Bitcoin startup DigitalX founder Tsvetnenko resigns from board amid fraud charges

Rage Review : Zhenya Tsvetnenko, former executive chairman of DigitalX, an Australian digital currency company that went public last week, was accused of being involved in a fraudulent SMS conspiracy, sending SMS messages to consumers to register without their consent, and making profits by deducting monthly fees. If convicted, he will face 40 years in prison. Three days after the US prosecutor announced the charge, Tsvetnenko resigned as executive director of DigitalX.

Translation: Nicole

The former executive chairman of publicly traded Australian digital currency company DigitalX has been charged by the U.S. government with involvement in a fraudulent text message scheme.

Zhenya Tsvetnenko was one of three parties served with an indictment in the U.S. District Court for the Southern District of New York last week. Tsvetnenko co-founded DigitalX, which was originally a bitcoin mining company called DigitalBTC before launching the Air Pocket payment app.

Zhenya Tsvetnenko

U.S. prosecutors allege that Tsvetnenko and other defendants in the case were involved in a conspiracy to send text messages to consumers to sign up for services without their consent, profiting from the transactions by charging monthly fees.

According to the indictment, thousands of phone users claimed to have signed up for the scheme, and prosecutors further allege that those involved pocketed tens of millions of dollars.

According to court documents, Tsvetnenko was charged with wire fraud and conspiracy to commit wire fraud and mail fraud, and if convicted, he faces up to 40 years in prison.

According to Australian news reports, Tsvetnenko has denied the charges and is fighting extradition to the United States.

Three days after U.S. prosecutors announced the charges, Tsvetnenko resigned from his position as executive director of DigitalX, according to a July 25 statement. DigitalX did not immediately respond to a request for comment.