In a bombshell development in the ongoing FTX bankruptcy saga, a damning new lawsuit filed by the embattled exchange accuses an enigmatic crypto whale known as “Humpy” of masterminding an audacious series of market manipulation schemes that cost FTX and its trading arm Alameda Research an eye-watering $1 billion.
The explosive 32-page filing, submitted to the U.S. Bankruptcy Court in Delaware, alleges that Mauritius national Navaaz Mohammad Meerun, operating under the alias “Humpy the Whale,” engaged in a brazen campaign of fraud and manipulation between January 2021 and September 2022, exploiting loopholes in FTX’s margin trading rules to siphon off hundreds of millions in ill-gotten gains.
But the lawsuit’s most shocking revelations center on Humpy’s alleged ties to the dark underbelly of global organized crime. According to the filing, Humpy leveraged his immense crypto wealth to bankroll a dizzying array of criminal enterprises, from Eastern European human trafficking rings to Islamic extremist networks involved in financing terrorism.
The Anatomy of a Billion-Dollar Heist
The lawsuit meticulously chronicles Humpy’s alleged misdeeds, painting a portrait of a criminal mastermind who weaponized his mastery of crypto markets to carry out some of the most audacious financial heists in modern history.
The BTMX Blitz
Humpy’s opening gambit was as cunning as it was lucrative. In January 2021, he quietly began amassing a gargantuan position in BTMX, an obscure, highly illiquid token, ultimately cornering almost half the entire supply. Humpy then allegedly colluded to artificially pump BTMX’s price by an astonishing 10,000% in just three months.
With BTMX’s value grossly inflated, Humpy pounced, exploiting a loophole in FTX’s margin trading rules to borrow tens of millions against his BTMX holdings as collateral. According to the filing, Humpy had no intention of playing by the rules or repaying the loans. Once his manipulations ceased and BTMX inevitably crashed back to earth, Humpy absconded with over $450 million in crypto, leaving FTX holding the bag.
The MOB Sting
Simultaneously, Humpy was allegedly orchestrating a daring short squeeze targeting MOB, another thinly traded token. After amassing a huge short position that Alameda was forced to take the other side of, Humpy watched gleefully as FTX’s frantic attempts to cover the position catapulted MOB’s price 750% in a single week.
By the time the dust settled on the BTMX/MOB fiasco in August 2021, Alameda’s losses from Humpy’s machinations had soared to a staggering $1 billion, according to internal calculations referenced in the complaint.
The Sequel Spree
Emboldened by his billion-dollar booty, Humpy allegedly embarked on a fresh spree of manipulation in August 2021, deploying the same playbook against the BAO, TOMO, and SXP tokens to extract another $200 million from FTX before his racket was finally detected and shut down.
The DAO Attack
Not content with his ill-gotten billions, Humpy set his sights on a new mark in early 2022: Compound Finance, a decentralized lending protocol governed by a DAO (decentralized autonomous organization).
Humpy weaponized Compound’s COMP governance token to launch a brazen “governance attack,” attempting to drain over $20 million in user funds into his own wallets. When the heist was thwarted, Humpy allegedly strong-armed Compound into a “peace deal” that funneled additional payouts his way.
The Criminal Nexus
But it’s the lawsuit’s jaw-dropping allegations around Humpy’s ties to the darkest corners of the criminal underworld that have sent shockwaves through the crypto space.
According to the filing, FTX’s investigations uncovered Humpy’s “extensive connections to Polish, Romanian, and Ukrainian organized crime networks, including groups involved in human trafficking, as well as Islamic extremist networks tied to terrorism financing.”
The complaint asserts that Humpy funneled his immense crypto profits to bankroll a globe-spanning web of criminal enterprises, with tentacles reaching from Eastern European sex trafficking rings to Middle Eastern jihadist groups.
The staggering scope of Humpy’s alleged criminal ties, and the vast sums involved, have raised urgent questions about the vulnerability of crypto markets to manipulation by bad actors, and the potential for digital assets to be weaponized by terrorists and organized crime.
As the crypto community reels from these bombshell revelations, all eyes now turn to the Delaware court, where the battle to unravel Humpy’s tangled web of alleged crimes and bring the shadowy whale to justice has only just begun. The outcome could have far-reaching implications not only for FTX and its creditors, but for the future of crypto regulation and the fight against the illicit use of digital assets.
Only one thing is certain: Humpy’s unmasking has opened a Pandora’s box of scandal and intrigue that is sure to keep the crypto world enthralled as new shocks and twists continue to emerge.
