Category Archives: Scam

Auto Added by WPeMatico

SEC Slaps ICO Scammer with $30,000 Fine

David T Laurance has been issued a USD 30,000 penalty from the US Securities and Exchange Commission (SEC) due to his connection with a fraudulent initial coin offering (ICO). He has also been barred from holding officer and director positions, or from trading in and owning penny stocks.

Laurance was the president and CEO of oil drilling company Tomahawk Exploration LLC, with whom he has been employed for eight years. Last year, he launched the ICO for the company’s new token, Tomahawkcoins, saying the funds raised would be used for oil exploration and drilling in California.

The SEC claims that the ICO provided false information during its promotion, including advertising inflated oil production projections and falsely claiming Tomahawk already held drilling permits for the sites in California. Additionally, Laurance was portrayed as an individual with a flawless background, when according to the SEC, he has been found guilty of involvement in deceitful security offerings prior to this conviction.

The ICO failed to raise the USD 5 million as planned but a bounty program was set up by the company to trade Tomahawkcoins for online promotional services. Laurance and Tomahawk have been issued cease and desist orders, while they chose to neither accept or deny the legitimacy of the claims.

The SEC used the opportunity to reissue a warning of scammers working with similar operations, with a press release for the case telling people to be wary of offers with unusually high returns on investment. A useful search tool provided by the SEC is Investor.gov that lists details of a variety of investment professionals.

Despite Laurance’s charges, a recent study indicates that ICOs account for under 2% of securities class action lawsuits. While any number is too high, it is at least beneficial for the industry that this number can be identified and made to face justice.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Courtesy: Pixabay

The post SEC Slaps ICO Scammer with $30,000 Fine appeared first on BitcoinNews.com.

Vietnamese Crypto Mining Farm Found Abandoned, Investors Missing $35M

The CEO of Vietnam-based cryptocurrency mining farm Sky Mining has reportedly absconded, leaving investors USD 35 million short.

Investors found an abandoned premises

The Sky Mining business structure offered people the chance to buy shares in the cryptocurrency mining hardware and collect a percentage of the profits. It advertised these profits at 300% in one year for a one-time payment between USD 100 and USD 5,000, as well as private use of a mining device for 15 to 18 months.

When the investors were told they may pick up their mining equipment from the business’s registered location, they instead found empty, closed premises. Upon further investigation, Sky Mining’s Phu Nhuan District office was also found abandoned.

CEO, Le Minh Tam, has been AWOL since Thursday; 5,000 investors are faced with losing an estimated total of USD 35 million.

No good news for investors

Local media outlet Thanh Nien published a letter reportedly from Tam who claimed his mining venture was no longer profitable and he was forced to sell the equipment to cover his losses, then run in fear for his life. In a new addition to the saga, Saturday he posted a Telegram chat video where he claimed he would return and restore the business to profitability.

Deputy chairman of Sky Mining Le Minh Hieu attempted to control the chaos by forming a board of 16 participants but was forced to disperse the group when he and his family became subject to death threats from angry investors. Hieu said that he too was a victim of Tam’s scam and has reported the threats to the police.

He said that he assumed Tam had retreated to the US with the investors’ money, noting that Tam most likely succeeded in his endeavor because he was responsible for directly managing the goings on of the mining equipment.

As of Monday, 20 investors have signed a joint complaint with the police department, with one investor taking her complaint to court after allegedly loosing approximately USD 269,000. Unfortunately, Vo Do Thang, Director of the Athena Network Security Training Center told VNexpress they had next to no chance of seeing their money returned.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Courtesy: Pixabay

The post Vietnamese Crypto Mining Farm Found Abandoned, Investors Missing $35M appeared first on BitcoinNews.com.

Kodak-Branded Bitcoin Mining Scheme Collapses Amid Scam Rumors

A Bitcoin mining scheme working under the Kodak brand has ceased operations, while Kodak has told the BBC it never officially licensed the project.

The Kodak KashMiner was launched in January this year and featured on the official Kodak stand during the CES technology show in Las Vegas. Critics accused the scheme of advertising unachievable profits and misleading information from the start, labeling the venture a scam.

