Category Archives: investigation

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1Broker to Launch ”Read-Only” Version of Bitcoin Futures After SEC Charges

After the US Securities and Exchange Commission (SEC) filed charges against Bitcoin futures firm 1Broker last week, the website now has plans to re-launch on a ”read-only” basis.

At the time of the SEC filing charges, the US Federal Bureau of Investigation (FBI) seized the website, with customers left without access to their funds. A slight relief came Tuesday in the way of 1Broker’s lawyers recommending that the brokerage website can go back online in a read-only format, meaning that customers can view balances and transaction history but cannot pursue any active trades or retrieve funds.

1Broker has been adamant that customers funds remain safe despite the legal action taken against them, saying that its top priority is allowing customers to withdraw from their accounts.

A post on parent company 1Pool’s website outlining the current situation of the company details its priority to protect customers and retrieving their funds: ”The company holds enough funds to cover all withdrawal requests, of course. Before we can take the required steps to do that, we have to seek permission from the authorities.” Balances will have to be paid out via an alternative domain also, its message reads.

CEO of 1Broker Patrick Brunner spoke to CoinDesk on the subject, saying that the company is asking for patience while the process transpires. “Unfortunately, such matters take some time – from our point of view, we are ready to process withdrawals right now,” Brunner told CoinDesk.

The read-only version of the website is expected to go live today on Wednesday.

The charges

The SEC claims that 1Broker violated federal law by allowing US traders to exchange on its platform.

An FBI agent created an account on 1Broker and made a purchase of what they claim are classified as securities, for which the company does not hold the correct licenses from the SEC. The FBI cited an additional grievance in that 1Broker only required an email address and username to open an account – a lack of any know-your-customer compliance.

 

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Former Indian Legislator Named ”Offender” in Bitcoin Extortion Inquiry

A former Indian legislator has been found a “proclaimed offender” by the local court presiding over a USD 1.3 million Bitcoin extortion case.

As reported by The Indian Express, former member of Legislative Assembly Nalin Kotadiya failed to show up in court regarding the case, despite multiple summonses. The Indian Criminal Investigation Department (CID) was not able to serve him an arrest warrant.

The sessions court Monday in Ahmedabad approved the CID’s application to register Kotadiya as an absconder from justice, meaning any resident can make his arrest and he is not at liberty to leave India.

An arrest warrant has also been issued for Jatin Patel, who has been declared a co-conspirator.

The case

Kotadiya became a person of interest earlier this year in the CID’s investigation that saw businessman Shailash Bhatt accuse a group of policeman extorting approximately USD 1.7 million in Bitcoin in February. New reporting indicates that Kotadiya stands accused of assisting in the police officers’ kidnap of Bhatt.

The case has an additional twist, as the victim Bhatt also faces his own accusations of extortion. He and an associate Kirit Paladiya face charges of extorting a member of BitConnect at gunpoint for around USD 22 million in cash and Bitcoin.

The director general of police Ashish Bhatia further discussed the case in a statement, saying: “Bhatt and his accomplices extorted Bitcoins and cash worth a total of Rs 155.14 crore. Later, they distributed the Bitcoins among themselves. Bhatt had kept around 700 Bitcoins.”

A report from the Hindustan Times cites Bhatt as an investor of BitConnect, which was shut down in India in January due to allegations of being a Bitcoin Ponzi scheme. The article describes the extortion as Bhatt’s plot to recover his investment.

Seven constables of the Amreli district police that are allegedly involved in the case are currently reported to be on the run.

 

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