Amir Bruno Elmaani, famously known in the cryptocurrency world as “Bruno Block” and the founder of the Oyster Protocol has been sentenced to four years in prison for tax offenses amounting to over $5.5 million.
The United States Attorney for the Southern District of New York, Damian Williams, announced the verdict, highlighting the severity of Elmaani’s actions that violated both tax laws and investor trust.
Conviction of Tax Offenses
Elmaani’s conviction stems from a series of deceptive practices related to the cryptocurrency “Oyster Pearl.” In September and October of 2017, he began promoting Pearl tokens, claiming they would be used for an online data-storage platform called Oyster Protocol. Operating almost exclusively under the pseudonym “Bruno Block,” Elmaani concealed his true identity from prospective employees and business associates.
Elmaani conducted an initial coin offering (ICO) to sell Pearl tokens, intending to retain a “founder’s share” for personal use. He controlled Oyster Protocol Inc. through a shell company unassociated with his real name, maintaining a deliberate veil of secrecy.
His actions led to significant financial gain, but his evasion of tax responsibilities eventually caught up with him.
The founder’s deceptive actions took a toll on the value of Pearl tokens. In late October 2018, he exploited his access to blockchain technology to mint new Pearl tokens for personal use, significantly increasing their total supply.
Shortly after, he converted these newly minted tokens to other types of cryptocurrency on an online marketplace or exchange. This scheme led to a halt in trading and a substantial drop in the price of Pearl tokens held by investors, eventually resulting in their delisting from the primary exchange.
Elmaani’s conduct not only damaged the trust of investors but also highlighted the need for regulatory oversight in the cryptocurrency market. Participants in the cryptocurrency markets must adhere to established rules, and this case serves as a stark reminder of the consequences for those who fail to do so, according to U.S. Attorney Damian Williams.
Exposing Elmaani’s Tax Evasion Scheme
Elmaani’s extravagant spending habits further exposed his tax evasion scheme. Despite filing a false 2017 tax return claiming only approximately $15,000 of income from a “patent design” business, he made substantial expenditures in 2018. These included the purchase of multiple yachts, a significant investment in a carbon-fiber composite company, extensive spending at a home improvement store, and acquiring two homes, one titled in the name of a shell company and the other in the name of associates.
The tax loss to the United States resulting from Elmaani’s actions amounted to approximately $5,523,794. This case underscores the importance of transparent financial reporting and the consequences for those who attempt to evade their tax obligations.