NFT startup founder charged with misusing funds from $10 million fundraising

NFT startup founder charged with misusing funds from $10 million fundraisingFederal prosecutors say Taj Tarsha misled backers and used investor funds for personal expenses.The U.S. alleges Taj Tarsha defrauded investors of more than $10 million. (Jesse Hamilton/CoinDesk)U.S. prosecutors charged Few and Far founder Taj Tarsha with securities and wire fraud tied to a $10 million fundraising.The authorities say investor funds meant to build an NFT marketplace were diverted to gambling, crypto trades and personal expenses.An internal audit uncovered the alleged misconduct in June 2023. The FAR token debuted in May 2024 but soon became effectively worthless and stopped trading, prosecutors said.Federal prosecutors in Manhattan charged the founder of non-fungible token (NFT) startup Few and Far with securities fraud and wire fraud.The prosecutors alleged that Taj Tarsha diverted more than $10 million raised from investors into online gambling, cryptocurrency speculation and personal expenses instead of building the company's marketplace.The 34-year-old raised the funds from at least 67 investors beginning in February 2022 through Simple Agreements for Future Tokens (SAFTs), the U.S. Attorney's Office for the Southern District of New York said in a statement. SAFTs give a project’s financial backers the right to receive tokens once they are available. Few and Far’s investors had the right to receive 95 million FAR tokens while funding development of the company’s planned decentralized NFT marketplace.The prosecutors allege Tarsha began misappropriating investor funds almost immediately after the fundraising closed.The alleged misconduct was uncovered in a June 2023 audit, according to the statement. Prosecutors claim Tarsha falsely told investors that bonuses he received were tied to token presale milestones and that company funds were being used to advance the project.Instead, the indictment alleges, he had dismissed most employees while directing one contractor to create the appearance that the marketplace appeared functional.The government also alleged Tarsha spent investor funds on a loan for a Miami condominium, interior design services and expenses tied to his DJ hobby. Few and Far launched the FAR token in May 2024, but prosecutors said it quickly became effectively worthless and soon stopped trading.Tarsha, of Miami, was arrested on June 6, and the case has been assigned to U.S. District Judge Lewis A. Kaplan. Each charge carries a maximum sentence of 20 years in prison if convicted.CoinDesk tried to contact Tarsha by email outside of U.S. working hours, and had not received a response by publication time.AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.12345678910The Evolution of the Crypto CEX Landscape: A Case Study on BinanceThe Evolution of the Crypto CEX Landscape: A Case Study on BinanceBinance remains crypto’s leading exchange, expanding from spot and derivatives into RWAs, payments, savings, yield, and broader financial services.Binance remains crypto’s leading exchange, expanding from spot and derivatives into RWAs, payments, savings, yield, and broader financial services.Why it matters:Binance remains crypto’s leading exchange, expanding from spot and derivatives into RWAs, payments, savings, yield, and broader financial services.View Full Report