FTX Founder Sam Bankman-Fried (SBF) was sent to jail Friday after the judge overseeing his case revoked his bail. US District Judge Lewis Kaplan found probable cause that the disgraced former CEO repeatedly tampered with witnesses. In addition, Kaplan rejected Bankman-Fried’s attorneys’ request to delay his detention pending appeal.

Prosecutors argued that Bankman-Fried tried to harass a crucial witness last month when he showed a New York Times reporter the personal writings of his former partner Caroline Ellison, a cooperating witness who pleaded guilty in December to criminal charges related to defrauding FTX investors. The prosecution said SBF’s actions were an attempt to damage her reputation and influence prospective jurors. Meanwhile, SBF’s defense team accused prosecutors of using evidence laden with “innuendo, speculation, and scant facts.” Judge Kaplan sided with prosecutors, saying Bankman-Fried attempted to “tamper with witnesses at least twice.”

Reutersreports that the 31-year-old former FTX boss was ushered out of the court by US Marshals “after removing his shoelaces, jacket and tie and emptying his pockets.” The former CEO had been under house arrest in California (at his parents’ home in Palo Alto) since he was extradited in December following his arrest in the Bahamas last December. His $250 million bail package tightly controlled his internet usage.

Ilya Lichtenstein and Heather Morgan, the couple who were arrested last year for the massive 2016 Bitfinex hack involving billions of dollars of cryptocurrency, have pleaded guilty in court. Lichtenstein has admitted that he used multiple advanced hacking tools and techniques to gain entry into the cryptocurrency exchange's network. He then authorized 2,000 transactions to move 119,754 bitcoins to wallets he controlled. To cover his tracks, he said he deleted access credentials, logs and other digital breadcrumbs that could give him away. Morgan, his wife, helped him move and launder the stolen funds. 

If you'll recall, the Justice Department seized 95,000 of the stolen bitcoins at the time of their arrest. Back then, that digital coin hoard was worth a whopping $3.6 billion and was the largest financial seizure in the agency's history. Authorities were able to trace more of the stolen funds after that to recover an additional $475 million worth of cryptocurrency.

According to the DOJ, Lichtenstein and Morgan used false identities to set up online accounts on darknet markets and cryptocurrency exchanges. They then withdrew the funds and distributed the bitcoins from there by converting them into other forms of cryptocurrency and keeping them in crypto mixing services. By doing so, they obfuscated the coins' sources and made them harder to trace. The couple also set up businesses in the US to make their banking activities look legitimate — Morgan had a TikTok where she talked about establishing a "multimillion dollar business" with "zero outside funding" — and they apparently used the stolen money to purchase physical gold coins that Morgan then buried. 

To be precise, Lichtenstein pleaded guilty to conspiracy to commit money laundering and could spend up to 20 years in prison. Meanwhile, Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States. Each one carries a maximum prison sentence of five years. 

Kevin Mitnick, who was once one of the world's most wanted computer hackers, has passed away at 59 on July 16th. According to his obituary, Mitnick battled pancreatic cancer for more than a year and was undergoing treatment at the University of Pittsburgh Medical Center. "[M]uch of his life reads like a fiction story," his obituary reads, and that's perhaps the perfect way to describe his tale. The first time Mitnick infiltrated a computer system was way back in 1979, but it wasn't until 1988 that he was convicted and sentenced to 12 months in prison for copying a company's software.

He broke into Pacific Bell's voicemail computers when he was under supervised release and then continued to hack into cell networks, as well as company and government websites, as a fugitive in the 90s. Mitnick was also involved in the theft of thousands of files and credit card numbers, but his obituary says he "never took one dime from any of his 'victims.'" He was eventually caught in 1995 and charged with illegal use of a telephone access device and computer fraud. Apparently, authorities believed he had access to corporate trade secrets worth millions of dollars at the time.

Mitnick spent five years in prison, which he described as a "vacation" by the time he was freed. From there, he changed the course of his career and chose to become a White Hat hacker and cybersecurity consultant. In 2011, he became part owner and chief hacking officer of KnowBe4, which provides security awareness training and a simulated phishing platform to clients. Before all these happened, Mitnick figured out how to game LA's public transportation system at 12 years old by memorizing bus schedules and punch cards and then obtaining his own punch tool systems so he could ride buses all day. Mitnick is survived by his wife, Kimberley Mitnick, and their unborn child.

The problems keep mounting for Celsius founder Alex Mashinsky, as he’s been arrested and charged by federal authorities with fraud. Mashinsky faces seven criminal counts, including securities, commodities and wire fraud, as originally reported by CBS News. He and his company are being independent sued by three government agencies — the FTC, CFTC and SEC. The U.S. Attorney’s Office alleges that Mashinsky misled customers regarding the nature of his company, making it seem like a bank when it was actually a high-risk investment fund.

Celsius’s former chief revenue officer, Roni Cohen-Pavon, was also arrested, with both Pavon and Mashinsky being charged with manipulating the price of the company’s proprietary crypto token so they could sell their own stock at inflated prices. 

