Crypto
Horst Jicha skips bail in $150 million USI Tech crypto fraud case in New York
Horst Jicha discussing cryptocurrency.
Source: Team Business Global | YouTube
A German national who was under home detention in New York City on a $5 million bond guaranteed by his domestic partner and children in a case in which he was charged with overseeing a $150 million cryptocurrency fraud is now a fugitive.
“There’s a very active investigation underway to capture him,” said John Marzulli, a spokesman for the Brooklyn U.S. Attorney’s Office, on Friday, a day after the defendant, Horst Jicha, failed to appear in Brooklyn federal court as scheduled.
“We are going to forfeit the bond,” Marzulli added, meaning that prosecutors will seek to obtain the $4 million portion of the bond that was personally guaranteed by Jicha’s partner, children and three other people, all of whom live in Germany.
Another $1 million in cash to secure the bond had been deposited with the federal government.
Horst is suspected of having tampered with his ankle bracelet monitor on Oct. 3, a prosecutor from the Brooklyn U.S. Attorney’s Office told a judge Thursday at a hearing that was supposed to address pre-trial issues in the case.
After noticing that Jicha’s ankle bracelet was not working, Pretrial Services officials sent him an email directing him to visit their office the next day. Jicha did not show up, the prosecutor told U.S. District Court Judge Orelia Merchant.
Only then did Pretrial Services inform prosecutors that Jicha’s ankle bracelet had ceased working, 26 hours after becoming aware of that fact, the prosecutor told the judge.
Jicha’s defense lawyers did not immediately reply to a request for comment.
CNBC has requested comment from Pretrial Services in Brooklyn federal court.
U.S. Attorney Breon Peace gives a statement after a former U.S. Rep. George Santos court hearing on August 19, 2024 in West Islip, New York.
Michael M. Santiago | Getty Images
Jicha is scheduled to go on trial in the case March 31, where he faces multiple charges of securities fraud and conspiracy related to a multi-level marketing scheme known as USI Tech.
According to prosecutors, Jicha lied to retail investors when he told them they would make an average of 140% returns on their money in a 140-day period.
Investors were told that there were two ways they could make money: First, they could invest in what were purportedly bitcoin mining and trading operations. They could also earn commissions for referring others to buy USI Tech products, the indictment against Jicha says.
“In reality the platform was just a facade, and when questions arose, Jicha stole millions of his investors’ money and fled the country,” FBI Assistant Director-in-Charge James Smith said in January.
As of Friday, Jicha’s whereabouts were unknown. Court records show he had lived in Brazil and Spain before he was arrested in Florida in late 2023.
Jicha was released on bond in January, and had lived in Brooklyn.
Under the conditions of Jicha’s release, he was obligated to remain in New York City or Long Island, and not to leave his home save for court appearances, attorney visits or medical appointments, unless authorized by Pretrial Services.
Jicha, 64, also was required to surrender all passports and travel documents as a condition of his release.
Court records show that Jicha’s $5 million release bond was guaranteed and signed in January by his domestic partner Ewa Jicha, as well as by Jicha’s adult son and his three daughters, and by the boyfriend of one of Jicha’s daughters and by the boyfriend’s brother and father, court records show.
All of those people were residents of the German state of Baden-Württemberg, according to court records.
But under the terms of the bond, they are also personally responsible for the bond’s amount.
After Horst Jicha was released, Ewa Jicha acted as the third-party custodian for him, and was required to report any violations of his release to a U.S. Probation officer.
Jicha was arrested on Dec. 23 in Miami, after entering the United States for the first time in more than five years, to vacation there.
Prosecutors allege that Jicha launched USI Tech in Europe, where, as a co-founder and CEO, he claimed the company would make “cryptocurrency investments easy and accessible to the average retail investor.”
“In reality, it was a multilevel marketing scheme that relied on investors recruiting other investors below them to buy various purported cryptocurrency investments,” the U.S. Attorney’s Office said in January.
“In 2017, Jicha brought USI Tech to the United States and aggressively marketed it to U.S. retailers on social media and through in-person presentations in which he falsely guaranteed high returns on investments and made false claims about the legality of the platform’s investment offerings,” the office said. There are multiple videos on YouTube showing Jicha hyping the company.
In early 2018, after USI Tech came under regulatory scrutiny in the U.S., “it ceased all U.S. operations overnight, leaving investors with no ability to access their money and resulting in millions of dollars in losses.”
Prosecutors said that much of the missing money in the scam, “valued at approximately $150 million as of the date of his arrest,” was held in the form of ether and bitcoin cryptocurrency. After USI Tech stopped operating, that cryptocurrency was sent to digital deposit addresses controlled by Jicha.
The largest token changed hands at US$96,200 as of 2pm Friday in Hong Kong, partly paring a retreat of almost 3 per cent from a day earlier. Smaller rivals including ether and dogecoin, a favourite of the meme crowd, oscillated in tight ranges.
The crypto market is also braced for the expiry of a substantial quantity of bitcoin and ether options contracts on Friday – one of the biggest such events in the history of digital assets, according to prime broker FalconX.
