Ex-Employee Jailed 5 Years for Stealing $14M in Crypto Tokens

A court in Paris has sent a former crypto company employee to prison for one of the boldest insider thefts in the industry.

What happened? A man who used to work for Holograph Foundation abused his old job access to secretly create and steal 1 billion tokens (digital coins that run on blockchain technology, similar to a brand's own currency) called HLG. These tokens were worth around $14 million at the time.

On November 6, the Paris Criminal Court found him guilty of several serious crimes:

• Illegal access to a computer system
• Fraud committed by an organized group
• Money laundering (hiding where illegally obtained money came from)
• Being part of a criminal organization

The sentence:

• 5 years in prison (with 2 years to actually be served behind bars)
• A fine of €600,000

How did he do it? Between May and August 2024, he used knowledge from his former position to change the settings that control how many tokens could be created. He then minted 1 billion new HLG coins and moved them to his own crypto wallet (a digital account that stores cryptocurrency). With help from two accomplices, he spread the stolen tokens across accounts on crypto exchanges (online platforms where people buy and sell digital coins).

The accomplices were also found guilty:

• One received 2 years in prison (14 months suspended) plus an €80,000 fine
• The other got 2 years suspended and a €40,000 fine

All three must jointly pay about €1.26 million in compensation to the company.

An important detail: The judges refused to make them pay for the drop in the token's price. After the attack, HLG's value crashed by about 80%. But the court noted the price was already falling before the theft, so they couldn't directly blame the fraud for the loss.

The bigger fallout: The company's lawyer said Holograph has basically stopped operating because customers lost trust, and the firm is now preparing to shut down completely.

This case is a stark reminder that insider attacks can destroy an entire company, not just steal money.

This is an AI-generated summary. Read the original article at: https://forklog.com/news/byvshij-sotrudnik-holograph-poluchil-pyat-let-tyurmy-za-krazhu-1-mlrd-tokenov-hlg