“Mashinsky misrepresented, among other things, the safety of Celsius’s yield-generating activities, Celsius’s profitability, the long-term sustainability of Celsius’ high rewards rates and the risks associated with depositing crypto assets with Celsius,'' federal prosecutors wrote in a charging document obtained by CNBC.

Additionally, the FTC reached a $4.7 billion settlement today with Celsius, which nearly matches the record fines levied against Meta in 2019 for violating the privacy of consumers. The company has agreed to these financial terms, but will only make payments once it returns what remains in customer assets as part of ongoing bankruptcy proceedings.

This all follows a New York-based lawsuit issued in January that also alleged massive fraud. That suit seeks appropriate damages after Celsius allegedly defrauded investors out of "billions of dollars" in cryptocurrency.

While details are scant on today’s arrest, the New York suit alleges that Mashinsky misled customers about the company’s worsening financial health and failed to register as a commodities and securities dealer, among many other allegations. New York State Attorney General Letitia James alleged that Mashinsky deceived hundreds of thousands of investors, with over 26,000 of them located in New York.

If convicted on all counts, Mashinsky and Pavon face decades in prison. Mashinsky resigned as CEO of Celsius last year and is no longer involved with the company.

Elizabeth Holmes may be getting out of prison around two years earlier than expected. According to her profile on the Federal Bureau of Prisons website, Holmes' release date is now scheduled for December 29th, 2032. That means the time she'll serve is almost two years shorter than her original sentence, which was supposed to last for 11 years and three months. The agency has confirmed her shortened (nine years and seven months) sentence to The Guardian but didn't comment further, citing the privacy and safety of inmates. 

Holmes was indicted on charges of fraud back in 2018, a few years after a series of reports from the Wall Street Journal exposed that Theranos' proprietary "fingerprick" blood-testing technology was faulty. The publication had also reported that the company was aware of its issues but sent inaccurate test results to patients anyway. In 2022, Holmes was found guilty of defrauding investors and was sentenced to 135 months in prison, as well as three years of supervised release. 

The former Theranos chief, who had been out on bail from the time she was indicted, tried to convince the court to allow her to stay out of prison while she was appealing her case. She failed in her bid to stay out of prison, though, and reported to a minimum-security, all-female facility in Texas on May 30th. It's unclear why her sentence was quietly reduced, but factors like good conduct, the completion of assignments and rehabilitation programs, as well as the credits inmates receive for various activities could result in a shorter sentence. Based on the prison bureau's website, Ramesh "Sunny" Balwani, who was Theranos' former president, will also be released two years earlier than expected in April 2034. 

As for Holmes, she was ordered to pay $452 million in restitution to the fraud victims in addition to serving time in prison and going through supervised release. As Gizmodo notes, Holmes had an estimated net worth of $4.5 billion before Theranos' downfall. Forbes had lowered her estimated net worth to nothing a year later, and her lawyers argued that she could not afford to add $250 per month to her restitution schedule after she gets out. 

A disgruntled Tom Clancy’s Rainbow Six Seige gamer who called in a fake emergency to Ubisoft’s Montreal office was sentenced this week to three years of community service, according to The Montreal Gazette. Yanni Ouahioune, 22, was handed the sentence on Monday in Paris following his call to authorities about a fake hostage situation in November 2020.

Police say Ouahioune called in the hoax because he was angry he had been banned several times from Tom Clancy’s Rainbow Six Siege. In response to the bogus call, a heavily armed squad of police officers surrounded the building. The officers secured the headquarters — and closed several nearby streets — before confirming there wasn’t an active threat. Ouahioune allegedly called from his parents’ house using Russian servers to mask his identity (unsuccessfully). After being charged, La Pressereported (viaPolygon) that Ouahioune pleaded for Ubisoft to unban his account. “Can you say that I am kindly asking the Ubisoft team to ‘unban’ my account please,” Ouahioune said. “I have put over $1,500 in cosmetic enhancements in my profile.”

The sentencing also includes Ouahioune’s alleged part in a DDoS attack against a French government office and making threats against Minecraft developers. The convicted hoaxer will reportedly be required to “compensate victims, undergo treatment for a mental health problem and either work or undergo training” in addition to the community service.

Magali Valence, Ubisoft director of external communication for Ubisoft Montreal, told The Montreal Gazette in an email that it acknowledges the court’s decision. “In this trial we were committed to representing the interests of our employees who were affected by this false hostage-taking alert at our Montreal studio. It was important for us to denounce this violent and unacceptable incident. Out of respect for our employees who were affected by this event, we will not comment further.”

Yuji Naka likely won't face prison time over his insider trading. Tokyo judge Madoka Hiruta has given the Sonic the Hedgehog co-creator a suspended 2.5-year prison sentence, deferred for four years, as well as two fines worth the equivalent of $1.1 million and $14,000. Naka's actions hurt the "fairness and soundness" of the stock market while wounding investors' trust, Hirtua says.

