Xaviar Babudar, a 28-year-old former financial analyst accused of orchestrating an $8 million cryptocurrency fraud, is nearing a potential plea deal with federal prosecutors in Manhattan. Babudar, known online as “SavyLoon,” allegedly lured investors into his crypto fund, Camp Kaway, by misrepresenting himself as a successful trader, primarily through Twitter.

The investigation, which led to Babudar’s arrest in March 2023 on wire fraud charges, revealed that he used investor funds for personal expenses, including luxury stays, artwork, and non-fungible tokens (NFTs). Initially, Babudar maintained his innocence and engaged with observers on social media, but recent court filings indicate a shift in his legal strategy, with negotiations underway for a possible guilty plea.

Prosecutors have been building a case against Babudar, tracing cryptocurrency transactions and presenting evidence that he internally referred to his scheme as a “Ponzi scheme,” despite publicly promoting Camp Kaway as legitimate. Authorities have seized NFTs and artwork linked to Babudar, planning to liquidate these assets to compensate victims.

The case has raised concerns about the risks of unregulated cryptocurrency investments and the need for due diligence. Many of Babudar’s victims, primarily young individuals drawn in by his social media presence and promises of high returns, have reported feelings of betrayal and financial hardship. The SEC is also scrutinizing Babudar’s activities for potential securities law violations.

As plea negotiations progress, the outcome remains uncertain, including the potential sentence and the extent to which investors will recover their losses. The case serves as a warning within the cryptocurrency community, highlighting the need for regulatory oversight in this evolving financial landscape. Further court dates are scheduled, with a resolution anticipated in the coming months.