Imagine, you are a crypto trader. You invested thousands of dollars in cryptocurrency through an exchange fund. But, bam your money is turned into ash in one single day. The owner of the company minted money from you and your currency and now, you have nothing except ashes.
The FTX scandal that rocked the crypto traders in 2022 serves as a prime example that how a single businessman has conned people in the name of cryptocurrency. However, FTX is just tip of the iceberg. There are thousands of Sam Bankmans present in the world.
Now, BVI has its FTX-style scandal in the making. But how, let us explain.
According to a media report by Bloomberg Law, CEO of Crypto miner Layer1 has accused his founder of ‘Actively Looting’ the firm.
The CEO of Layer1 Technologies Inc., John Harney and DGF Investments Inc. are suing the founder of Layer1, Jakov Dolic, and his attorney Tobias Ebel for attempting to take control of the Bitcoin mining company.
The lawsuit, filed in Delaware’s Chancery Court, accuses Dolic and Ebel of filling the leadership void created when the board of Enigma Holding AG, Layer1’s Swiss parent company, abruptly resigned and seized control of Layer1 for their personal gain.
The complaint claims Dolic and his supporters have taken advantage of their majority control of the board to loot the company and engage in self-profiting transactions.
The illicit activities behind the door
The alleged sole shareholder of Layer1 is Enigma, a holding company that owns businesses involved in cryptocurrencies but about which little information is made publicly available.
According to a press release from the time, Dolic led Enigma as recently as early 2021, and DGF allegedly now owns the majority of the company.
The complaint claims that in early 2022, Dolic, Harney, and other company executives—some of whom were no longer involved—exchanged their Layer1 shares for either Enigma stock or cash, resulting in Layer1 becoming an Enigma subsidiary.
Dolic has allegedly cashed out for more than $16 million through the transactions. The case is currently being heard in the court of Delaware. Now, what exactly will be the outcome of this is still awaited. But undoubtedly these are really big allegations.
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The money is of public
The first American Bitcoin mining operation to fully integrate renewable energy into its processes was Layer1 Technologies.
The business is currently based in the BVI. The $16 million that Dolic is allegedly siphoning off of the company, its shareholders, and investors in Layer1 is made up of these parties.
There is no doubt that Dolic is imitating what conman Sam Bankman did to FTX and the investors who supported it.
Sam Bankman’s FTX filed for bankruptcy in November after a week in which a possible merger with rival crypto exchange Binance failed, Bankman-Fried got accused of funneling customer deposits to FTX’s affiliated trading firm Alameda Research, and the exchange experienced withdrawals of about $6 billion in just 72 hours.
With the collapse of FTX, many high-spending foreigners who worked for the company and once boosted the local economy have reportedly fled the island, leaving Bahamian security guards to now guard “nearly vacant buildings.”
The company had approximately one million creditors — crypto holders who had thousands, even millions worth of personal wealth held on the exchange withdrew everything as flaws got exposed, and the Bahamas went into slumber.
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The thing with FTX is that everything about Sam Bankman was out in the open. But, Layer1 is a really cryptic company and no one really knows anything about it. No one knows what exactly is happening. What if the originally siphoned money is more than $16m? Is BVI ready for the shock?
