Oyster Protocol Founder Imprisoned for Tax Evasion

Reading Time: 2 minutes
  • Oyster Protocol founder Amir Bruno Elmaani has been imprisoned for four years for refusing to pay taxes
  • Elmaani had also previously admitted to orchestrating an exit scheme on the project
  • The founder had failed to pay taxes amounting to more than $5 million

The United States Attorney’s Office disclosed yesterday that the founder of Oyster Protocol, Amir Bruno Elmaani, will spend four years in prison for failing to pay taxes on profits gained from running his crypto-focused platform. The founder had previously admitted that he also carried out an exit scheme which led to the protocol’s collapse. While pleading guilty in April, Elmaani revealed he defrauded the country over $5 million in taxes, making it among the few cases of tax evasion involving cryptocurrency to be won by law enforcement agencies.

Violating Investors’ Trust and Duty to Pay Taxes

According to District Attorney Damian Williams, Elmaani absconded his duty to pay taxes and “also violated the trust of investors.”

Elmaani started promoting his project before October 2017 by seeking investors to buy the project’s Pearl (PRl) tokens to access Oyster Protocol which he touted as a decentralized data storage platform.

He however wasn’t forthcoming with all the details about the protocol because he later started secretly generating more tokens, selling them and pocketing the profits. Despite generating millions in the scheme in 2017, he told the taxman that he only made $15,000 from a different business.

In 2018, despite spending over $10 million on personal items, investments, and property he filed zero income.

Family and Friends Involved

The authorities unearthed that Elmaani would sometimes use a shell company, family or friends to move crypto funds to his bank account or buy property. Apart from crypto, he was involved in precious metals.

Elmaani’s imprisonment comes three years after John McAfee was arrested in Spain on tax evasion charges. The EU has also published a policy requiring crypto entities such as exchanges to report user activities for taxation purposes.

With Elmaani’s imprisonment, it’s clear that law enforcement and financial regulators are ready to curb crypto-based tax evasion by following the money trail.