Amir Bruno Elmaani, the 31-year-old founder of the now-defunct cryptocurrency project Oyster Protocol, has been sentenced to four years in prison for tax evasion. Elmaani, also known as “Bruno Block,” admitted to secretly creating and selling Pearl tokens without paying taxes on the profits, causing tax losses of over $5.5 million.
Oyster Protocol creator’s tax evasion scandal
In 2017, Elmaani promoted a cryptocurrency called Pearl (PRL), marketed as a way for investors to buy data on a blockchain-based data storage platform. Without the knowledge of Oyster Protocol’s team and investors, he secretly minted a significant number of new PRL tokens and sold them for personal gain in October 2018.
Elmaani confessed in his plea agreement, “I used the smart contract to mint new PRL without telling anyone, including others who worked on the Oyster Protocol project.” He also acknowledged that the buyers of these newly minted PRL likely needed to be made aware of the increased supply.
Despite earning millions from this scheme, Elmaani filed false tax returns, claiming minimal income from a patent design business and reporting zero income in 2018.
The court discovered that he spent extravagantly on yachts, a carbon-fiber composite company, home improvements, and real estate, some purchased through shell companies or associates. He also engaged in precious metals trading and stored gold bars in a yacht’s safe.
Cryptocurrency profits covered through nominees
Elmaani used friends and family as nominees to receive cryptocurrency proceeds and transfer them to his accounts, evading taxes on his cryptocurrency profits. In addition to his four-year prison term, Elmaani will serve one year of supervised release and must pay $5.5 million in restitution.
This case highlights the consequences of tax evasion in the cryptocurrency space and the need for transparency and compliance within the industry.
Moreover, in a report by Todayq News on August 25, 2023, the United States Treasury Department introduced a new rule that mandates cryptocurrency brokers, including exchanges and payment processors, to report user information, cryptocurrency sales, purchases, and digital asset exchanges to the Internal Revenue Service (IRS).
This regulatory move aims to simplify tax reporting in the cryptocurrency realm, combat potential tax evasion, and promote accountability. This development represents a step toward greater clarity and compliance within the cryptocurrency market, benefiting both users and regulators alike.
