5 Charged in New Jersey in $722 ... - The New York Times

Stablecoins Are Not as Safe as You Think. How Your USDT, PAX, BUSD Get Frozen in a Moment

Stablecoins Are Not as Safe as You Think. How Your USDT, PAX, BUSD Get Frozen in a Moment
Being created on the basis of blockchain, stablecoins were considered to be a safe haven for investors… until recently. Why is their immunity elusive and how does the Financial Action Task Force (FATF) plan to control them?
Established in 1989 by the G7, the FATF inter-governmental organization develops policies to resist money laundering and financing of terrorism. It sets standards and implements legal and regulatory measures to combat illegal financial transactions.
They developed recommendations for the monitoring of money laundering and keep revising them regularly. In case of non-compliance, law enforcement is executed via regional financial organizations. As of 2019, there are 39 full members of FATF, including the USA, UK, Australia, most EU countries, Singapore, India and the Russian Federation.
Since 1st July, the FATF organization has been headed by Marcus Pleyer. During the last FATF meeting, the new president expressed his concerns about global stablecoins and organizations that issue them. Although the organization had already dealt with these cryptocurrencies, it highlighted that, “it is essential to continue closely monitoring the ML/TF risks of so-called stablecoins, including anonymous peer-to-peer transactions via unhosted wallets”.
Is it ever possible to control crypto wallets that are not hosted on online exchanges? – you’d ask. We’re used to the fact that cryptocurrencies are outside the reach of banks and governments. However, when it comes to stablecoins, things are different.

It’s in the code

What makes stablecoins special is that they are pegging to fiat currency, for example, 1 TUSD = $1 USD. This means that such assets should be backed up by real money stored in the bank accounts of the issuing organization. Consequently, stablecoin creators need to comply with the requirements of the SEC, FATF and other controlling agencies, if they are to operate in the cryptocurrency sphere and be authorised to sell stablecoins. Transparent reports are not the only requirement, stablecoins must also provide the possibility of account blocking.
Surprisingly, this feature is implemented in each stablecoin. The experts from QDAO DeFi are covering several stablecoin protocols that enable this function.

OMNI-based USDT

Issued by Tether Limited, USDT is a stablecoin that was originally created to be worth $1 with each token backed by a $1 real fiat reserve. The currency was successfully promoted and added to major cryptocurrency exchanges but stayed a controversial asset. Despite the claims of Tether Limited, they failed to provide any contractual right or other legal claims to guarantee that USDT can be swapped for dollars or be redeemed.
In April 2019, Tether’s lawyers explained that each USDT was backed by only $0.74 in cash or equivalent assets. No audit of dollar collateral was done. A month before that, it changed the backing to include loans to affiliate companies. The scandal also involved the Bitfinex exchange that was accused of using USDT funds to cover $850 million in funds lost since 2018. They were also accused of manipulating USDT to push the BTC price.
Tether is available on five blockchains: Omni, Ehereum, EOS, Tron and Liquid. Only the latter does not have a freezing feature. Omni was the first protocol for USDT. Blocking of users’ accounts is possible, thanks to the following piece of code:

https://preview.redd.it/uqho45l33om51.png?width=690&format=png&auto=webp&s=c0feebdae086b0deeccde05278eaf3cc760f9e2b
Apparently, it’s used to blacklist addresses and contracts.

PAX

The concerns about PAX were centered around the notorious MMM BSC Ponzi scheme. Before the widespread adoption of DeFi services, it was the second-largest gas consumer after Ethereum. Out of 25,000 daily transactions, 5,000 were performed by MMM BSC. It was reported to be a scam but none of the accounts were frozen. Does it mean PAX lacked the resources to regulate illicit activities?
Evidently, not. The protocol code has a LAW ENFORCEMENT FUNCTIONALITY function that allows for the freezing/unfreezing of contracts or burning assets on blacklisted accounts. It turns out, anyone risks having their PAX coins destroyed during an investigation process while their accounts stay blocked.

History of frozen accounts

In 2019, the ZCash Foundation and Eric Wall conducted research on the privacy of stablecoins and revealed several frozen addresses. It’s not clear why exactly they were blocked. Most probably, it happened shortly after the exchange withdrawal – users took this action after witnessing platforms being hacked.

https://preview.redd.it/pkbruqm83om51.png?width=838&format=png&auto=webp&s=b068c5b8c5e5439892eaf5feefa3fbc93c694c8c
USDT was implicated at least twice in scandals to do with freezing. In April 2019, about $850 million in Tether dollars sent by Crypto Capital Corp. were frozen by a New York court. Tether and Btfinex were accused of participating in a cover-up to hide about $850 million worth in clients’ funds. By July 2020, Tether had frozen 40 Ethereum addresses with millions of USDT (some of them are shown in the screenshot above).
The Centre Consortium was the next to follow their lead; about a month ago, it blacklisted an address with USDC worth $100,000. That was done in response to law enforcement.
Yet, it’s not only Europe and the USA imposing control over cryptocurrencies. Since June 2020, the Chinese government managed to block several thousands of users’ bank accounts. It was done to resist illicit activities, especially money laundering. On some of those accounts, no activity had been detected for several months. Meanwhile, prior to April 2020, Chinese residents moved over $50 billion worth of crypto outside the country borders – more than is officially allowed (a maximum of $50,000 per person).
The authorities claim that USDT and other stablecoins are often used in illegal activities. Together with the People’s Bank of China (PBOC), they are developing new ways of investigating digital crimes and money laundering operations involving exchanges and crypto wallets. Local financial bureaus and police are working tight-lipped about investigating startups and crypto exchanges. And they are succeeding at it.
In July 2020, Chinese authorities confiscated BTC, ETH and USDT worth $15 million from people who allegedly ran a fake cryptocurrency scheme.
By the way, not only corporate accounts are being closed. One investor claims his account had been frozen after using yuan to purchase crypto. Also, users who transfer illegally obtained money outside of the mainland in large amounts are under suspicion. Does it mean the Chinese government has started tightening the screws on cryptocurrency users?

