Crypto.com Drama: Employee Charged in $47K Extortion Plot

Jose Luis Alonso Melchor was recently arraigned in a Malta court, facing allegations of threatening to disclose sensitive information unless he received €44,000 ($47,666) in compensation following his termination from the Singapore-based crypto exchange Crypto.com.

Melchor, who held a position granting access to confidential data, allegedly violated an attachment order and unlawfully accessed company information. He is now facing multiple charges, including extortion, money laundering, unauthorized use of computer equipment, and unauthorized disclosure of sensitive data. Due to concerns about flight risk, a freezing order of €2 million ($2.2 million) has been imposed on him.

Crypto.com promptly reported Melchor’s actions to the authorities upon discovery, leading to his immediate termination. The company is cooperating fully with law enforcement and has refrained from further comments as the legal proceedings are ongoing.

This incident adds to Crypto.com’s regulatory challenges. Previously, the company, under its Maltese registration, was fined €2.85 million ($3.1 million) by the Dutch Central Bank for failing to comply with money laundering laws.

The case of Jose Luis Alonso Melchor highlights the risks and regulatory scrutiny facing crypto exchanges like Crypto.com. As the legal proceedings unfold, the company’s swift action in reporting the alleged blackmail and their cooperation with law enforcement demonstrate their commitment to maintaining security and compliance in the cryptocurrency industry. This incident serves as a reminder of the importance of stringent regulatory adherence and the potential consequences of violating such standards.