Virtual currency scammer gets 33-month prison sentence

Maria Nikolova

Patrick McDonnell, head of Coin Drop Markets, was sentenced to 33 months of imprisonment for wire fraud.

Patrick McDonnell who last year pleaded guilty to wire fraud in connection with a scheme to defraud investors in virtual currency, got a 33-month prison sentence on Thursday.

The Federal court in Brooklyn issued the sentence. In addition, McDonnell was ordered to pay $224,352 in restitution.

According to the indictment against McDonnell, from November 2014 to January 2018, he portrayed himself on social media as an experienced trader in virtual currency, promising investors he would provide trading advice and purchase and trade virtual currency on their behalf. Beginning in approximately May 2016, McDonnell made similar representations and promises to investors through his Staten Island-based company, CabbageTech, Corp., also known as Coin Drop Markets.

But neither McDonnell nor CabbageTech provided investment services. In reaility, McDonnell sent investors false financial statements showing that their investments had been profitable, and stole their money for his personal use.

In total, McDonnell defrauded at least 10 victims of at least $194,000 in US currency, 4.41 Bitcoin, 206 Litecoin, 620 Ethereum Classic and 1,342,634 Verge currency, for a total loss of $224,350. In addition to lying to investors about his company’s prowess, McDonnell also solicited customers using a false alias, “Jason Flack,” an individual who did not actually exist.

“Mr. McDonnell used his knowledge of virtual currencies to scam investors. While he thought he could outsmart law enforcement, his arrest and today’s sentence shows, no matter where you are, what’s done in the dark will be brought to the light,” stated USPIS Inspector-in-Charge Philip R. Bartlett.

Read this next

Digital Assets

Valkyrie pulls back on Ether futures merge with Bitcoin ETF

Valkyrie Funds LLC will suspend the purchase of Ether (ETH) futures contracts for its Valkyrie Bitcoin and Ether Strategy ETF (BTF.O). Additionally, the firm will unwind any positions in Ethereum that it has already acquired.  

Digital Assets

Hong Kong police arrest 18 in $1.5B billion JPEX fraud

The investigation into the JPEX crypto exchange scandal continues to unfold as Hong Kong and Macau police arrest four more individuals. These arrests, which include individuals considered “relatively close to the core” of the scandal, bring the total number of detentions to 18.

Digital Assets

Gemini tells Dutch users to withdraw assets by November 17

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, announced that it will cease providing services to customers in the Netherlands, citing regulatory requirements imposed by the country’s central bank.

Digital Assets

SEC puts BlackRock, Valkyrie, and Bitwise Bitcoin ETFs on hold

The U.S. Securities and Exchange Commission has delayed its decisions on several bitcoin exchange-traded fund (ETF) proposals, leaving many in the crypto industry feeling pessimistic for any future blessing from the agency.

Digital Assets

Ripple backs out of Fortress Trust acquisition

Ripple has decided to cancel its planned acquisition of Fortress Trust, a custodian company, less than a month after initially announcing the agreement.


France regulators blacklists 21 FX brokers, FuturBTC

France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), today shed light on several unregulated forex brokers representing their offering under several brands. Notably, the AMF has identified only one crypto-assets provider in its latest warning.  

Digital Assets

Flare and Arkham Collaborate for Enhanced Decentralized Data Access

Flare’s blockchain for decentralized data acquisition integrates with Arkham’s Intelligence Platform, offering users advanced analytics and actionable on-chain insights.

Industry News

iFX EXPO International 2023 Successfully Concludes

The most talked about financial event of the year took place in Limassol, Cyprus.

Retail FX

Plus500 Forex Garners Market Attention In The Latest Expert Ranking

Securing the 58th spot in Traders Union’s Best Forex Brokers of 2023 ranking, Plus500, despite its cautionary overall score of 6.3 out of 10, stands out for its stringent regulatory compliance, user-centric WebTrader platform, and a commendable focus on account security, though it lags in providing advanced trading tools and trust management features.