Himalaya Exchange customers seek release of frozen funds from DOJ

abdelaziz Fathi

FormerFeds, a corporate defense and litigation service provider, has filed a lawsuit against the U.S. Department of Justice (DOJ) on behalf of over three and a half thousand Himalaya Exchange customers.

Himalaya Exchange

The action, filed in the U.S. District Court for the Southern District of New York, challenges the DOJ’s freezing of funds and assets belonging to investors in the cryptocurrency ecosystem Himalaya Exchange.

The DOJ and FBI have seized $634 million from 21 bank accounts, alleging these to be proceeds of fraud, and are seeking permanent forfeiture. The government said that over $262 million in victim funds were fraudulently accessed through the Himalaya Exchange, which includes the Himalaya Dollar and Himalaya Coin.

However, Bradford L. Geyer, representing the plaintiffs, claims that unlike typical fraud cases involving cryptocurrency exchanges, Himalaya Exchange has not been indicted, and there is no evidence that customer funds were improperly managed. Geyer argues that his clients, including business owners, educators, healthcare workers, students, and corporate employees, were not defrauded by the Exchange but have suffered due to the DOJ’s actions.

The lawsuit contends that the DOJ’s actions were unjust and have caused “significant financial and psychological distress to innocent individuals.” These individuals, primarily non-U.S. citizens, were allegedly attracted to “Himalaya Exchange’s strict compliance procedures and its stance as a secure investment platform.”

The legal action criticizes the DOJ’s seizure of funds as contradictory to U.S. interests and policies, impacting people who sought protection against the Chinese Communist Party’s (CCP) influence.

The Himalaya Exchange was portrayed as a critical platform for the global expatriate Chinese community, offering independence and data privacy. The legal team argues that the DOJ’s actions not only infringe on financial stability but also assault the dignity and human rights of these individuals, acting in alignment with the CCP’s coercive tactics.

Earlier in March, Chinese billionaire Ho Wan Kwok, also known as Miles Guo or Guo Wengui, was arrested in New York on twelve charges including wire fraud, securities fraud, bank fraud, and money laundering. The Department of Justice alleges that Kwok/Guo fraudulently obtained over $262 million from victims through the cryptocurrency platform Himalayan Exchange.

Himalayan Exchange offered assets such as Himalaya Dollar (HDO) and Himalaya Coin (HCN). The indictment claims Guo misled investors about the backing and security of these assets, stating that HCN was 20% backed by gold and promising to cover 100% of trading losses personally.

In a separate incident, Guo allegedly raised $452 million from over 5,500 investors in an initial public offering (IPO) for GTV Media Group shares. The U.S. Securities and Exchange Commission had previously taken enforcement action against three of Guo’s companies for unregistered ICOs and IPOs in 2021, resulting in fines and penalties totaling over $539 million.

Guo, a close friend of former White House chief strategist Steve Bannon, gained prominence in real estate and construction in China before fleeing the country in 2014 amid charges of bribery, kidnapping, money laundering, fraud, and rape. Living in self-imposed exile in the U.S., he sought asylum and has been a vocal critic of the Chinese Communist Party (CCP). However, some documents he used in his critiques of the CCP have been alleged to be forged, and an Interpol red notice has been reportedly active since 2017.

    Read this next

    Retail FX

    Lark Funding reopens to US traders, MyFundedFX picks cTrader

    Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

    Institutional FX

    Cboe FX volume falls to lowest level since summer

    Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

    Retail FX

    ThinkMarkets secures lucrative DFSA license in Dubai

    Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

    Digital Assets

    New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

    Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

    Digital Assets

    Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

    Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

    Digital Assets

    Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

    Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

    Institutional FX

    Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

    Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

    Industry News

    Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

    In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.

    Fundamental Analysis

    Global FX Market Summary: EUR, USD March 1st, 2024

    The ISM’s February Manufacturing PMI is expected to show a slight increase, but remain below the expansionary threshold, while inflationary pressures persist and a Fed rate cut in June is still possible.