The founder of the cryptocurrency token, who stole $1.14 million in investors’ money and used them to gamble online, was recently sentenced to 27 months in prison
Over the last few years, highly volatile cryptocurrency markets have made many people millionaires. While some were fortunate enough to make the score of their life, others were not so lucky and lost everything.
In one such recent case, investors who supported a charity-oriented cryptocurrency token project lost more than $1 million, after the founder of the project used their money for gambling and personal expenses.
Cryptocurrency Project Shifts Focus from Charity to Metaverse, Game Development
That’s the case of CluCoin, a crypto project founded in Miami, Florida by the 41-year-old Sykesville, Maryland resident identified with the initials A.M.T. The founder of the crypto project, who also had a growing social media fan base and even streamed on Twitch under the nickname DNP3, leveraged his position to help the project lift off.
The launch of CluCoin dates back to May 2021. AT the time, the crypto guru was able to persuade investors to pitch in for the new project that stands out with transparency, focuses on donations to charities and involves the development of a metaverse platform and a game. The idea of CluCoin resulted in significant interest in its initial coin offering (ICO) as the token called “CLU” raised millions.
However, market changes saw CluCoin’s value dip, raising concerns among investors. This is when the founder of the cryptocurrency token confirmed its transition to “the minting of non-fungible tokens (NFTs), the development of a computer game and a metaverse platform,” as explained by the US Department of Justice (DOJ).
Crypto Guru Steals from Investors, Lands in Prison
While some of the investors were skeptical, they still believed in the Miami crypto guru’s plan to continue the development of the project. However, what CluCoin investors didn’t know is that its founder actually withdrew CLU funds and used them for online gambling, among other expenses.
According to the DOJ, the 41-year-old man transferred $1.14 million in investor funds to his personal account between May and December 2022. Then, those funds were used for gambling at a range of online casinos. Ultimately, much of the money stolen from the investors was lost to casino online gambling.
Ultimately, CluCoin’s actions got into the sights of law enforcement as the case was investigated by the FBI and the Attorney’s Office for the Southern District of Florida, Hayden P. O’Byrne. Consequently, US District Judge Jacqueline Becerra sentenced the 41-year-old to prison last month.
The sentencing of the Sykesville resident follows a guilty plea to wire fraud from August 2024. The crypto project’s founder was sentenced to a total of 27 months in prison, as well as three years of supervised release. The court also sentenced him to forfeit assets and pay $1.14 million in restitution.
