On Tuesday, the United States Attorney’s Office announced that Amir Elmaani, founder of the crypto platform Oyster Protocol, has been sentenced to 4 years in jail due to $5.5m tax evasion and fraudulent accounts management. This is one of many in a string of crypto tax evasions, following the former CEO of FTX, Sam-Bankman Freid.
Oyster Protocol founder jailed for 4 years for $5m tax evasion
US District Attorney Damian William noted:
Amir Elmaani violated the duty he owed to pay taxes on millions of dollars of cryptocurrency profits, and he also violated the trust of investors in the cryptocurrency he founded.
In October 2017, Elmaani promoted a cryptocurrency called Pearl, with marketing campaigns geared toward investors looking to purchase data on a blockchain-based data storage platform, Oyster Protocol. However, the trial revealed that, in October 2017, Elmaani formed and released Pearl tokens into the market for personal gain, thus receiving money and investment from clients, which he then stashed in a secret fund.
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Elmaani admitted guilt in his plea statement:
On or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project. I then sold these newly minted PRL on a digital trading platform.
In a follow-up statement the United States DoJ urged crypto founders to consider the consequences of their fraudulent actions.
Participants in the cryptocurrency markets must play by the rules, and this Office will be tireless in prosecuting those who do not.
