According to prosecutors, Wengui was arrested in March 2023 and is scheduled to be sentenced on November 19. The defendant raised about $500 million from retail investors for a token called Himalaya Coin, also known as H-Coin (HCN), which he claimed was 20% backed by gold. The token was sold primarily through the Himalaya Exchange.
The regulator claims that H-Coin was not registered as a security or even qualified as a crypto product. The Himalaya Coin whitepaper presented a token purchase system based on user credit. Investors were supposed to purchase credits through Himalaya Exchange’s internal stablecoin, the Himalaya Dollar. However, investors were not given any information about the functions of the smart contracts involved.
U.S. Attorney Damian Williams of the Southern District of New York said Wengui fraudulently raised funds from investors and then spent the money on a lavish lifestyle, including a mansion, a Lamborghini and a $37 million yacht. Williams said the offender faces decades in prison.
Recall that in July, US authorities found three creators of the fraudulent project Evolved Apes, who defrauded investors of $3 million. In June, the New York prosecutor’s office opposed a mitigation of the sentence for Ethereum developer Virgil Griffith, who held a conference on blockchain in North Korea several years ago.
Source: Bits
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