Project history

Spotlite USA is the company behind the KashMiner and is one of several companies that are legally licensed to use the Kodak brand on its own products.

The business plan offered in January detailed a scheme that would allow people to rent the machines at an upfront fee of approximately USD 3,400, with the miners allowed to keep the Bitcoins they were rewarded.

During this time, Spotlite’s chief executive Halston Mikail claimed 80 devices were already in functional operation, with future plans to install hundreds of hardware units at the official Kodak headquarters in New York that benefits from its own on-site power plant.

However, a spokesperson for Kodak informed the BBC that not only had this not occurred in the New York office, but Kodak had never officially licensed the KashMiner specifically.

Mikail confirmed that the US Securities and Exchange Commission was responsible for canceling the operation and said instead that Spotlite would use the equipment at a private mining farm in Iceland.

Problematic promises

After paying the upfront costs to rent the hardware, Spotlite advertised monthly earnings of USD 375 months for the following two years. Those familiar with the logistics of Bitcoin mining found this figure to be problematic.

Accusations against Spotlite claimed that its internal analysis did not take into account the increasing difficulty of the mining process. Economist Saifedean Ammous was among the vocal skeptics, who pointed out there was no way the KashMiner could produce exactly USD 375 each month.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Courtesy: Pixabay

The post Kodak-Branded Bitcoin Mining Scheme Collapses Amid Scam Rumors appeared first on BitcoinNews.com.

YouTube Being Sued for BitConnect Negligence

BitConnect was a high-yield cryptocurrency investment ponzi scheme that collapsed in January 2018, and now YouTube is being sued for alleged negligence in propagating BitConnect content. Apparently, YouTube published over 70,000 hours of unedited BitConnect connect, generating 58 million views, possibly resulting in hundreds of thousands of victims.

The founder of the Silver Miller law firm which has launched the class action Bitconnect lawsuit, David Silver, says, “The platform allowed BitConnect to reach hundreds of thousands of potential investors, all while YouTube was aware that BitConnect was a scam. As the old saying goes: Sometimes when you lie down with dogs, you get fleas.”

BitConnect promised daily interest earnings for cryptocurrency invested on their site, up to 40% per month, with an additional interest rate of 0.25% daily for people that invested over USD 10,000. BitConnect had a native cryptocurrency, BCC, that had a market cap of USD 2.5 billion at the peak of the scheme.

BitConnect announced that it was closing up due to negative reports by the media and said it would repay all loans with BCC. They did this maliciously, since they waited to repay loans until after the announcement. In January 2018 BCC lost over 99% of its value, as victims scrambled to sell their coins, and BitConnect was able to repay all loans for a miniscule fraction of the real loan value. BCC is effectively dead at this point with daily trading volume of USD 100. This might be the most catastrophic and complete collapse of a cryptocurrency in history, having gone from a market cap of USD 2.5 billion to virtual death in less than six months.

The BitConnect scandal may be part of the reason that YouTube’s parent company, Google, banned all cryptocurrency advertisements. However, this ban does not affect content being posted on YouTube.

It remains up to the court to decide if YouTube is actually responsible for people being victimized by content in videos posted on their platform. A tremendous amount of videos are posted on YouTube every day, and it would be quite difficult for YouTube to look through all the videos and delete ones related to cryptocurrency scams. Additionally, it can be argued that people need to be responsible for their own investment decisions.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Courtesy: Pixabay

The post YouTube Being Sued for BitConnect Negligence appeared first on BitcoinNews.com.

Hackers Collect $20 Million in Ether from 3-Yr Old Geth Flaw

Hackers have stolen more than ETH 38,000 worth over USD 20 million in a single wallet by exploiting a vulnerability in the Geth Ethereum client, despite a warning three years ago from the developers of Ethereum about this specific exploit. There was an additional warning in March 2018 that hackers had successfully stolen ETH 4 with this method. These warnings apparently did not result in a fix.

The flaw lies in the JSON-RPC protocol of the Geth client, which is used to send Ether from a wallet that has been unlocked. This is useful for creating programs that interact with the Ethereum wallet. By default, the Remote Call Protocol (RPC) is disabled, and if it is enabled it is usually only available to the same computer which is running the Ethereum client.

