“A community-owned project with no tokens reserved for the team. Therefore, it runs primarily on volunteers and donations from the community.”
Authorities describe the alleged conduct as a rug pull, a scheme in which developers attract buyers, then extract value through deceptive sales or withdrawals.
Prosecutors Allege Hidden Allocations and Concealed Sales
Before public sales, another founder allegedly transferred 6% of the supply to four wallets controlled by Sisemore and another 6% to his own wallets. Prosecutors contend that the alleged secret token allocations contradict representations that developers held only 1.7% of available tokens and had purchased their holdings.
The charging document places the scheme between April 2021 and at least October 2023, alleging that false statements supported prices and liquidity, the ability to buy or sell without sharply moving the price. Those assurances circulated on websites, project documents, and Telegram, Twitter, Facebook, and Reddit.
Sisemore and the other founder allegedly concealed sales of their token holdings through multiple wallets and crypto mixers, services that obscure transfer trails. The other founder allegedly earned approximately $800,000. The indictment identifies three trades through the Gate.io exchange and seeks forfeiture of proceeds if Sisemore is convicted.
FBI Seeks Investors as Creator Faces Three Federal Counts
The Oct. 6 indictment charges Sisemore with three counts of wire fraud, each punishable by up to 20 years in prison. Any sentence would depend on federal law and sentencing guidelines.
Other cryptocurrency prosecutions have examined similar representations about insider ownership, including Safemoon’s 2023 fraud charges. Those allegations concerned access to purportedly locked trading funds and undisclosed dealings by developers.
Former Safemoon chief technology officer Thomas Smith subsequently pleaded guilty to fraud conspiracies in February 2025.
A separate jury convicted Block Bits co-founder Japheth Dillman in August. That operation raised approximately $960,000 using claims about an automated trading system that did not work.
Investigators are seeking Kishu Inu purchasers and others with information relevant to the allegations through the FBI’s effort to identify potential victims using a voluntary questionnaire. Responses may assist the inquiry and establish who was affected.