A German national accused of overseeing a $150 million crypto fraud has turned fugitive after failing to appear in court.

Horst Jicha was facing trial on charges of securities fraud, wire fraud, and money laundering over his alleged involvement in the USI Tech cryptocurrency scheme.

Per CNBC, Jicha is suspected of tampering with his ankle bracelet monitor, after Pretrial Services noticed that it had stopped working. Jicha then failed to respond to an email from Pretrial Services directing him to visit their office.

Over a day had elapsed before Pretrial Services notified prosecutors that Jicha’s ankle monitor had stopped working, CNBC reported. Following his failure to appear in court, there is a “very active investigation underway to capture him,” John Marzulli, a spokesman for the Brooklyn U.S. attorney’s office, said.

Jicha was on a $5 million bond guaranteed by his domestic partner, his children, and three others, which will be forfeited following his flight.

What was USI Tech?

Jicha is accused of operating USI Tech, a “multilevel marketing scheme to defraud U.S. investors excited about the crypto market,” U.S. Attorney for the Eastern District of New York Breon Peace said in a January 2024 statement announcing the charges.

USI Tech allegedly guaranteed returns to investors. In reality, prosecutors contend, the platform was “just a facade,” and after questions were raised, Jicha absconded with over $150 million of investors’ funds, the bulk of which was held in Bitcoin and Ethereum.

Per CNBC, Jicha was placed under house arrest, and was required to surrender all passports and travel documents to the authorities as a condition of his release.

Edited by Andrew Hayward

Days after the U.S. government announced unprecedented criminal and civil charges against four crypto companies for alleged market manipulation and “wash trading,” meme coin projects dependent on those same firms have begun attempting to distance themselves from the fallout. 

In particular, token teams that partnered with one of the implicated companies, the market maker Gotbit, have started issuing statements vigorously disavowing the firm they depended on for liquidity.

“We have halted our relationship with Gotbit, who were our market maker partners,” the Ethereum meme coin project Neiro posted on Twitter Friday. “None of the issues involving Gotbit or its employees involve or are relevant to Neiro in any capacity.”

Members of the crypto community were not so quick to accept Neiro’s assurances. The pseudonymous on-chain sleuth ZachXBT, for example, soon after excoriated Neiro for partnering with Gotbit prior to this week’s charges, despite the fact that concerns about the market maker have been public knowledge for over a year. 

Other meme coin projects jumped on Friday to make clear they didn’t want to associate with Gotbit any longer—despite the fact that the self-described hedge fund and meme coin market maker still exercised substantial control over their tokens.  

“Unfortunately, Gotbit still holds a large portion of our supply, including marketing, treasury, and team tokens, and they are currently unwilling to return them,” the team behind the Tron meme coin BMS conceded, in a post intended to announce a severing of ties with the company. 

Even meme coins that claim to have stopped working with Gotbit prior to this week made a point of emphasizing their condemnation of the company’s alleged conduct.

The U.S. Department of Justice (DOJ) has accused Gotbit of making illegal wash trades with digital tokens to artificially inflate the tokens’ prices, before selling off the tokens in alleged “pump and dump” schemes. The U.S. Securities and Exchange Commission (SEC) further accused Gotbit of providing “on-demand market manipulation” by “generating fake, daily trading volume often in the millions of dollars by essentially trading crypto assets with itself.”

Those allegations probably surprised very few. Back in 2019, Gotbit co-founder Alexey Andryunin openly told CoinDesk in detail about his company’s business model: manipulating crypto markets for a fee, to increase the perceived legitimacy of obscure tokens. 

“The business is not entirely ethical,” Andryunin said at the time.

Edited by Andrew Hayward

Binance executive Tigran Gambaryan has been denied bail “despite him meeting all the requirements for bail to be granted on medical grounds,” a family spokesperson told Decrypt.

Gambaryan has “suffered countless health scares and is now at a point where he is in so much physical pain from a herniated disc in his back that he can no longer walk without assistance,” the spokesperson said.

Reports about the executive’s failing health have been public for months now. In July, Nigerian officials claimed that he was “fine” a few weeks before a report from his wife countered by saying he was in “shockingly bad” condition and in need of specialized, high-risk surgery.

Gambaryan’s detention began in February after he and another executive flew in to negotiate with the nation’s authorities regarding a ban on several crypto trading websites, including Binance, Coinbase, and Kraken.

Gambaryan, who oversees the company’s financial crime compliance, was initially detained with fellow executive Nadeem Anjarwalla. They’d been asked to meet with the country’s Congress in response to allegations from the Empowerment for Unemployed Youths and Niger Delta Youths Council, which included terrorist financing, money laundering, and tax evasion.

Gambaryan and Anjarwalla were initially charged with tax evasion and money laundering, but the tax evasion charge was later dropped.

In late March, Anjarwalla managed to escape custody and after he asked permission to visit a local mosque for prayers under guard. Per reports in local media, he is believed to have used a concealed passport to flee the country.

“It is completely unjust to deny someone in Tigran’s condition the opportunity to seek appropriate medical help and I just pray that when he is finally released that the damage he is suffering is not permanent,” Yuki Gambaryan, Tigran’s wife, said through her family’s spokesperson. “I am exhausted and deeply disappointed, but I will continue fighting for my husband’s rightful freedom.”

Meanwhile, Rep. Rich McCormick (R-GA) has been pushing for the U.S. to intervene on Gambaryan’s behalf.

“Some [politicians] are not paying attention because there’s a lot of things going on this election cycle. People are distracted. It’s easy to ignore one person or one family,” McCormick told Decrypt last week.

“But also crypto is something that’s very, very misunderstood still,” he added. “There’s been some laziness, quite frankly, looking into the details of the case.”