DAI, USDT on Liquid and USDQ are the main options for stablecoin deposits

So, where can you store your crypto assets? USDT on Liquid and DAI are not the only solutions available. Consider making a deposit in USDQ, the stablecoin of the QDAO ecosystem. Like other stablecoins, it’s 1-to-1 pegged to USD. However, it cannot be frozen by a government, financial organization or anyone from the QDAO team. You can check it yourself by reading our Smart contract and USDQ Audit.
In QDAO, users’ accounts are never frozen by a single person – all account issues are solved by the entire QDAO community, with the help of a QDAO governance token.
In case of blocking (the chances of which are almost non-existent), you can address the QDAO community and get timely help.

Bottom Line

With FATF taking this new course of action, we might witness serious pressure on stablecoin providers. Some projects will resist it, but it’s still not safe to store your assets in popular stablecoins, especially USDT. Your account can be frozen by authorities for dozens of reasons without the possibility of retrieval.
Yet, there are a number of reliable alternatives and USDQ stablecoin is one of them. QDAO DeFi platform users feel free to manage their crypto reserves and make profitable deposits.
Want to be the first to hear QDAO DeFi news and updates? Visit our website and stay in touch with us on social media: Twitter, Facebook, Telegram and LINE (for the Japanese-speaking community).
submitted by QDAODeFi to u/QDAODeFi [link] [comments]

The LIES of Chris Rabalais and AllSportsMarket

https://i.imgur.com/oucavJo.jpg
A) This is a work in progress. (trying to make this neater and add things that people post) These things have been collected from forums / posts in various places (official forums, reddit groups etc)..and are here to be sifted through and examined to see which are true and which are not. Anyone is welcome to comment both agreement or disagreement.
B) ANY CORRECTIONS please send a message and reference the lie number *** I want to remove false info ASAP*** Or make a post in this thread. If there is anything in this list that shouldn't be here, it will be removed.
C) If you'd like me to add a lie, PLEASE make a post in this thread! Include something like ADD THIS LIE and make a short description
d) ASM /Allsportsmarket / the company means any or all of the proxies and identities of CWH , NSEI, Sportshares.net etc
------------------------------------
A while back, Chris claimed people on reddit were "lying" and that he would respond "point by point" to any "lies" told by redditors. I have begun to compile a list of all of Chris' lies from various sources.

To Chris Rabalais / Allsportsmarket.com : You are more than welcome to respond "point by point". Please include a lie number...and respond and explain how it isn't a lie....

