Singapore Court Sentences Woman to Nearly 10 Years for $5.7M Bybit Fraud

Singapore Court Sentences Woman to Nearly 10 Years for $5.7M Bybit Fraud

A Singapore court has sentenced Ho Kai Xin to almost ten years in prison after she was found guilty of embezzling $5.7 million from cryptocurrency exchange Bybit while overseeing payroll. Ho exploited her position to manipulate payroll records, redirecting funds into her personal crypto wallets to finance an extravagant lifestyle before being apprehended.

Fraudulent Scheme Exposed

Ho Kai Xin, who worked at crypto networking platform WeChain and managed Bybit’s payroll, engaged in fraudulent activities between May 2022 and February 2023. She altered payroll records using Microsoft Excel to inflate payments and then transferred approximately $4.2 million into her personal cryptocurrency wallets. These funds were subsequently converted into fiat currency and spent on luxury goods, including a Mercedes-Benz, designer handbags, and a nearly $750,000 deposit on a penthouse valued at over $3.7 million.

Her fraudulent activities were uncovered when a WeChain representative reported discrepancies, leading to her arrest in April 2023. During the investigation, Ho attempted to deceive authorities by inventing a fictitious cousin, “Jason Teo,” whom she falsely blamed for the transactions. However, investigators confirmed that no such individual existed.

Recovery and Sentencing

Authorities successfully recovered over $1.1 million in Tether (USDT) from her digital wallets and seized assets worth approximately $330,000, including a luxury car. However, Ho made no attempts to repay the remaining stolen funds.

Ho’s sentencing follows a previous six-week jail term for contempt of court after she ignored an order prohibiting her from spending the misappropriated money. Her latest sentence will commence once she completes her current term, which began on January 27.

Her defense attorney, James Gomez, pleaded for a reduced sentence of eight years and eight months, citing her responsibilities as a mother of two young children. He argued that she had recognized the consequences of her actions. However, prosecutors countered that her deliberate and repeated deception warranted a harsher penalty.

SafeMoon CTO Pleads Guilty to Crypto Fraud

In a separate high-profile case, SafeMoon’s Chief Technology Officer (CTO), Thomas Smith, has pleaded guilty to securities and wire fraud conspiracy. U.S. prosecutors allege that Smith, alongside SafeMoon CEO Braden John Karony and project creator Kyle Nagy, misled investors and siphoned over $200 million for personal use.

A court filing on February 20 revealed that Smith withdrew his initial not-guilty plea before Magistrate Judge Cheryl Pollak, who recommended that U.S. District Judge Eric Komitee accept the new plea. Smith faces a potential sentence of up to 45 years in prison—20 years for wire fraud conspiracy and 25 years for securities fraud conspiracy.

SafeMoon’s Alleged Deception

The U.S. Department of Justice and the Securities and Exchange Commission (SEC) filed charges against Smith, Karony, and Nagy in November 2023. Prosecutors claim the trio falsely assured investors that SafeMoon’s liquidity pool was locked, preventing fund access. Contrary to these claims, the liquidity pool was allegedly accessible, enabling them to withdraw substantial amounts for personal expenditures, including luxury cars and real estate.

At its peak, SafeMoon’s market capitalization ranged between $5.7 billion and $8 billion. However, on April 20, 2021, revelations regarding the liquidity pool’s accessibility triggered a significant sell-off, slashing SafeMoon’s value by nearly half.

Legal Proceedings and Future Implications

While Smith and Karony were arrested, Nagy remains at large and is believed to be in Russia. Both initially sought to have charges dismissed. Meanwhile, Karony recently requested a trial delay, citing potential policy changes under former U.S. President Donald Trump’s crypto stance. However, Judge Komitee denied the request, keeping the trial on schedule with opening statements set for April 7.

SEC’s Response to Rising Crypto Crimes

In light of the growing number of crypto-related fraud cases, the SEC has launched a specialized Cyber and Emerging Technologies Unit to combat financial crimes in blockchain and emerging markets. The increasing frequency of fraudulent schemes highlights the need for regulatory oversight and enhanced investor protection within the cryptocurrency industry.

These developments reinforce the importance of compliance and transparency in the evolving digital asset landscape. As authorities tighten regulations, investors are urged to exercise due diligence when engaging in cryptocurrency investments.