South African crypto developer Riccardo ‘Fluffypony’ Spagni has been denied bail by the US court ahead of his extradition hearing on fraud charges.
Fraud Charges And Arrest Of Fluffypony
In late August, we reported on the arrest of Spagni by US authorities on fraud charges from before his Monero days. The allegations against him claimed that he had defrauded his former employer, Cape Cookies, by submitting false invoices worth $10,000. However, the former lead-maintainer of the privacy coin, Monero, has denied the charges and pled guilty. According to the court documents surrounding his arrest, Spagni is considered a high flight risk due to his personal wealth amounting to around $800,000. He was reportedly being held in custody by the US Marshals without a bond because of this.
Defense Counsel Brushes Off Allegations
Spagni had hired defense counselor and famous crypto-lawyer Brian Klein, who claimed misrepresentation of facts. Klein had filed for Spagni’s bail release until the extradition hearing, claiming lack of evidence and faulty prosecution proceedings. He also claimed that Spagni’s alleged offense is punishable by not more than 60 months in prison under South African law and not the trumped-up 20-year sentence, as presented by the US authorities.
Fluffypony A Flight Risk – Judge Rules
However, a US judge has rejected his bail plea and ordered Spagni to be remanded in custody till the extradition hearing. The judge ruled that since Spagni traveled to the US instead of appearing in court in Cape Town without conveying the information to his own SA lawyer, he continues to be a flight risk.
“Had Spagni notified the South African court of his situation…or had Spagni taken any steps to acknowledge that he was required to appear on the charges against him and needed to remedy his anticipated absence—the court might reach a different conclusion. He did not, and so the court finds that Spagni has not established by clear and convincing evidence that he poses no risk of flight and would appear at future court proceedings.”
Are Privacy Coins A Menace?
Many in the crypto community are opining that the charges against Fluffypony and the subsequent bail denial were a consequence of the recent tightening of regulations against privacy coins like Monero. Monero is also turning out to be the crypto of choice among cybercriminals, with its untraceability a winning point among ransomware gangs.
Plus, as the most widely used privacy coin on the market, Monero has faced more than its fair share of scrutiny from the financial watchdogs. With more and more exchanges (Bittrex, ShapeShift, etc.) removing Monero from their offerings, the regulatory noose is proverbially tightening around such coins. In some countries, the ban has been instituted on a national scale. For example, since March 2021, South Korea is no longer allowing its crypto exchanges to host Monero and other privacy coins.