However, it is possible to configure the RPC so that any computer on the internet can query the Ethereum wallet, which allows any computer on the internet to withdraw funds. Anyone that knows your wallet address and IP address can steal your Ethereum if your RPC is configured in this way.

The hackers simply scanned the internet for Geth clients that had JSON-RPC port 8545 open, and withdrew funds to their wallet whenever they found one.

This is probably being done with an automatic script, as Ethereum accounts are actively being robbed today based on the transaction history of the hacker’s wallet. There are over 5,000 transactions in the hacker’s Ethereum wallet, dating as far back as 2016. Comments on the address on Etherscan.io suggest that many users have fallen victim.

It is unknown how widespread the hacking is, since this is just one wallet address, and there could be many more addresses that hackers use to siphon off funds by exploiting the Geth client’s JSON-RPC vulnerability.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

The post Hackers Collect $20 Million in Ether from 3-Yr Old Geth Flaw appeared first on BitcoinNews.com.

Belgium’s ‘Too Good to Be True’ Website Warns Investors About Crypto Scams

The Belgian Federal Public Service Economy and Financial Services & Market Authority have teamed up to create a website named ‘Too Good To Be True’ to warn investors about cryptocurrency scams, in order to protect its citizens amid a rising tide of scams as the popularity of cryptocurrency climbs.

There is a warning on the website that anyone can create a cryptocurrency, and that some people create cryptocurrencies for drug trafficking, scams, and terrorism. In reality, it is rare that an actual cryptocurrency is created solely for criminal purposes, but it is not out of the realm of possibility.

The real threat the website warns about is investment scams, where companies offer big profits and then run away with the invested coins. That’s where the name of the site is derived from: if an investment scheme seems too good to be true, it should be avoided, since it probably isn’t true.

In general, the website recommends never sharing personal information to avoid identity theft, to know who you are dealing with and get clear and understandable information from them, and to be wary of promises of high profits. Even though cryptocurrency prices have gone up tremendously in the long term, no honest person would ever guarantee profits since the markets are volatile.

The website has an integrated tool where the legitimacy of cryptocurrency websites can be verified, but the developers say they are not responsible for any errors. It would take an entire task force to verify the trustworthiness of every cryptocurrency website, so it seems unlikely that this tool is 100% accurate. In order to operate in Belgium, a cryptocurrency company must have a license, so any company that does not have a license would be considered fraudulent by this checking tool even if the rest of the world considers the company legitimate.

There is a section of the website which archives real-life stories about cryptocurrency fraud, and users of the site can submit their own stories. Stories range from getting involved in pyramid schemes, purchasing mining equipment that never showed up, fraudulent cryptocurrency exchanges, cryptocurrency wallets being hacked, and being scammed when purchasing cryptocurrency.

The ‘Too Good To Be True’ website will help educate citizens of Belgium about cryptocurrency crime, hopefully resulting in fewer victims and a healthier cryptocurrency ecosystem.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

The post Belgium’s ‘Too Good to Be True’ Website Warns Investors About Crypto Scams appeared first on BitcoinNews.com.

Apprentice’s Alan Sugar Warns of “Ruthless” Crypto Scammers and Fake News

Alan Sugar, British Entrepreneur, and presenter of TV’s ‘The Apprentice’, talking to the UK’s Mail on Sunday, has said that scam cryptocurrency deals targeting celebrities is becoming a routine for many prominent business people, according to This is Money.

The 74-year-old billionaire and founder of computer electronics company Amstrad became Britain’s answer to Donald Trump who presented the original US Apprentice series before becoming US President.

According to This is Money, fake news is on the rise with bogus celebrity endorsements fooling investors into investing in fake cryptocurrency projects.

Sugar joins an ever-expanding list of wealthy entrepreneurs whose names have been used in the promotion of cryptocurrency scams. Others who have suffered damage to their reputations due to crypto crime including Bill Gates, Richard Branston, Deborah Meaden and money saving expert Martin Lewis.