---

Lies of Chris Rabalais

1)This is and was an investment
He has always claimed this was an investment, and still does. He claims you will get a return...yet from the other side of his mouth, he makes sure to mention that this is a "donation." Not one of us would have donated to him without the chance of a return / profit. None of us. This was a donation....to Chris Rabalais...NOT an investment. Still to this day when askign for money he makes suree to put in DONATION but then out of the other side of his mouth he claims you will get a return..or profit..and says you are an investor / insider etc.....This is NOT an investment. This is a DONATION to a very inefficient "charity" claiming you will someday see a "return" on it.
2) Investors into ASM would get a return on their investment -- profit from it
He is still promising people a return...many people show a 'profit' on their account statement but are unable to cash out. Unable to withdraw etc...Chances are, If you have made a "profit" from this on paper, you cannot withdraw it.
3) He was in the process of registering the company shares with the SEC
The SEC has stated point blank he has taken NO STEPS to register the company shares. It is in the complaint.
4) The company shares were ABOUT to be registered, and once they did...they would have even more value and we would miss out unless we bought in
Not only did he say it was in process, he claimed many times they were very close to getting the shares registered and when they did, they would have more value..and investors would be sorry if we didn't jump in on this "rocketship".
5) Chris knows how to get the shares registered with the SEC or has any clue what he is doing in terms of registering the shares
According to the SEC , Chris Rabalais has no idea HOW to even get the shares registered...and that is in their complaint as well. Meanwhile for years Chris was claiming he knew what do do to get the shares registered.
6) "This may be the last chance to jump on this great opportunity"
How many times have we all heard this lie? This or that program is ending....you'll never get another chance at giving money to Chris Rabalais again...but then shockingly...there's another even better offer in a couple days/weeks...
7) If you don't give X amount of money right now , the lights might suddenly go out on ASM..and you'll lose your "investment"
Another lie they tell is that if you don't give money, they will go out of business and you will "lose your investment". Bullcrap , they're not shutting off their free money machine....until someone MAKES them. Oh and you have no investment. Two lies for the price of one.
8) This is not a ponzi scheme
Chris has addressed the ponzi issue only VERY briefly over the years. He recently claimed it isn't a ponzi because the "last guy in can still make money" but that would require MONEY coming in from others...so he gets around the truth by omitting that its not the "guy" its the "last money in " which is nearly the same thing... the people who put their money in last will lose....that is a ponzi. The Judge in the Seth Leon case said so...and I hope another judge says so soon. (See here: https://www.reddit.com/ASMEunfiltered/comments/e61nya/summary_of_the_seth_leon_case_with_update/ )
9) The sports shares have value
Chris claims they have value because they area "claim on future dividends" which is a lie. That is not any definition of real or intrinsic value...and even if it was (it isn't, IMO) the claim on future dividends is a LIE because every penny of that future dividend money relies on new money coming into the market...which is a ponzi...which is valueless
10) You would be able to cash out (sell your holdings, pay off your bonus margin and keep your profits)
He changed the rules when the market started imploding. For years he promised investors they could sell their shares, pay off our margin and take our profits. No one would've bought in if they thought they could never do this. Even after he froze people's ability to cash out...he kept claiming that we would be able to soon...and urged people to buy more margin because all of the profits would be able to be kept.
11) Chris would stop selling margin
Recently, there was a conference call where key members of the team called for an end to the margin offers..NOT because they were a scam (they are) but because it was no longer possible to ignore the implosion of the pilot market and the collapse was being blamed on margin....Chris agreed to end margin and made announcements to this end. In a short time, he realized that promising people money on margin profit was his only revenue...so he HAD to start selling margin again...He knows it is worthless, promised to stop selling it....and lied.
12) Different celebrities, politicians, business people were about to come on board and help us
XFL (paul has contacts with them!!), PHIL COLLINS' WIFE!, Mark Cuban, Jon Bon FUCKING Jovi, Roger Goddell, Snoop Dogg, Brian Austin Green, Trump (speaker at zero club), Labron James, meetings with MLB people, Jack MA / Alibaba.......god knows how many other names this guy drops as potential people who are going to help or who we are 'reaching out' to in order to get them to help us. (help me add to this list)
13) ASM would have a "liquidity event" and be able to make money off of our company shares
There was going to be some liquidity event where we could sell our company shares to other investors...of course it never happened.
14) The new york times ad was going to be about ASM or helping our investment
There was NO MENTION of ASM or AllSportsMarket in the new york times ad and it didn't do a single thing to help ASM become a legitimate company. The only thing it did (from memory) was bash gambling.
15) The trips to Israel, funded by the investors, were something worthy of doing with the money...
Chris bragged and posted pictures of his trips to Israel...but what did they have to do with ASM? How was spending "donations" (investments) for him to go to Israel supposed to help the company? Clearly this was a waste.
16) the Hero club events he goes to (more travel) help ASM in any way whatsoever
I have never seen any evidence that spending who knows how much of the investors' money has been wasted on this,yet chris continues to act as if his membership in the Hero Club is a wise way to spend money...I have seen no evidence that the Hero club has done anything bust waste money.
17) donating to ASM is helping anyone or doing anything other than putting money in HIS pocket...
Quite simply, Chris "donates" 10% of the money given him, if we are to believe that. So He has given (according to him) 150k+ to a hunger charity. They have (according to Chris) matched this 7x, so the 150k donation has turned into a millionish dollars worth of charity. Sounds good right? Well in doing so, Chris has just wasted 90% of the money. Instead of 150k, had we all simply given our 1.5 million to this same charity....and they matched it 7x...we would have turned our money into 10+ million dollars for charity. So essentially, even by Chris' own numbers...we have wasted 9 million dollars of potential charity....by paying Chris's rent..cars etc.. all so that he can take 90% and give 10% to charity....to me, this is wasteful and we would be better donationg directly to the 7x charity the entire 100% rather than wasting the 90%.
18) The ASM 'real market' was a real money market
Chris started the real market to fool us into thinking it was actual money. He later then changed the name to "pilot market" after taking people's REAL money..so he could have the excuse "HEY this is a PILOT market!!!" when you cant withdraw...otherwise why call this a "real" market then suddenly change the name to "pilot"?
19) the ASM pilot market was going to transition with your holdings to a 'regulated' or 'exempt market' and you would be able to keep your profit from the pilot market
So it has been promised to us that the pilot (which was the real market) market will transition to another market..where.....where you'll STILL be able to keep your profits...so..guys..KEEP BUYING BONUS MARGIN lol....
20) If there is a good enough plan, Chris will happily step down in January 2020 and let someone else change the direction of the "company"
Chris claims "give him till December" and if no one is happy he will step aside if that's what everyone wants...IF there is a plan he likes..LOL..we will see...but I am guessing he will not.
21) The pilot market is working
He has claimed the pilot market is working and proves that ASM is functional...yet the market has collapsed and he has frozen everyone's accounts from withdrawing..or paying off margin..etc...but the real/pilot market has been a disaster. Here is him contradicting himself and admitting that the pilot market does NOT work : https://vocaroo.com/bsbcnHWDF8z . This is an admission thatthe pilot market as it is now is busted and will never work without being completely re-designed (revenue sharing etc). The worst part of this is he KNOWS the pilot market is not working yet he is still selling margin to buy stocks on this market.....that to me is criminal. How can he do this?
22) The learning market is working and proves that the math and numbers are correct and functional
Claims have been made the learning market is working..LOL...anyone who has touched the learning market knows it is completely dysfunctional...and not any kind of advertisement or positive experience...
23) Bonus margin has some sort of value other than to put money in his pocket
He claims bonus margin has value. It doesn't. Its worthless. If he tries to deny this..ask him why he is selling it if it has no value? Ask him how he plans on turning something with 0 value into something with value. This is the core of his scam right now..selling WORTHLESS bonus margin with no value for real money...which he donates 10% of and the rest goes to expenses...and his salary & rent etc...
24) Chris "had alper" double check the math in 2009 , and the market math is fine..
Oh god...so in one of the videos, Chris claims he had Alper check the math in 2009 and alper told him the numbers work. This is such utter horseshit, and mainly designed to deflect responsibility for the failure of the market..so he can blame it on Alper. Chris knows the math doesn't work. Alper knows the math doesn't work..and Alper & Chris know that margin is worthless...and they know the market is a failure...they have to know this...
