A former compliance officer at Crypto.com — registered in Malta as Foris Dax MT limited — has been charged with extortion and money laundering after he allegedly threatened to expose sensitive information while demanding compensation from the company. 

Thirty-three-year-old Jose Luis Alonso Melchor was arraigned by magistrate Nadia Vella in a Malta court on Thursday following his arrest and termination from the Singapore-based crypto exchange. 

According to Malta Today, Melchor was fired after Crypto.com discovered he had broken an attachment order. Melchor then allegedly obtained sensitive information from the firm through his compliance officer role and threatened to publish it.

He allegedly told his employer that he wanted €44,000 ($47,666) in compensation for his job loss.

Melchor faces nine charges, including money laundering, extortion in his capacity as a public servant, extorting money by threatening to defame a third party, unauthorized use of his employer’s computer equipment, and the taking, tampering, and disclosing of sensitive data.

A €2 million ($2.2 million) freezing order was upheld against Melchor and his bail requests were denied as the magistrate deemed him a flight risk.

Crypto.com told Protos, “The employee in question was reported to the authorities immediately upon discovery of his actions, and his employment was terminated.

“We continue to cooperate fully with law enforcement and have no further comment as the matter is pending litigation.”

Read more: Scoop: EU officials suspect Binance is faking accounts in Ireland and Malta

It’s unclear what Melchor’s attachment order relates to, but it can involve a judge seizing a defendant’s assets to ensure any potential monetary damages can be paid in full.

Crypto.com, under its Malta registration, was fined €2.85 million ($3.1 million) in March this year by the Dutch Central Bank. Crypto.com had failed to register in the country for two years, breaking money laundering and terrorism financing laws.

The exchange was also made to delist USDT pairs in compliance with Canada’s Ontario Securities Commission regulations in January 2023.

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US federal authorities are assisting Maltese police in building a case against businessman Luke Milton, accused of stealing up to $700,000 worth in cryptocurrency from a Maltese victim.

Authorities believe Milton, currently out on bail on unrelated charges of kidnapping, convinced a man over lunch to hand over his phone to help them invest in crypto. Instead, he allegedly transferred the man’s tokens into his own wallet.

Milton has since been arrested. Malta’s police force confiscated his phone and sent it to US federal authorities to make use of their expertise and technical equipment in order to access the wallet. This isn’t the first time the US has assisted the island nation in police investigations — the murder of Daphne Galizia required their technical skills, as well.

Milton has deep ties with Christian Borg, well-known in Maltese media due to his business dealings with current prime minister Robert Abela. Milton represented car-leasing and sale company No Deposit Cars, owned by Borg, and owns several car-leasing companies himself.

• Milton and Borg amassed millions of euros in unexplained wealth in their early twenties.
• Both are accused of laundering their illicit gains into car-leasing companies.
• No Deposit Cars has recently been sued by customers who allege fraud and theft.

Read more: Malta lawyer investigated over bitcoin sent to alleged murderer of Daphne Galizia

Before he was prime minister, Abela purchased a plot of land that received development permits for a block of apartments under Borg’s name, while Abela still owned the land. Eventually, he sold it to Borg and netted a profit of €45,000 ($50,000).

The Maltese government and the Labour Party have also been accused of covering up for Borg and his business associates. Former Labour Party employee Joseph Camenzuli was appointed director of No Deposit Cars when Borg gave up the role due to current legal problems. Recently, a government-awarded tender to No Deposit Cars to chauffeur the judiciary was also rejected by the courts.

Both Milton and Borg are currently out on bail.

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