He commented about his recent experience when his name was used to sell scam crypto-currency deals:

‘These crooks are utterly ruthless. I just hope that people do their homework before parting with any money. It is infuriating to see my name and face on websites run by charlatans claiming I back their fraudulent investment scheme.”

Lord Sugar, who is currently working with his lawyers to get online ads featuring the entrepreneur removed, suggests that the perpetrators normally hide behind short-lived anonymous websites, making this type of crime difficult to tackle by lawmakers. He added that “there seems to be little that can be done about it because these cowardly crooks hide behind short-lived anonymous overseas websites.”

Action Fraud, The UK’s national fraud reporting center suggest such scams are increasing with 21 reports in March alone, costing victims £34,000 (USD $45,000). Mark Ward of Wealth manager Sanlam UK suggests that “people do not always know what they are buying. They mistakenly believe Richard Branson is saying it is good, so feel it is good enough for them. Others are buying for fear of missing out.”

There are many ways that investors can ensure safe trading and avoid scams, such as using a known exchange to transact and open a digital wallet, preferably a cold storage hard wallet making it difficult to hack via the internet. Investors can also refer to UK regulators ScamSmart website to learn how to avoid investment scams.

Another scam to be aware of is ‘wash trading’ where dubious traders give an impression of high demand for a coin by trading with themselves. Ward adds:

“It is still the Wild West. Investors are handing over banking details to companies based in parts of the world where there is no chance of getting their money back.”

Follow BitcoinNews.com on Twitter at @BitcoinNewsCom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Source: Pixabay

The post Apprentice’s Alan Sugar Warns of “Ruthless” Crypto Scammers and Fake News appeared first on BitcoinNews.com.

Over $1 Billion Crypto Stolen Worldwide in Last 18 Months as GDPR Activates

The Anti-Phishing Working Group (APWG) estimate that over $1 billion (US) in crypto has been stolen since the start of 2017, states Blockchain Security Company — CipherTrace. This recent surge has led to numerous global investigations, aiming to bring the criminals resposible to justice.

According to CityWire, the UK’s Financial Conduct Authority is reported to have opened 24 investigations into cryptocurrency businesses. The investigations, some of which are the result of several whistleblower reports focus on regulatory compliance, states CoinTelegraph while citing the responses to Freedom of Information requests

The FCA has not mentioned names but claims that the investigations have been initiated into the companies in order to, “determine whether they might be carrying on regulated activities that require FCA authorization”

The cleanup is not unusual. Globally, regulators have been particularly active over past months with a focus on user protection, as the FCA point out, with investigations largely identifying “risk to consumers.”

The US-Canada “Operation Cryptosweep” is another such investigation underway, as reported recently by BitcoinNews. The focus of the North American operation is to target fraudulent investment programs, which to date has revealed 35 activities, the North American Securities Administrators Association (NASAA) announced.

In Singapore, the Central Bank has issued warnings to eight exchanges regarding securities law infringements and has halted the activities of one ICO token issuer.

Blockchain security company Cipher Trace suggests that the EU’s new General Data Protection Regulation (GDPR), which has now been activated, could reduce cybercrime. Cipher Trace claims that the new regulations could support these types of investigations due to critical ICANN WHOIS information.

Internet WHOIS data is a new resource for investigators comprising the Internet’s database of record, containing the names, addresses and email addresses of those who register domain names for websites on the Internet. Cipher Trace suggests that this data will become a crucial factor in recovering stolen funds and identifying criminals for eventual prosecution.

WHOIS is a fundamental resource for investigators and law enforcement officials who work to prevent these thefts. The Internet’s database of record is crucial in performing investigations that allow for the recovery of stolen funds, identifying the persons involved, and providing vital information for law enforcement to arrest and prosecute these criminals.

In the last year, $700M has been reported stolen by cybercriminals, and hundreds of millions of more thefts go largely unreported, according to the blockchain security company,

Follow BitcoinNews.com on Twitter at @BitcoinNewsCom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Image Source: Pixabay

The post Over $1 Billion Crypto Stolen Worldwide in Last 18 Months as GDPR Activates appeared first on BitcoinNews.com.