25) special clubs like "ASM Black", "Insider programs", "Advisory Councils" etc etc are anything other than him trying to get even more money out of your pocket
All of these programs are just designed to get you to give them more money..there is no real benefit to being a member in them. The insider program just basically stopped people from being able to withdraw sooner....who knows what ASM black was..and this advisory council...what was that? Give Chris 100$ to listen to more youtube rants? Ok...whatever new club or council they will come up with next is a bunch of crap designed to make you feel special as you give them your hard earned money.
26) The NDA he sent via email before spamming you with more ads is legally binding
We all know the NDA he sent via e-mail was worthless..it was hilarious.....and unenforceable....
27) They would provide investors with financial documents / audit / detailed information at the end of October 2019
Yeah so will we ever get to see the "audit" ? Doubt it...they are not transparent with any pertinent info. Who is paid what? Who holds what shares? What shares have been granted to who? What money was paid by NSEI to who , and for what? "Seal of transparency" my ass.
28) The SEC filing suit against him could be viewed as a positive in some ways
I forget how he worded it but he basically claimed the SEC suit was some sort of opportunity for something positive for him. The one positive thing I can think of is it stopped him from getting more money from suckers...
29) He didn't "really" lose the case against Seth Leon
He made all kinds of excuses and claims the only reason he lost against Seth Leon is because Seth Leon sent the papers to an old address....LOL (see here: https://www.reddit.com/ASMEunfiltered/comments/e61nya/summary_of_the_seth_leon_case_with_update/ ) Make NO mistake..Chris LOST the case. The court found "AMPLE EVIDENCE" of fraud by Chris Rabalais.
30) It was Trump's fault (Govt shutdown) that he didn't get paperwork done with the SEC
LOL...I hope this is what he tells the Judge
31) It was Jason's fault that "a letter" wasn't sent to the SEC regarding the NRHL
Blame it on a guy who doesn't work for the company any more...
32) It is alper's fault the math/numbers don't work because Chris asked alper to "check the numbers" in 2009
Blame this on Alper.....when he has known for YEARS the numbers do not work
33) there were "saboteurs" who tried to wreck the "deal" with NRHL, who came from reddit..*but luckily they saved the deal!
Remember the saboteurs? remember how they "saved" the deal with the NRHL? Remember how the NRHL was going to be huge for ASM? Yeah none of these things were true....MAYBE a guy (gregson?) tried to contact the NRHL to find out if they were even real.. but NO ONE thought the NRHL was going to be a good thing..and NO ONE wanted to transition their money to a market led by roller derby..because it was and is a stupid idea.
34) There were lawyers (zero club? friends?) who were going to help with the SEC defense for free
Chris had an army of lawyers, some of the best in the country and who had never lost...but yet he had to beg the court for a free lawyer because he can't get a lawyer to represent him...LOL
35) "secured by blockchain" - Chris claims this tech is in use now but what is it exactly other than bullshit?
On one of his latest videos he claims the blockchain technology is protecting the ASM market right now...BS. There is no technology that I have seen. There hasn't been anything said about what this even is or does. Ace hasn't even been heard from since around August has he? They can't even get an android app...the blockchain bullshit is just more jargon and buzzwords...trying to get you to give them money...there is nothing behind this "secured by blockchain" trademark...other than words...otherwise why not explain exactly what it is, and how it works ..etc...
36) Chris is going to counter sue the SEC and prove that he is a legitimate business
LOL.. with his free lawyer?
37) All cryptocurrencies are a SCAM
Notice he screams and cries FRAUD at many things, but he is a fraud himself. Typical tactic...accuse others of what you are doing. Also, there is some real value in some cryptos, like bitcoin...unlike a sports share on ASM. Its called 'proof of work' ...that has real value that can even be measured..by electricity use, processing power etc...I am not arguing it has a lot of value, or even that it is as valuable as the price....but it is above zero, unlike a share in a sports team on ASM. I'm also not an expert nor to I condone investing in crypto...
38) Gambling is more of a problem than ASM / NSEI
Again, he screams and cries about how dirty Gambling is...but at least legal gambling is regulated, and you have a chance to win. Unlike ASM...
39) They were working on an Android app , and needed donations for it
One of the reasons I donated early on was because of seeing the IOS app, and the promises of making an android app.In fairness this might not have been a lie....but if theyre not going to make an android app , then say so.
41) They lied by omission and did not tell investors about the SEC suit until August 2019
So someone else came and announced the SEC lawsuit on the reddit forum in August 2019. There is some strong evidence that Chris knew about this in April 2019 or even earlier like maybe Oct 2018...and if he knew about it before it was announced , then he witheld this information from all of us..
42) The NFL / MLS "Deals"
We very nearly had a deal with the NFL and MLS...or have / had a chance to make deals with them...its all bullshit. The guy cant even make a deal with roller derby leagues...and we are expected to believe he is making deals with major leagues?
43) Wefunder / Crowd Funding
We started the process to sell shares through we-funder....but they turned us down. Guess what Chris "forgot" to tell us all? THE REASON they turned us down...because ASM / CWH doesn't pass the "smell test"? What was the reason? It seems like maybe the reason was the UNREGISTERED SECURITIES? I mean there had to be a reason..what was it?
44) Share Buyback
They were going to buy back company shares from investors....and at times stated the shares were so valuable they would gladly buy them back for X amount because they were sure to go up in price...but when push comes to shove they NEVER will buy this worthless junk back......even for 1 penny. A lot of the 'tyes men' have stated they would also buy shares back from unhappy investors but of course they never do this in reality.
45) Telling the truth, even if it is harmful to Chris / ASM is some type of Slander or Libel
Chris would like you to think that calling him out on fraud and lies is some type of "libel" or "slander" but as anyone knows...telling the truth is not slander or libel. He is trying to scare people from telling the truth. Blowing the whistle on his fraud is NOT slander or libel. Period. He is the CEO of a company that he sold shares of stock in, fraudulently. He must and will be held accountable.
46) The market cap number is a legitimate indicator of the validity of ASM
Chris love to throw around market capitalization numbers (4 Billion LOL) as if they mean anything at all or indicate that this market is healthy. They include the learning market (fake money) and the margin (also fake money). If you subtract the learning market, the bonus margin, and the money "used" by chris for data, rent, cars etc...you have pretty much zero market cap in reality.
47) ASM has a way of checking if an investor is accredited: See here: https://www.reddit.com/ASMEunfiltered/comments/eacs69/new_lies_regarding_searching_for_for_accredited/ . In my understanding , one of the ways (in some cases) un-registered securities can be sold is if it is to an "accredited" investor. The SEC has said Chris has no means of checking this. I would personally believe the SEC at this point....and I will count this as a lie until it is proven that Chris / ASM actually does have a way of legitimately checking accreditation.
48) The reason Chris withheld the fact the SEC was investigating him and suing him was because the SEC told him he couldnt tell us.
BULLSHIT. In the audio Chris makes absurd claims that he couldnt tell "investors" of his problems with the SEC because they told him not to talk about it. Yet meanwhile he kept taking money from investors as if everything was fine..KNOWING that trouble was brewing and KNOWING that the shit was going to hit the fan. Show me a letter by the SEC that says he can't warn his investors of an impending action by them SHOW IT TO US. If you show this to us, I'll remove this lie. It doesnt make any sense because the SEC exists to protect us from predators like Chris , so why would they tell him he cannot warn us of problems with the SEC????? MAKES ZERO SENSE. Does not pass the smell test. This is a lie by omission..taking our money , pretending things are fine....but KNOWING problems are coming. The bottom line: Chris didnt say SHIT about this anywhere that I know of until AFTER it was posted publicly that the lawsuit was filed...I heard about this online before it was ever mentioned by chris in any conference call or statement by him.
49) Not sure if this is technically a "lie" or not but the guy / ASM has at least 10 twitter accounts...here are a few of them: 1) https://twitter.com/AllSportsMarket 2) https://twitter.com/rabalais_cva 3) https://twitter.com/asmclients 4) https://twitter.com/thesportsvote 5) https://twitter.com/SportsFolios 6) https://twitter.com/MySportsWiki 7) https://twitter.com/chrisrabalais 8) https://twitter.com/NuSportsEconomy 9) https://twitter.com/ASMFreeApp 10) https://twitter.com/ASM_Advisor (not 100% on this one but it looks fake) ..etc..... It looks as if this one: https://twitter.com/ASMFreeApp has a bunch of bots or paid 'farm' followers. So, while not a 'lie' exactly...very odd and shady behavior.
50) In the "Investors Q& A" found here: https://tinyurl.com/spbznmf They failed to disclose the Seth Leon case, the failed attempt at bankruptcy discharge of the fraud debt, and failed to disclose the debt owed to Seth Leon. So they lied in the sections about Legal Problems and they Lied in the sections about Debt. This is in a Q&A involving potential ionvestors so they are lying to potential investors about the risks.

