Founder of Kishu Inu Cryptocurrency Indicted for Fraud

A co-founder of the cryptocurrency Kishu Inu has been indicted in Chicago on federal charges, with allegations that he and his partners defrauded investors of nearly $10 million through a so-called “rug pull” scheme. They reportedly used public statements and advertising to inflate market prices, while covertly selling off coins that had been secretly allocated to them.

Alexander Sisemore, a 28-year-old from Fayetteville, Arkansas, faces three counts of wire fraud according to a 13-page indictment released in U.S. District Court on Wednesday. He is expected to surrender to authorities and make an arraignment appearance soon, as indicated by the U.S. attorney’s office.

His attorney, Nishay Sanan, expressed skepticism about the government’s ability to substantiate the charges, noting that Sisemore is eager to “fight the case in court.”

The indictment reveals that Sisemore, who is also referred to as “Kishu Man,” and several unnamed associates launched Kishu Inu in April 2021. The cryptocurrency gained rapid popularity, achieving a market capitalization of over $1.6 billion shortly after its introduction. Within a month, it drew in roughly 283,000 holders, as per the indictment.

Kishu Inu founders aggressively promoted their venture, targeting investors through its website, billboards in Times Square, social media, and messaging platforms like Telegram, as mentioned in court records and prior statements from the FBI.

In May 2021, just a month post-launch, the Kishu Inu website encouraged investors to “Join the moon mission,” implying that the cryptocurrency’s price would skyrocket, according to the indictment.

Additionally, the founders consistently assured the public of Kishu Inu’s stability through various statements. A white paper circulating on the Reddit community claimed that “Kishu Inu was fair-launched, and the dev team has no ‘team tokens’,” suggesting that the creators had to purchase $KISHU on the open market. Other iterations of the white paper stated it was “a community-owned project with no tokens reserved for the team.”

This had fostered a perception that it functioned primarily on volunteer efforts and community donations, as asserted in the white paper.

However, the indictment alleges that Sisemore, an associate referred to as Individual A, and others discreetly moved 6% of the total Kishu Inu tokens to blockchain wallets under their control prior to the public sale. They subsequently sold those tokens, profiting by at least $9.8 million, according to the charges.

Despite the ongoing decline in Kishu Inu’s price, it continues to be traded on online markets. Notably, the cryptocurrency’s promoters recently celebrated its five-year anniversary, sharing a statement on its X account that reflected on the “beautiful journey that has brought us all together.”

The statement emphasized, “As we reflect on the past five years, let’s not just celebrate what we’ve achieved, let’s look forward to the incredible possibilities that lie ahead.” They encouraged a collective efforts to break barriers and inspire change for a more hopeful future.

Just three days after the anniversary post, the FBI Chicago issued a statement on its website asking for information from Kishu Inu investors who might have fallen victim to a scheme involving stolen assets.

The FBI noted, “The stolen cryptocurrency was gradually sold, taking advantage of the robust market for Kishu Inu throughout 2021,” and encouraged anyone with relevant information to fill out an online form.

Federal prosecutors are also seeking to seize any profits from the sale, along with two cryptocurrency wallets connected to Sisemore, as outlined in the indictment.