Would-Be Dognapper Demands Bitcoin To Spare Life of Happy the Dog

A scammer claiming to be in possession of a dog texted the dog’s owner that he would “sell it or kill it or whatever” if he didn’t receive USD 600 of Bitcoin within five days. Upon payment, it was said that the texter would leave the dog, named Happy, at a pet store with the owner’s contact information.

The owner, Patricia Howell, had earlier posted on Facebook and Pawboost that her basset hound had gone missing. This is likely where the scammer got her contact information. The scammer claimed to use a burner phone, making him/her untraceable.

Much like a burner phone is an anonymous version of a cell phone, Bitcoin is the pseudo-anonymous version of currency. No identity or location information is required to transact Bitcoin, only a Bitcoin address which consists of a long string of letters and numbers. This is unlike most other payment methods like Western Union and banks which can’t be used without providing identifying information. The scammer, in this case, chose Bitcoin.

Fortunately, Howell had already recovered her dog minutes before receiving the texts from the scammer, thanks to a tip on a community Facebook page. Due to the timing, she didn’t have to worry if there was any truth to the texts, but was upset about the scammer’s cold, and mean-spirited demand. Her outrage prompted her to report the incident to her local police department.

The Granville County sheriff is investigating this incident, and says he’s aware of similar cases across the county but this is the first official police report he’s had involving a Bitcoin ransom. Indeed, just this past week another Bitcoin ransom made headlines when 15 Bitcoins were demanded for the return of a kidnapped South African boy.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

The post Would-Be Dognapper Demands Bitcoin To Spare Life of Happy the Dog appeared first on BitcoinNews.com.

China Arrests 98, Recovers Record $266M from OneCoin Ponzi

The Zhuzhou County Procuratorate in Hunan Province, China has arrested and prosecuted 98 people associated with the OneCoin cryptocurrency pyramid scheme, and has recovered CNY 1.7 billion (approximately USD 266 million at time of writing) in the process. This is the largest number of people involved in an investigation and the largest amount of economic loss recovered by the agency.

OneCoin is a global pyramid scheme based out of Copenhagen, Denmark. In China it is called Weika Coin. OneCoin generated huge outflows of capital from 20 different Chinese provinces, with 2 million registered accounts in China. Investors in China collectively put over CNY 15 billion into the scheme. Most of this money exited China and went to people in foreign countries at the top of the pyramid scheme, seriously endangering national financial security and stability.

The OneCoin organization claimed that it was a second generation of cryptocurrency after Bitcoin and already had a huge following, and promised tremendous returns for investors. It was impossible to view the inner-workings of OneCoin without buying a non-refundable starter package, the least expensive of which cost EUR 130 and the most expensive a whopping EUR 36,330.

When purchasing OneCoin a user receives tokens that have no value, and they can submit these tokens for “mining” where the tokens eventually become OneCoins. This isn’t true cryptocurrency mining where a user is rewarded for putting their computing power towards maintaining and securing the network. There is no evidence that OneCoin ever had a blockchain to maintain and secure, and the inner-workings of the “mining” process were secretive.

If a user received OneCoin from “mining” – itself no guarantee – these could be traded for EUR on a private exchange on the website up until January 2017 when the exchange shut down without notice. Once the exchange shut down, there was no way to recover any money since it was exchanged nowhere else, unravelling the scam.

OneCoin was a classic pyramid scheme where users would get other people to invest and receive EUR referral rewards for doing so. These rewards were paid from other investments, so OneCoin did not have enough money to cover all of its balances. There were also strict selling limits for OneCoin preventing people from cashing out too much at once. Eventually, withdraw requests exceeded the amount of money OneCoin had in its bank and the pyramid collapsed.

Numerous countries besides China have opened investigations and taken legal action against the founders of OneCoin, as well as the people who helped the OneCoin Ponzi scheme proliferate by getting other people to invest. The OneCoin website has remained offline. Its founder, Ruja Ignatova, is facing criminal charges in multiple countries but has disappeared.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

The post China Arrests 98, Recovers Record $266M from OneCoin Ponzi appeared first on BitcoinNews.com.