51) Chris will "fact check" and respond to every accusation made against him and prove that these things are lies told by "known liars"
https://i.imgur.com/HaGfekN.jpg
So a couple of weeks ago, Chris said he would fact check all of the "lies" told about him...so I thought I would do him a big favor and make a huge list. His claim was that everyone saying all of these things are "known liars" and none of these things is true. He says they are all bogus "claims" made by "liars." He said he would refute these"claims." Well guess what asshole? Every songle person reading this is probably a victim of yours, and they KNOW all of these things aren't "claims" ... they are facts. I have done my best here to stick to things that are universal..that we have all witnessed as investors.
Now (shockingly) chris refuses to "fact check" any of these "lies." He says he will respond only if you sign your name and send him a private e-mail or make a post on his censored and controlled website where he has to approve any post before it is seen by the public... So I will add this as yet another lie. He will never refute SHIT. He is a thief and a liar. and a con man....and CAN"T refute anything said above. Period. More than likely if anyone posted this list on his forums, he would NEVER allow it to stand....so how is anyone supposed to get this list "fact checked"? The only Known liar here..well..I think we all know who that is...
You would think he might want to address these things publicly instead of making people ask via e-mail and leaving a cloud of suspicion for potential investors to see..and maybe he would rather answer one time,rather than a bunch of separate e-mails......but I guess when there are literally no answers to any of these things, the only solution is to try and hide it more...
submitted by 707NorCaL707 to ASMEunfiltered [link] [comments]