Naka pleaded guilty in March to violating Japan's Financial Instruments and Exchange Act. While working at Square Enix, he bought shares in the game studio Aiming before its partnership with on Dragon Quest Tact became public knowledge. He made about $150,000 in profit after selling his shares. The developer also faced insider trading charges for buying shares in Ateam, the developer of the short-lived mobile battle royale game Final Fantasy VII: The First Soldier.

Two other former workers, Taisuke Sasaki and Fumiaki Suzuki, were also arrested for buying Aiming shares. Square Enix previously said it was cooperating with investigators and had instituted safeguards to prevent insider trading.

This kind of activity isn't new in the technology space. It's rare in the gaming world, however. and surprising when it involves a successful developer like Naka. While this won't necessarily hurt the Sonic franchise, it certainly doesn't help his reputation.

French law enforcement may soon have far-reaching authority to snoop on alleged criminals. Lawmakers in France's National Assembly have passed a bill that lets police surveil suspects by remotely activating cameras, microphones and GPS location systems on phones and other devices. A judge will have to approve use of the powers, and the recently amended bill forbids use against journalists, lawyers and other "sensitive professions," according to Le Monde. The measure is also meant to limit use to serious cases, and only for a maximum of six months. Geolocation would be limited to crimes that are punishable by at least five years in prison.

An earlier version of the bill passed the Senate, but the amendment will require that legislative body's approval before it can become law.

Civil liberties advocates are alarmed. The digital rights group La Quadrature du Net previously pointed out the potential for abuse. As the bill isn't clear about what constitutes a serious crime, there are fears the French government might use this to target environmental activists and others who aren't grave threats. The organization also notes that worrying security policies have a habit of expanding to less serious crimes. Genetic registration was only used for sex offenders at first, La Quadrature says, but is now being used for most crimes.

The group further notes that the remote access may depend on security vulnerabilities. Police would be exploiting security holes instead of telling manufacturers how to patch those holes, La Quadrature says.

Justice Minister Éric Dupond-Moretti says the powers would only be used for "dozens" of cases per year, and that this was "far away" from the surveillance state of Orwell's 1984. It will save lives, the politician argues.

The legislation comes as concerns about government device surveillance are growing. There's been a backlash against NSO Group, whose Pegasus spyware has allegedly been misused to spy on dissidents, activists and even politicians. While the French bill is more focused, it's not exactly reassuring to those worried about government overreach.

On Friday, a federal court sentenced Joseph James O’Conner to five years in prison for his involvement in the 2020 Twitter hack. Last month, the 24-year-old, known as PlugwalkJoe online, plead guilty to a host of cyber crimes, including carrying out a SIM-swapping attack that targeted a TikTok account with millions of followers. The 2020 Twitter hack saw O’Conner and his co-perpetrators obtain access to the company’s backend and subsequently the accounts of Elon Musk, Bill Gates, Barack Obama and more than 100 other high-profile users. O’Conner netted $794,000 in the crypto scam that followed.

"After stealing and fraudulently diverting the stolen cryptocurrency, O'Connor and his co-conspirators laundered it through dozens of transfers and transactions and exchanged some of it for Bitcoin using cryptocurrency exchange services," the Justice Department said. "Ultimately, a portion of the stolen cryptocurrency was deposited into a cryptocurrency exchange account controlled by O'Connor." In 2021, Graham Ivan Clark, the alleged teenage mastermind behind the breach, plead guilty in return for a three-year prison sentence. In addition to his five-year sentence, O’Conner also faces three years of supervised release after his prison term. He must also forfeit the $794,000 he defrauded during the hack.

Terraform Labs founder Do Kwon is wanted in South Korea and the US for a scheme that lost investors $40 billion when the company's cryptocurrency plummeted last year — but, for now, he will sit in a Montenegrin prison. Kwon has been found guilty on charges of forging official documents and sentenced to four months in jail after a late March arrest while trying to board a flight to Dubai from Podgorica Airport with fake Costa Rican passports, local newspaper Vijesti reported. Han Chang-joon, Terraform Labs' former finance officer, was also charged and sentenced on the same count. The pair were also found to have forged Belgian passports in their luggage, as well as computers sought by both the South Korean and US authorities. 

Kwon and his associates marketed TerraUSD and Luna as stablecoins pegged to the US dollar, purportedly giving them more, well, stability. They collapsed in May 2022 and took many of their investors' life savings along with them, with these individuals subsequently filing complaints that Kwon had run a Ponzi scheme. South Korea first announced an arrest warrant against Kwon and five associates last September, but he, his family and some of Terraform Labs' finance employees had already fled to Singapore, where the company had registered. Interpol soon put Kwon on the "red notice" list at the request of Korean authorities, signaling law enforcement worldwide to arrest him. Montenegrin authorities cited this as another reason for arresting Kwon. 

The US Securities and Exchange Commission charged Kwon in February with failing to "provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD. We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors." The US District Court in Manhattan publicly released an indictment against Kwon with eight counts, including securities fraud and conspiracy, following his arrest. 

Though Montenegro doesn't have extradition treaties with the US or South Korea, the idea is still on the table. The four-month jail sentence comes shortly after Montenegrin authorities increased their custody stay by six months while determining if and how to proceed with the two nation's extradition requests.