Feds Arrested Oyster Protocol’s Exit Scam Founder Bruno Block

The feds arrested Oyster Protocol’s exit scam founder Bruno Block who reportedly didn’t report his earnings to the IRS back in 2018. Block was arrested on tax evasion of his crypto income so let’s find out more in today’s cryptocurrency scam news.

Amir Bruno Elmaani, known as Bruno Block, was arrested by the feds and charged with a tax-evasion scheme worth millions of dollars from the Ethereum-blockchain-based Oyster Protocol and the native crypto Pearl that he created. According to a press release from the US Attorney Office for the Southern District of New York, the Securities and Exchange Commission filed civil charges as well against Elmaani which were related to the exit scam that is believed to be perpetrated by him.

Elmaaani failed to list the earnings from the Oyster protocol token sale that raised 300 ETH and he even sold more of his Pearl tokens via a secondary market. He benefited from an exit scheme back in 2018 when he allegedly exploited a smart contract to the re-opening of the crowd sale and take out the pearl tokens thus killing the project in the process. At that time, Oyster had a market cap of $15 and $20 million while the token was valued at $0.20.

The exploit allowed 1 ETH to be sent to the contract in exchange for 5000 PRL. ETH could then be withdrawn while the newly minted-PRL token was sold on KuCoin. The process could then be repeated multiple times until people got wiser and the transactions were stopped. He created new tokens though the supply was meant to be fixed and then he exchanged it for other crypto-assets and cashed out. The Acting U.S. Attorney Audrey Strauss explained:

“As alleged, Amir Bruno Elmaani purported to establish a high-tech method of financing a high-tech business, but the underlying scheme was old-fashioned fraud and tax evasion.  Elmaani allegedly generated millions by soliciting investor money through his own cryptocurrency, adding to the purportedly fixed number of tokens and converting them to other cryptocurrencies, and failing to report or pay tax on any of the proceeds.”

Since Oyster Protocol ran on the ETH blockchain, the feds arrested Mr. Block since they were able to track the movement of Pearl and ETH tokens through a “foreign-based exchange.” Despite this, according to the indictment:

“The only income reported on the 2017 Return was self-employment income of approximately $15,00, from a business described as ‘patent design.”

It caught the Justice Department’s eye since he spent more than $10 million on yachts, more than $1.1 million on homes and renovations back in 2018.