r/Bitcoin recap - July 2019

Hi Bitcoiners!
I’m back with the 31st monthly Bitcoin news recap.
For those unfamiliar, each day I pick out the most popularelevant/interesting stories in Bitcoin and save them. At the end of the month I release them in one batch, to give you a quick (but not necessarily the best) overview of what happened in bitcoin over the past month.
You can see recaps of the previous months on Bitcoinsnippets.com
A recap of Bitcoin in July 2019
Adoption
Development
Security
Mining
Business
Education
Regulation & Politics
Archeology (Financial Incumbents)
Price & Trading
Fun & Other
submitted by SamWouters to Bitcoin [link] [comments]

Weekly news review (July 20-26)

Weekly news review (July 20-26)
Hello! How is it going, Community?
Let's take a look at last week's news highlights!
https://preview.redd.it/dih9492hh7d31.png?width=1200&format=png&auto=webp&s=dcff9add3ab7149178718cc6b0bf3d27df083cdb

The Federal Trade Commission (FTC) today officially confirmed that Facebook has agreed to pay a record-breaking $5 billion fine over privacy violations surrounding the Cambridge Analytica scandal.
Besides the multibillion-dollar penalty, the company has also accepted a 20-year-long agreement that enforces it to implement a new organizational framework designed to strengthen its data privacy practices and policies.
According to the FTC, Facebook has repeatedly used deceptive disclosures and settings to undermine its users' privacy preferences in violation of its 2012 FTC order that required the social media to gain explicit consent from users to share their personal data.
The newly proposed organizational framework will also cover not just Facebook's massive social media network, but also the company-owned services, including WhatsApp and Instagram.

The New York Times Company has revealed new details relating to its ongoing blockchain publishing experiments.
The New York Times and partner companies will run a proof-of-concept from July until late 2019 to find a way to maintain trust in digital files. The project aims to store a news item’s “contextual metadata” on a blockchain, including when and where a photo or video was shot, who took it and information regarding how it was edited and published.
The idea is to create a “set of signals that can travel with published media anywhere that material is displayed,” including on social media, in group chats and in search results.

According to a report released on July 23 by the International Energy Agency assessed emissions due to Bitcoin (BTC). BTC mining is likely responsible for 10‑20 Megatonne (Mt) of carbon dioxide (CO2) per year or 0.03-0.06% of global energy-related carbon dioxide emissions.
Annual Bitcoin’s energy consumption estimates range from 20 TWh to 80 TWh, with the agency’s own estimate being 45 TWh. But despite allegedly consuming more energy than Ireland, this means Bitcoin still consumes less than electric vehicles (58 TWh in 2018).
The report’s author further points out that Bitcoin mining hotspots tend to start in places rich in cheap, renewable energy. The paper also cites research claiming that roughly 76% of the energy consumed by Bitcoin is renewable and using this data its estimates of CO2 emissions.

Nearly 2.7 trillion won ($2.3 billion) have been lost to crimes involving cryptocurrency in the last two years, according to South Korean government data.
Figures provided by the country’s justice ministry on Sunday indicate that losses from crypto scams, Ponzi schemes, embezzlement and illegal exchange transactions came to 2.69 trillion won from July 2017 to June 2019.
The ministry further said that 420 individuals have been charged over cryptocurrency crimes in that period, with 132 having been arrested.
Notably, the crime figures don’t include losses from exchange hacks.
Democratic Party member Je Youn-kyung has proposed legislation to bring in stricter cybersecurity rules for crypto platforms, which is currently pending passage in Korea’s National Assembly.

Iran is officially recognizing cryptocurrency mining as an industry within its borders.
According to the Iran Chamber of Commerce, Industries, Mines and Agriculture, a government economic commission approved crypto mining last Sunday, with the government now looking for ways to regulate this activity within its existing legal structure.
While crypto mining appears to have been given a tentative green light in Iran, it is unclear whether officials are changing their stance on using cryptocurrencies for domestic payments, and if so, how.

