New York Authorities Charge Fake Crypto Recovery Firm

Approximately $14,000 that Coin Dispute Network administrators are purported to have stolen from users was seized by the New York County District Attorney.

A person has been charged with criminal activity by Manhattan District Attorney Alvin Bragg for using a “sham cryptocurrency asset recovery business” to defraud customers.

The New York Country District Attorney’s office announced on August 1 that Michael Lauchlan had been charged with three counts of grand theft and two counts of conspiracy to defraud for his involvement in the theft of assets from Coin Dispute Network users.

The DA asserted that the “sham” platform could trace and recover lost crypto assets; however, it defrauded customers of fees and stole Ether from at least three users.

According to Homeland Security Investigations New York Special Agent in Charge Ivan Arvelo, Michael Lauchlan is purportedly responsible for defrauding his consumers of thousands of dollars in sham services and stolen assets by exploiting their lack of experience with the cryptocurrency industry.

Between July 2022 and June 2023, Coin Dispute Network assisted in recovering crypto transactions and blockchain analysis and tracing. In June 2023, the firm’s website was confiscated by Bragg’s office.

On July 9, authorities apprehended Lauchlan, who also operates under the pseudonym Max Handler, in Las Vegas.

Coin Dispute Network transferred approximately $14,000 in user funds to CoinEx, which the New York County District Attorney seized. The complaint alleges that over 175 individuals were impacted by the alleged false claims made by Coin Dispute Network regarding the ability to retrieve missing crypto.

Federal and state authorities have taken several actions in New York against crypto firms alleged to be operating outside of regulatory guidelines and individuals connected to illicit practices.

Former FTX CEO Sam Bankman-Fried was indicted, tried, convicted, and sentenced in a New York courtroom. Additionally, Letitia James, the Attorney General of New York, has initiated legal proceedings against specific crypto firms on behalf of residents who have suffered financial losses.