A founder of the cryptocurrency Kishu Inu has been indicted in Chicago on federal charges alleging he and his associates bilked investors of approximately $10 million through a “rug pull” scheme that used public statements and ads to drive up market prices while selling off coins they had secretly distributed to themselves.
Alexander Sisemore, 28, of Fayetteville, Arkansas, was charged in a 13-page indictment made public in U.S. District Court on Wednesday with three counts of wire fraud. Sisemore was expected to self-surrender to authorities and appear for an arraignment at a later date, according to the U.S. attorney’s office.
His lawyer, Nishay Sanan, said Wednesday he did not believe the government would be able to prove what was charged in the indictment, and that Sisemore looked forward to “fighting the case in court.”
According to the charges, Sisemore, also known as “Kishu Man,” and several unnamed associates founded the cryptocurrency in April 2021 and it quickly reached a market capitalization of more than $1.6 billion. Shortly after its launch, Kishu Inu — which used a Japanese Kishu breed dog as its mascot and was modeled after the popular cryptocurrency dogecoin — had about 283,000 holders, the indictment stated.
The founders aggressively marketed Kishu Inu by seeking investors on its website, billboards in New York’s Times Square and other locations, on social media and in messaging apps such as Telegram, according to court records and a statement earlier this year from the FBI.
In May 2021, a month after the launch, Kishu Inu’s website “encouraged investors to ‘Join the moon mission,’ suggesting that Kishu Inu’s price would continue to appreciate to the ‘moon,'” the indictment stated.
Meanwhile, the founders repeatedly vouched for Kishu Inu’s stability in public statements. In the online community Reddit, a white paper from kishu.com was widely circulated that stated “Kishu Inu was fair-launched, and the dev team has no ‘team tokens’. In other words, our creators had to purchase $KISHU on the open-market,” the indictment stated. Other versions of the white paper allegedly stated Kishu Inu was “a community-owned project with no tokens reserved for the team.”
“Therefore, it runs primarily on volunteers and donations from the community,” the white paper stated, according to the indictment.
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In reality, Sisemore, an associate identified as Individual A, and others had secretly transferred 6% of the total Kishu Inu tokens to blockchain wallets under their control before being offered for sale to the public, the indictment stated. They then secretly sold off those coins, generating personal profits of at least $9.8 million, according to the charges.
While the price of Kishu Inu coins has continued to drop, it is still traded in online markets. In fact, the cryptocurrency’s promoters recently celebrated its five-year anniversary, publishing a statement on its X account on April 17 reflecting on the “beautiful journey that has brought us all together.”
“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,” the message said. “Together, we can continue to break barriers, inspire change, and create a brighter future for ourselves and for generations to come.”
Three days after that post, the FBI Chicago posted a statement on its website seeking to identify investors in Kishu Inu who “may be victims of a scheme where investors’ assets may have been stolen.”
“The stolen cryptocurrency was gradually sold, taking advantage of the robust market for Kishu Inu throughout 2021,” the FBI said, asking anyone with information to fill out a form online.
As part of the indictment, federal prosecutors are seeking to seize any proceeds from the sale as well as two cryptocurrency wallets tied to Sisemore, records show.