Have anything to say? Do it in the comments section below! :)
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The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
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CRYPTOCURRENCY BITCOIN

CRYPTOCURRENCY BITCOIN
Bitcoin Table of contents expand: 1. What is Bitcoin? 2. Understanding Bitcoin 3. How Bitcoin Works 4. What's a Bitcoin Worth? 5. How Bitcoin Began 6. Who Invented Bitcoin? 7. Before Satoshi 8. Why Is Satoshi Anonymous? 9. The Suspects 10. Can Satoshi's Identity Be Proven? 11. Receiving Bitcoins As Payment 12. Working For Bitcoins 13. Bitcoin From Interest Payments 14. Bitcoins From Gambling 15. Investing in Bitcoins 16. Risks of Bitcoin Investing 17. Bitcoin Regulatory Risk 18. Security Risk of Bitcoins 19. Insurance Risk 20. Risk of Bitcoin Fraud 21. Market Risk 22. Bitcoin's Tax Risk What is Bitcoin?
Bitcoin is a digital currency created in January 2009. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto, whose true identity is yet to be verified. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being legal tender, Bitcoin charts high on popularity, and has triggered the launch of other virtual currencies collectively referred to as Altcoins.
Understanding Bitcoin Bitcoin is a type of cryptocurrency: Balances are kept using public and private "keys," which are long strings of numbers and letters linked through the mathematical encryption algorithm that was used to create them. The public key (comparable to a bank account number) serves as the address which is published to the world and to which others may send bitcoins. The private key (comparable to an ATM PIN) is meant to be a guarded secret and only used to authorize Bitcoin transmissions. Style notes: According to the official Bitcoin Foundation, the word "Bitcoin" is capitalized in the context of referring to the entity or concept, whereas "bitcoin" is written in the lower case when referring to a quantity of the currency (e.g. "I traded 20 bitcoin") or the units themselves. The plural form can be either "bitcoin" or "bitcoins."
How Bitcoin Works Bitcoin is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments. The independent individuals and companies who own the governing computing power and participate in the Bitcoin network, also known as "miners," are motivated by rewards (the release of new bitcoin) and transaction fees paid in bitcoin. These miners can be thought of as the decentralized authority enforcing the credibility of the Bitcoin network. New bitcoin is being released to the miners at a fixed, but periodically declining rate, such that the total supply of bitcoins approaches 21 million. One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi. If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places. Bitcoin mining is the process through which bitcoins are released to come into circulation. Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain and receiving a reward in the form of a few bitcoins. The block reward was 50 new bitcoins in 2009; it decreases every four years. As more and more bitcoins are created, the difficulty of the mining process – that is, the amount of computing power involved – increases. The mining difficulty began at 1.0 with Bitcoin's debut back in 2009; at the end of the year, it was only 1.18. As of February 2019, the mining difficulty is over 6.06 billion. Once, an ordinary desktop computer sufficed for the mining process; now, to combat the difficulty level, miners must use faster hardware like Application-Specific Integrated Circuits (ASIC), more advanced processing units like Graphic Processing Units (GPUs), etc.
What's a Bitcoin Worth? In 2017 alone, the price of Bitcoin rose from a little under $1,000 at the beginning of the year to close to $19,000, ending the year more than 1,400% higher. Bitcoin's price is also quite dependent on the size of its mining network since the larger the network is, the more difficult – and thus more costly – it is to produce new bitcoins. As a result, the price of bitcoin has to increase as its cost of production also rises. The Bitcoin mining network's aggregate power has more than tripled over the past twelve months.
How Bitcoin Began
Aug. 18, 2008: The domain name bitcoin.org is registered. Today, at least, this domain is "WhoisGuard Protected," meaning the identity of the person who registered it is not public information.
Oct. 31, 2008: Someone using the name Satoshi Nakamoto makes an announcement on The Cryptography Mailing list at metzdowd.com: "I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party. The paper is available at http://www.bitcoin.org/bitcoin.pdf." This link leads to the now-famous white paper published on bitcoin.org entitled "Bitcoin: A Peer-to-Peer Electronic Cash System." This paper would become the Magna Carta for how Bitcoin operates today.
Jan. 3, 2009: The first Bitcoin block is mined, Block 0. This is also known as the "genesis block" and contains the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks," perhaps as proof that the block was mined on or after that date, and perhaps also as relevant political commentary.
Jan. 8, 2009: The first version of the Bitcoin software is announced on The Cryptography Mailing list.
Jan. 9, 2009: Block 1 is mined, and Bitcoin mining commences in earnest.
Who Invented Bitcoin?
No one knows. Not conclusively, at any rate. Satoshi Nakamoto is the name associated with the person or group of people who released the original Bitcoin white paper in 2008 and worked on the original Bitcoin software that was released in 2009. The Bitcoin protocol requires users to enter a birthday upon signup, and we know that an individual named Satoshi Nakamoto registered and put down April 5 as a birth date. And that's about it.
Before Satoshi
Though it is tempting to believe the media's spin that Satoshi Nakamoto is a solitary, quixotic genius who created Bitcoin out of thin air, such innovations do not happen in a vacuum. All major scientific discoveries, no matter how original-seeming, were built on previously existing research. There are precursors to Bitcoin: Adam Back’s Hashcash, invented in 1997, and subsequently Wei Dai’s b-money, Nick Szabo’s bit gold and Hal Finney’s Reusable Proof of Work. The Bitcoin white paper itself cites Hashcash and b-money, as well as various other works spanning several research fields.
Why Is Satoshi Anonymous?
There are two primary motivations for keeping Bitcoin's inventor keeping his or her or their identity secret. One is privacy. As Bitcoin has gained in popularity – becoming something of a worldwide phenomenon – Satoshi Nakamoto would likely garner a lot of attention from the media and from governments.
The other reason is safety. Looking at 2009 alone, 32,489 blocks were mined; at the then-reward rate of 50 BTC per block, the total payout in 2009 was 1,624,500 BTC, which at today’s prices is over $900 million. One may conclude that only Satoshi and perhaps a few other people were mining through 2009 and that they possess a majority of that $900 million worth of BTC. Someone in possession of that much BTC could become a target of criminals, especially since bitcoins are less like stocks and more like cash, where the private keys needed to authorize spending could be printed out and literally kept under a mattress. While it's likely the inventor of Bitcoin would take precautions to make any extortion-induced transfers traceable, remaining anonymous is a good way for Satoshi to limit exposure.
The Suspects
Numerous people have been suggested as possible Satoshi Nakamoto by major media outlets. Oct. 10, 2011, The New Yorker published an article speculating that Nakamoto might be Irish cryptography student Michael Clear or economic sociologist Vili Lehdonvirta. A day later, Fast Company suggested that Nakamoto could be a group of three people – Neal King, Vladimir Oksman and Charles Bry – who together appear on a patent related to secure communications that were filed two months before bitcoin.org was registered. A Vice article published in May 2013 added more suspects to the list, including Gavin Andresen, the Bitcoin project’s lead developer; Jed McCaleb, co-founder of now-defunct Bitcoin exchange Mt. Gox; and famed Japanese mathematician Shinichi Mochizuki.
In December 2013, Techcrunch published an interview with researcher Skye Grey who claimed textual analysis of published writings shows a link between Satoshi and bit-gold creator Nick Szabo. And perhaps most famously, in March 2014, Newsweek ran a cover article claiming that Satoshi is actually an individual named Satoshi Nakamoto – a 64-year-old Japanese-American engineer living in California. The list of suspects is long, and all the individuals deny being Satoshi.
Can Satoshi's Identity Be Proven?
It would seem even early collaborators on the project don’t have verifiable proof of Satoshi’s identity. To reveal conclusively who Satoshi Nakamoto is, a definitive link would need to be made between his/her activity with Bitcoin and his/her identity. That could come in the form of linking the party behind the domain registration of bitcoin.org, email and forum accounts used by Satoshi Nakamoto, or ownership of some portion of the earliest mined bitcoins. Even though the bitcoins Satoshi likely possesses are traceable on the blockchain, it seems he/she has yet to cash them out in a way that reveals his/her identity. If Satoshi were to move his/her bitcoins to an exchange today, this might attract attention, but it seems unlikely that a well-funded and successful exchange would betray a customer's privacy.
Receiving Bitcoins As Payment
Bitcoins can be accepted as a means of payment for products sold or services provided. If you have a brick and mortar store, just display a sign saying “Bitcoin Accepted Here” and many of your customers may well take you up on it; the transactions can be handled with the requisite hardware terminal or wallet address through QR codes and touch screen apps. An online business can easily accept bitcoins by just adding this payment option to the others it offers, like credit cards, PayPal, etc. Online payments will require a Bitcoin merchant tool (an external processor like Coinbase or BitPay).
Working For Bitcoins
Those who are self-employed can get paid for a job in bitcoins. There are several websites/job boards which are dedicated to the digital currency:
Work For Bitcoin brings together work seekers and prospective employers through its websiteCoinality features jobs – freelance, part-time and full-time – that offer payment in bitcoins, as well as Dogecoin and LitecoinJobs4Bitcoins, part of reddit.comBitGigs
Bitcoin From Interest Payments
Another interesting way (literally) to earn bitcoins is by lending them out and being repaid in the currency. Lending can take three forms – direct lending to someone you know; through a website which facilitates peer-to-peer transactions, pairing borrowers and lenders; or depositing bitcoins in a virtual bank that offers a certain interest rate for Bitcoin accounts. Some such sites are Bitbond, BitLendingClub, and BTCjam. Obviously, you should do due diligence on any third-party site.
Bitcoins From Gambling
It’s possible to play at casinos that cater to Bitcoin aficionados, with options like online lotteries, jackpots, spread betting, and other games. Of course, the pros and cons and risks that apply to any sort of gambling and betting endeavors are in force here too.
Investing in Bitcoins
There are many Bitcoin supporters who believe that digital currency is the future. Those who endorse it are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. Although it is not itself any backed by any government or central bank, bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders interested in currency plays. Indeed, one of the primary reasons for the growth of digital currencies like Bitcoin is that they can act as an alternative to national fiat money and traditional commodities like gold.
In March 2014, the IRS stated that all virtual currencies, including bitcoins, would be taxed as property rather than currency. Gains or losses from bitcoins held as capital will be realized as capital gains or losses, while bitcoins held as inventory will incur ordinary gains or losses.
Like any other asset, the principle of buying low and selling high applies to bitcoins. The most popular way of amassing the currency is through buying on a Bitcoin exchange, but there are many other ways to earn and own bitcoins. Here are a few options which Bitcoin enthusiasts can explore.
Risks of Bitcoin Investing
Though Bitcoin was not designed as a normal equity investment (no shares have been issued), some speculative investors were drawn to the digital money after it appreciated rapidly in May 2011 and again in November 2013. Thus, many people purchase bitcoin for its investment value rather than as a medium of exchange.
However, their lack of guaranteed value and digital nature means the purchase and use of bitcoins carries several inherent risks. Many investor alerts have been issued by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau (CFPB), and other agencies.
The concept of a virtual currency is still novel and, compared to traditional investments, Bitcoin doesn't have much of a long-term track record or history of credibility to back it. With their increasing use, bitcoins are becoming less experimental every day, of course; still, after eight years, they (like all digital currencies) remain in a development phase, still evolving. "It is pretty much the highest-risk, highest-return investment that you can possibly make,” says Barry Silbert, CEO of Digital Currency Group, which builds and invests in Bitcoin and blockchain companies.
Bitcoin Regulatory Risk
Investing money into Bitcoin in any of its many guises is not for the risk-averse. Bitcoins are a rival to government currency and may be used for black market transactions, money laundering, illegal activities or tax evasion. As a result, governments may seek to regulate, restrict or ban the use and sale of bitcoins, and some already have. Others are coming up with various rules. For example, in 2015, the New York State Department of Financial Services finalized regulations that would require companies dealing with the buy, sell, transfer or storage of bitcoins to record the identity of customers, have a compliance officer and maintain capital reserves. The transactions worth $10,000 or more will have to be recorded and reported.
Although more agencies will follow suit, issuing rules and guidelines, the lack of uniform regulations about bitcoins (and other virtual currency) raises questions over their longevity, liquidity, and universality.
Security Risk of Bitcoins
Bitcoin exchanges are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. If a thief gains access to a Bitcoin owner's computer hard drive and steals his private encryption key, he could transfer the stolen Bitcoins to another account. (Users can prevent this only if bitcoins are stored on a computer which is not connected to the internet, or else by choosing to use a paper wallet – printing out the Bitcoin private keys and addresses, and not keeping them on a computer at all.) Hackers can also target Bitcoin exchanges, gaining access to thousands of accounts and digital wallets where bitcoins are stored. One especially notorious hacking incident took place in 2014, when Mt. Gox, a Bitcoin exchange in Japan, was forced to close down after millions of dollars worth of bitcoins were stolen.
This is particularly problematic once you remember that all Bitcoin transactions are permanent and irreversible. It's like dealing with cash: Any transaction carried out with bitcoins can only be reversed if the person who has received them refunds them. There is no third party or a payment processor, as in the case of a debit or credit card – hence, no source of protection or appeal if there is a problem.
Insurance Risk
Some investments are insured through the Securities Investor Protection Corporation. Normal bank accounts are insured through the Federal Deposit Insurance Corporation (FDIC) up to a certain amount depending on the jurisdiction. Bitcoin exchanges and Bitcoin accounts are not insured by any type of federal or government program.
Risk of Bitcoin Fraud
While Bitcoin uses private key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false bitcoins. For instance, in July 2013, the SEC brought legal action against an operator of a Bitcoin-related Ponzi scheme.
Market Risk
Like with any investment, Bitcoin values can fluctuate. Indeed, the value of the currency has seen wild swings in price over its short existence. Subject to high volume buying and selling on exchanges, it has a high sensitivity to “news." According to the CFPB, the price of bitcoins fell by 61% in a single day in 2013, while the one-day price drop in 2014 has been as big as 80%.
If fewer people begin to accept Bitcoin as a currency, these digital units may lose value and could become worthless. There is already plenty of competition, and though Bitcoin has a huge lead over the other 100-odd digital currencies that have sprung up, thanks to its brand recognition and venture capital money, a technological break-through in the form of a better virtual coin is always a threat.
Bitcoin's Tax Risk
As bitcoin is ineligible to be included in any tax-advantaged retirement accounts, there are no good, legal options to shield investments from taxation.
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Related Terms
Satoshi
The satoshi is the smallest unit of the bitcoin cryptocurrency. It is named after Satoshi Nakamoto, the creator of the protocol used in block chains and the bitcoin cryptocurrency.
Chartalism Chartalism is a non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Satoshi Nakamoto The name used by the unknown creator of the protocol used in the bitcoin cryptocurrency. Satoshi Nakamoto is closely-associated with blockchain technology.
Bitcoin Mining, Explained Breaking down everything you need to know about Bitcoin Mining, from Blockchain and Block Rewards to Proof-of-Work and Mining Pools.
Understanding Bitcoin Unlimited Bitcoin Unlimited is a proposed upgrade to Bitcoin Core that allows larger block sizes. The upgrade is designed to improve transaction speed through scale.
Blockchain Explained
A guide to help you understand what blockchain is and how it can be used by industries. You've probably encountered a definition like this: “blockchain is a distributed, decentralized, public ledger." But blockchain is easier to understand than it sounds.
Top 6 Books to Learn About Bitcoin About UsAdvertiseContactPrivacy PolicyTerms of UseCareers Investopedia is part of the Dotdash publishing family.The Balance Lifewire TripSavvy The Spruceand more
By Satoshi Nakamoto
Read it once, go read other crypto stuff, read it again… keep doing this until the whole document makes sense. It’ll take a while, but you’ll get there. This is the original whitepaper introducing and explaining Bitcoin, and there’s really nothing better out there to understand on the subject.
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party

