency conference" msid="85007395" hostid="261" caption="&amp;lt;p&amp;gt;The alleged $800,000 watch, which was first spotted on Spagni in 2018 at the Consensus cryptocurrency conference&amp;lt;/p&amp;gt;"></div> <div type="twitter" handle="fluffypony" handlename="Riccardo Spagni" image="http://pbs.twimg.com/profile_images/1362339373849714688/66NRvjLg_normal.jpg" favoritecount="928" retweetcount="48" status="Consensus 2017: “fluffypony is the worst! He made a video with a fake announcement! I hate him!”Consensus 2018: “… https://t.co/QQmAEwf693" createdat="1526700634000" id="997680888786948096"></div> 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. <h2 style="line-height:1.38;margin-top:18pt;margin-bottom:6pt;"><cmsannotation type="cmsannotation" annotationid="The case has been haunting for almost a decade" comment="subhead" text="The case has been haunting for almost a decade">The case has been haunting for almost a decade</cmsannotation></h2>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 <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">Bitcoin</a> 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 <a href="https://twitter.com/Spatzipantz/status/1422304460278276096">Twitter</a>. <div type="twitter" handle="Spatzipantz" handlename="Saskia Spagni" image="http://pbs.twimg.com/profile_images/1051488624695496704/vwN-gYJ9_normal.jpg" favoritecount="490" retweetcount="89" status="1/2 Thank you everyone for your kind messages and in this matter. A message from @fluffypony: Unfortunately, due… https://t.co/qmZ816FYTk" createdat="1627938783000" id="1422304460278276096"></div> <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/indias-nft-space-is-growing-almost-as-fast-as-crypto/articleshow/84974126.cms">India’s NFT space is growing almost as fast as cryptocurrencies did</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/chinas-crackdown-on-cryptocurrency-trading-will-continue-as-the-central-bank-raises-the-heat-on-financial-institutions/articleshow/84970738.cms">China’s crackdown on cryptocurrency trading will continue as its central bank raises the heat on financial institutions</a>

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

<ul><li>Indian Minister Pankaj Chaudhary told the Parliament that when it comes to crypto scams and frauds, India’s existing laws like the <keyword id="75223" type="ORGANIZATION" weightage="20" keywordseo="Indian-Penal-Code">Indian Penal Code</keyword> are equipped to handle the fallout.</li><li>The Indian government is yet to form a policy addressing the use of cryptocurrencies in the country.</li><li>In the meantime, the popularity of digital coins has been increasing, along with scams and frauds promising investors ‘get rich quick’ schemes.</li></ul>The status of <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> may be uncertain in India but the Indian Penal Code (IPC) and other laws are equipped to handle scams and frauds, according to Uttar Pradesh’s Minister of Finance, Pankaj Chaudhary. In response to a query in the lower house of Parliament by Member of Parliament Shashi Tharoor, Chaudhary replied, “Depending on the nature of the fraud, various laws including the Indian Penal Code 1860, are in place of protection against fraud.” The number of scams and frauds related to Bitcoin and other cryptocurrencies have increased over the last couple of years in India, mostly due to the rising popularity of trading in digital money, which offers the allure of multiplying your money. <cmsannotation type="cmsannotation" annotationid="Rising crypto scams in India" comment="subhead" text="Rising crypto scams in India">Rising crypto scams in India</cmsannotation> According to <a href="https://www.ndtv.com/india-news/enforcement-directorate-arrests-cryptocurrency-trader-in-chinese-online-betting-scam-case-2337549">CoinTelegraph</a>, Indian investors lost almost $500 million to scams being operated in India and abroad. And, scammers are getting smarter than ever to acquire other people’s cryptocurrency. Last year, Naisar Kothari — a resident of Bhavnagar in the state of Gujarat — was arrested under the Prevention of Money Laundering Act (<a href="https://www.ndtv.com/india-news/enforcement-directorate-arrests-cryptocurrency-trader-in-chinese-online-betting-scam-case-2337549">PMLA</a>). According to the Enforcement Directorate (ED), Kothari helped companies buy cryptocurrencies, transfer the amounts into wallets on foreign exchanges. The money was then used to illegally run online betting apps on websites. Since online betting is illegal in the country, these websites were hosted from outside india — in some cases, the operators were Chinese nationals, as per the ED. "It was found that Kothari had knowingly and actively involved himself in layering the proceeds of crime and hence he was arrested...," said the statement. In another instance, three companies based out of Bengaluru are being investigated for launching a fake initial coin offering (ICO) for a token called <a href="https://coingeek.com/morris-coin-founder-arrested-in-india-over-alleged-digital-currency-scam/">Morris Coin</a>. According to the authorities, they duped 11 lakh people to invest ₹15,000 each in Morris Coin. Nishad, a 36-year old man who is the CEO of all three companies, was arrested by the Malappuram police in Kerala under the Prize Chits and Money Circulation Schemes (Banning) Act in September 2020. <cmsannotation type="cmsannotation" annotationid="The Indian government is in the dark about crypto activity in the country" comment="subhead" text="The Indian government is in the dark about crypto activity in the country">The Indian government is in the dark about crypto activity in the country</cmsannotation> Chaudhary also reiterated the stance of Indian Finance Minister, <a href="https://www.businessinsider.in/cryptocurrency/news/the-indian-government-has-no-data-on-how-many-crypto-exchanges-and-investors-working-on-cryptocurrency/articleshow/84821709.cms">Nirmala Sitharaman</a>, by telling the parliament that the authorities currently do not have any data on the status of crypto trading in India. <div type="ExtQuote" text="This information [status of cryptocurrency trading in India] is not collected by the government." auname="Response by Minister of State for the Ministry of Finance, Pankaj Chaudhary in Lok Sabha, India’s lower house of Parliament"></div> The country’s crypto bill, which was expected first during the Budget Session of Parliament in February and again during the ongoing Monsoon Session of Parliament, is still pending approval from the cabinet. According to IndiaTech.org CEO Rameesh Kailasam, the government may be softening its stance against cryptocurrencies in the country. “The government seems to be still in the process of determining the way forward, which may through either an existing committee or a new one with industry consultation where required,” he told Business Insider in an <a href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-bill-is-unlikely-to-be-up-for-discussion-this-month-and-it-may-be-a-while-before-we-see-it-in-parliament/articleshow/84401863.cms?utm_source=google_newsstand&amp;utm_medium=google_rssfeed&amp;utm_campaign=news_referral">earlier interview</a>. But for now, the regulators seem to be undecided. “The [Indian] government does not consider cryptocurrencies legal tender or coin, and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system,” said Chaudhary. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/cambodia-is-leading-the-race-to-launch-a-centralised-cryptocurrency/articleshow/85065661.cms">Cambodia doesn’t want to depend on the dollar anymore — and its centralised cryptocurrency already has 5.9 million users</a> <a href="https://www.businessinsider.in/cryptocurrency/news/google-is-allowing-crypto-ads-again/articleshow/85033865.cms">Google is bringing back crypto ads — but is leaving a lot of crypto companies out of the loop</a> <a href="https://www.businessinsider.in/cryptocurrency/news/crypto-billionaire-monero-developer-fluffypony-riccardo-spagni-arrested-for-cookie-fraud/articleshow/85007386.cms">Monero’s ‘Fluffypony’ joins Ross Ulbricht and Arthur Hayes behind bars — but for a non-crypto crime</a>

Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official

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

Shivam Vahia

Indian Penal Code and other laws have provision to protect investors against cryptocurrency fraud, according to Indian Finance Ministry official

Prabhjote Gill

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