The US Department of Justice has indicted the owner of the popular Instagram account under the nickname Jay Mazini of stealing $ 2.5 million worth of Bitcoin from subscribers.
Blogger Mazini gained popularity by giving away money during giveaways. And decided to take advantage of this for fraud. More than 1 million people have subscribed to his account. And Mazini openly admitted in his profile that he “raised” $ 33 million on gives.
Mazini’s fraud scheme
As a blogger with million followers, Mazini asked to send him BTC, which he offered to buy from users at a price that exceeded the market price by 3.5-5%. For example, Mazini “bought” BTC at $ 52,500 per coin, while the average cryptocurrency rate didn’t exceed $ 47,000. The attacker explained the non-standard offer by the fact that cryptocurrency exchanges limit the amount of Bitcoin he can buy.
However, the influencer was unable to back up the promises with real capital.
It is alleged that Mazini received Bitcoin from his followers. And then he sent them back fake receipts of payment. In fact, the victims either received an incomplete agreed amount, or were left without money at all.
According to a complaint filed with the Federal Court of Brooklyn, one of Jay Mazini’s followers sent him 50 BTC in the hope of receiving $ 2.56 million for them. In return, the “seller” sent him only $ 500,000.
This is not an isolated incident. Mazini carried out the alleged scams between January and the end of February, when the blogger processed followers on Twitter and Instagram. During this time, the price of Bitcoin skyrocketed from about $ 29,000 to over $ 49,000.
What punishment threatens Mazini?
Mazini is currently in New Jersey state custody and will face a New York court indefinitely. If found guilty, Mazini faces up to 20 years in prison.
At the moment, the FBI investigation into this case is still ongoing.
A similar case
Recall that in March entrepreneur John McAfee was charged with seven counts of fraud and money laundering.
He faces up to a hundred years in prison. McAfee was arrested in Spain in October 2020 and is awaiting extradition to the United States. McAfee himself considered the accusations of the US authorities “exaggerated”, and also compared them with “an attack on all cryptocurrencies”.
Beware of becoming a victim of crypto scams
Cryptocurrency is an area that has no regulation and control, which gives scammers the opportunity to deceive you. And since the price of Bitcoin has increased significantly over the past few years, the number of scammers has increased exponentially.
In a Justice Department posting, IRS-CI Special Agent Jonathan D. Larsen warned fans of social media influencers to “beware” of becoming a victim of crypto scams in social networks.
He noted that “the defendant allegedly used his online popularity to defraud those trying to exchange bitcoins for cash in excess of market value. Always be on the lookout and don’t fall prey to these cryptocurrency schemes”.