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The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to Anarcho_Capitalism [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoCluster [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to Bitcoin [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoCurrencyTrading [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoPolice [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to btc [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to ICOAnalysis [link] [comments]

Accused Broker in NY Ponzi Scheme Stays in Jail Etherium and Bitcoin - Cryptocurency PONZI SCHEME? Is Bitcoin a Pyramid or Ponzi Scheme? Fact: Bitcoin Is A Ponzi Scheme Bitcoin is NOT a Ponzi scheme.  MaiView  20190719

The pyramid scheme that lured new money into this scam is collapsing. When will bitcoin reach $0? I don’t know, although I did predict in another column that it would before the end of this year. A ponzi scheme is a fraud in which early investors are lured with massive payouts based on how many people they invite into a business that is designed to cheat people. You may have heard this many times before where certain schemes encourage you to invite 3 other investors promising […] Top Cryptocurrency Ponzi Scams as of 2020 - Real-time cryptocurrency market news including Bitcoin ... OneCoin: Class Action Demand By $103K Investor. A class action document filed May 7 at the US Southern District Court of New York brings multiple charges against four executives behind OneCoin: brother and sister duo Konstantin Ignatov and Ruja Ignatova, Sebastian Greenwood and Mark Scott.. All were instrumental to the scheme’s global reach, which, plaintiff Christine Grablis claims, fooled ... However, unlike a pyramid scheme, Bitcoin doesn’t require new investors to sustain itself. As explained by respected, anonymous Bitcoin researcher Hasu: “The expected value of a pyramid scheme decreases the later we are in the adoption cycle. But the expected value of a network good, like money, increases as it becomes more useful and more ... The Bank of New York Mellon (BNY Mellon) allegedly played a role in the $4 billion Ponzi scheme OneCoin. According to a filing by investors Donald Berdeaux and Christine Gablis, BNY Mellon has been accused of playing a “central role” in the OneCoin scam that defrauded investors of more than $4 billion in cryptoassets.

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Accused Broker in NY Ponzi Scheme Stays in Jail

This video breaks down why bitcoin is a ponzi scheme, why it's price fluxates, and why $100,000 bitcoin will NEVER happen. If you like my work, please considering donating to my PayPal or becoming ... Like the show? Donate Bitcoins: 1LAYuQq6f11HccBgbe6bx8DiwKwzuYkPR3 Today is November 23, 2014 Bitcoin is not a ponzi scheme. A ponzi scheme, named after Char... Lachief shall not be liable to the participant for any damages, claims, expenses or losses of any kind (whether direct or indirect) suffered by the participant arising from or in connection with ... A federal judge has ruled that the owner of a New York investment firm accused of running a $370 million Ponzi scheme is entitled to bail. But he says a defense offer of a $750,000 bond, for ... In this video, I discuss whether or not Bitcoin is a Pyramid scheme or a Ponzi scheme. I conclude that it is neither, simply because: 1) Bitcoin is decentralized, not run by a corporation or ...

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