Several high-profile crypto-related legal cases have made headlines recently, including Iris Ramaya Au’s guilty plea to tax related offences. Meanwhile, Australian regulators charged Brendan Gunn, the brother of Olympian Rachael Gunn, for allegedly handling funds linked to crypto fraud. ASIC stated that Gunn was accused of dealing with two bank cheques containing funds from four investment transactions totaling $181,000. The US SEC also recently dropped its lawsuit against Cumberland DRW, which is a Chicago-based crypto trading firm. Ex-Girlfriend of Crypto Fraudster Admits to Hiding Millions Iris Ramaya Au, the former girlfriend of Adam Iza, known as ”The Godfather,” agreed to plead guilty to a federal criminal tax charge for failing to report more than $2.6 million in illicit income tied to Iza's fraudulent schemes. The US Justice Department announced her plea on March 5, and revealed that she filed a false tax return in connection with the funds she obtained through her then-boyfriend’s criminal activities. (Source: United States Attorney’s Office ) Iza pled guilty in January, and admitted to orchestrating multiple fraudulent schemes between 2020 and 2024. Some of these schemes included unlawfully acquiring Facebook and Meta advertising accounts, engaging in credit fraud, and selling access to compromised accounts. His fraudulent activities generated millions of dollars in unreported income, which he and Au allegedly used for various expenditures. Under Iza’s direction, Au created shell companies and opened bank accounts in their names to facilitate the movement of illicit funds. These funds were used to pay approximately $1 million in bribes to Los Angeles deputies, as well as to finance luxury purchases, including high-end real estate, cars, jewelry, and designer clothing. Additionally, the pair spent almost $10 million on recreational activities and bought roughly $16 million in cryptocurrency. Iza also founded the Zort crypto trading platform, and admitted to conspiracy against rights, wire fraud, and tax evasion. Among the charges, he confessed to bribing Los Angeles County Sheriff’s Department deputies for private security and directing them to obtain search warrants and confidential law enforcement information to target people with whom he had financial and personal disputes. In her plea agreement, Au acknowledged that she transferred more than $2.6 million from various accounts into her personal bank accounts between 2020 and 2023. As a result of her guilty plea, she now faces up to three years in federal prison. Iza is facing more severe charges, and could receive a maximum sentence of 35 years. His sentencing is scheduled for June 16. Olympian’s Brother Faces Charges in Crypto Fraud Case Meanwhile, Australia’s financial regulator recently charged Brendan Gunn , the brother of Olympian breakdancer Rachael Gunn, for allegedly dealing with money suspected to be proceeds of crime while operating a fiat-to-crypto conversion business. The Australian Securities and Investments Commission announced the charges on March 5, and stated that Gunn was accused of dealing with two bank cheques containing funds from four investment transactions totaling $181,000, which were deposited by three investors for conversion into cryptocurrency. (Source: ASIC ) Gunn was a director at Mormarkets, which is a company that accepted fiat deposits for crypto conversion. According to ASIC, he repeatedly tried to open new bank accounts for the company despite financial institutions closing them because of concerns about fraudulent activities. The regulator stated that Gunn was made aware of these concerns but continued to seek new banking arrangements to facilitate transactions. His sister, Rachael Gunn, performed under the stage name “Raygun” at the 2024 Olympics, and very quickly gained viral attention for her breakdancing routines. Despite losing all three of her battles in the competition, she received support from her brother for her performance. Gunn appeared in court on March 4 and is expected to return on April 29. If convicted, he faces a potential prison sentence of up to three years, a fine of $37,800, or both. ASIC Chair Joe Longo made it clear that the regulator is very focused on scam prevention and enforcement actions against financial crimes. The case comes at a time when Australian regulators are increasing their scrutiny of the cryptocurrency industry. The Australian Transaction Reports and Analysis Center recently took action against 13 crypto exchanges and remittance service providers in February, with over 50 others still under investigation for potential compliance breaches. AUSTRAC CEO Brendan Thomas announced in December that the agency will intensify its oversight of the crypto industry in 2025, particularly targeting cryptocurrency ATM providers suspected of violating anti-money laundering laws. ASIC also proposed new regulations for the digital asset sector, and released a consultation paper in December that could classify many cryptocurrencies as financial products. This will require firms dealing in crypto to get the proper licensing. Another Crypto Case Dropped In other legal news, the US Securities and Exchange Commission (SEC) agreed to dismiss its case against Chicago-based crypto trading firm Cumberland DRW. In a March 4 post on X, Cumberland announced that both parties signed a joint filing to dismiss the lawsuit, which is now awaiting final approval from the agency. The agreement in principle was reached on Feb. 20, and was yet another instance of the SEC dropping a crypto-related lawsuit over the past few months. The SEC initially sued Cumberland DRW on Oct. 10, and accused the firm of operating as an unregistered securities dealer while handling over $2 billion in crypto assets. The regulator alleged that since March of 2018, Cumberland engaged in the buying and selling of digital assets classified as securities, including Polygon (MATIC), Solana, (SOL) Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL). The agency sought permanent injunctive relief, disgorgement of profits, prejudgment interest, and civil penalties. Initial SEC lawsuit announcement against Cumberland DRW (Source: SEC ) Cumberland pushed back against the allegations BY asserting that it registered as a broker-dealer in 2019 and engaged in five years of discussions with the SEC. The firm also claimed it was unfairly targeted under what it described as the SEC’s “enforcement-first approach to stifling innovation.” After the dismissal agreement, Cumberland shared that it is still very much committed to continuing discussions with the SEC to help shape a better regulatory framework that balances innovation with compliance. The case is part of a broader pattern of dropped lawsuits and investigations by the SEC involving the crypto industry. In fact, the regulator recently abandoned cases against major crypto exchanges Coinbase and Kraken, as well as blockchain firm Consensys. It also closed investigations into NFT companies Yuga Labs and OpenSea, along with crypto exchanges Gemini and Uniswap Labs. Meanwhile, Coinbase submitted a Freedom of Information Act request asking for more details on how much the SEC spent on its enforcement actions against crypto firms.