The notional value of the bitcoin contracts on the Deribit exchange – one of the largest for digital-asset derivatives – exceeds US$14 billion, while the equivalent figure for ether is about US$3.8 billion.
Sean McNulty, director of trading at liquidity provider Arbelos Markets, flagged the risk of a “choppy market” amid the expiry of the derivatives positions.
Russian businesses are reportedly using bitcoin and other cryptocurrencies to make international payments.
It’s a trend that comes in the wake of legislative changes that permitted these types of payments to get around western sanctions, Reuters reported Tuesday (Dec. 26), citing comments from Russian Finance Minister Anton Siluanov.
As the report noted, the sanctions — issued following Russia’s invasion of Ukraine in 2022 — have made it tougher for Russia to trade with partners like China and Turkey. But this year, Russia began allowing crypto for foreign trades, and is working on legalizing the mining of crypto such as bitcoin.
“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia (in foreign trade transactions),” Siluanov told Russia 24 television channel.
“Such transactions are already occurring. We believe they should be expanded and developed further. I am confident this will happen next year,” he said, adding that using digital currencies to make international payments represent the future.
PYMNTS explored this idea earlier this week in a report on events in the cryptocurrency/blockchain world in the past year.
“Cross-border payments, historically plagued by high fees and slow transaction times, underwent a significant transformation in 2024,” that report said. “Blockchain technology emerged as a key enabler, offering transparency, speed and cost efficiency.”
Stablecoins play a key role, PYMNTS added, letting businesses bypass traditional correspondent banking networks and settle transactions almost instantly.
“Blockchain technology and public blockchains in particular, are opening up a number of new use cases, one of which is to transfer value — such as remittances — from one country to another,” Raj Dhamodharan, executive vice president, blockchain and digital assets at Mastercard, told PYMNTS.
Research by PYMNTS Intelligence has found that cryptocurrency use in making cross-border payments could be the winning use case that the sector has been searching for. The research shows that blockchain-based cross-border solutions, especially stablecoins, are being increasingly used by firms looking for better ways to transact and expand internationally.
“Blockchain solutions and stablecoins — I don’t like to use the term crypto because this is more about FinTech — they’ve found product-market fit in cross-border payments,” Sheraz Shere, general manager of payments and commerce at Solana Foundation, said in an interview here earlier this year. “You get the disintermediation, you get the speed, you get the transparency, you get extremely low cost.”
Crypto
Markets Show Resilience Ahead of End-of-Year Options Expirations: Bybit x Block Scholes Crypto Derivatives Report
DUBAI, UAE, Dec. 26, 2024 /PRNewswire/ — Bybit, the world’s second-largest cryptocurrency exchange by trading volume, released the latest Crypto Derivatives Analytics Report in collaboration with Block Scholes, highlighting the muted market volatility despite major options expirations on Friday. BTC and ETH’s realized volatility has increased, but short-term options haven’t adjusted to this change. This indicates that while spot prices are fluctuating, the options market is not fully reacting to these shifts, although BTC and ETH volumes have displayed slightly different patterns.
Sources: Bybit, Block Scholes
With more than $525 million in BTC and ETH options contracts expiring on Dec 27, 2024’s end-of-year options expiration looks set to be one of the biggest yet, yet expectations for volatility have remained subdued. The report highlights an unusual inversion in ETH’s volatility structure, but BTC has not mirrored the reaction. Additionally, a change in funding rates—sometimes turning negative as spot prices drop—signals a new market phase. Notably, BTC’s volatility structure has been less responsive to changes in spot prices, whereas ETH’s short-term options are exhibiting more noticeable fluctuations.
Key Findings:
BTC Options Expirations:
In the past month, BTC’s realized volatility has been higher than implied volatility on three occasions, each time reaching a relatively calm equilibrium. Open interest in BTC options remains high, contributing to potential increased volatility as we near the end of the year. Around $360 million worth of BTC options (both puts and calls) are set to expire soon, which can affect price movement.
ETH Options: Calls Dominate
Despite a mid-week inversion, ETH’s volatility term structure has flattened, maintaining levels similar to those seen over the past month. In the final week of 2024, calls overwhelmed puts in open interest in ETH options, although market movements and trading activities are more on the put side.
Access the Full Report:
Gain deeper insights and explore the potential impacts on your crypto trading strategies by downloading the full report here: Bybit X Block Scholes Crypto Derivatives Analytics Report (Dec 24, 2024)
#Bybit / #BybitResearch
About Bybit
Bybit is the world’s second-largest cryptocurrency exchange by trading volume, serving a global community of over 60 million users. Founded in 2018, Bybit is redefining openness in the decentralized world by creating a simpler, open and equal ecosystem for everyone. With a strong focus on Web3, Bybit partners strategically with leading blockchain protocols to provide robust infrastructure and drive on-chain innovation. Renowned for its secure custody, diverse marketplaces, intuitive user experience, and advanced blockchain tools, Bybit bridges the gap between TradFi and DeFi, empowering builders, creators, and enthusiasts to unlock the full potential of Web3. Discover the future of decentralized finance at Bybit.com.
For media inquiries, please contact: [email protected]
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