Stan Higgins | Published on July 28, 2016
The former executive chairman of a publicly listed Australian digital currency startup has been indicted by the US government for his alleged involvement in a fraudulent text messaging scheme.
Zhenya Tsvetnenko was among three parties named in a superseding indictment unsealed last week in the US District Court for the Southern District of New York. Tsvetnenko co-founded DigitalX, which was originally a bitcoin mining firm called DigitalBTC before it moved to launch a payments app called Air Pocket.
US prosecutors have alleged that Tsvetnenko, among other defendants named in the case, was involved with a scheme to sign consumers up for recurring text messages without their consent and make money off of the ensuing monthly fees.
According to the indictment, as many as several hundred thousand mobile phone users were allegedly signed up as part of the scheme. Prosecutors further alleged that those involved pocketed millions of dollars in revenue.
Tsvetnenko was charged with wire fraud, and conspiracy to commit wire fraud and mail fraud, according to court documents. If convicted, he faces up to 40 years in prison.
According to Australian news reports, Tsvetnenko has denied the allegations and plans to fight extradition to the US from Australia, where he resides.
Tsvetnenko resigned from his executive chair position at DigitalX, according to a 25th July announcement, which came three days after US prosecutors announced the charges. DigitalX did not immediately respond to a request for comment.
The full superseding indictment can be found below: