TronWeekly

Crypto World News

You are here: Home / Search for "fraud"

Search Results for: fraud

Crypto Fraudsters Have Now Crept Into LinkedIn; One User Lost $288K

by

Scammers are now infiltrating leading job portals LinkedIn and targeting users through cryptocurrency investment schemes. In a recent interview FBI’s special agent Sean Ragan called it a “significant threat” to the platform and consumers.

Fraudsters usually get in touch with victims by posing as a professional, luring the user with attractive returns through a crypto investment. They then steer the latter to drop funds in a site controlled by them. And the funds are promptly drained from the account.

One Florida native Mei Mei Soe revealed how she lost her entire life savings to the tune of $288,000 to a scammer on LinkedIn. “It began with the person asking me if I’m on LinkedIn for professional networking or if I’m looking for a job,” Soe said.

The conversation eventually shifted to investment, Soe continued. “He showed me how he’s profiting from his investments and told me I should start investing with crypto.com which I know is a legitimate website. I started with $400.”

The fraudster directed her to move her holdings to a site he controlled. Over the course of several months, Soe made a total of nine transactions. Soon, she found out that the person isn’t the one he claims to be. And before she could do anything, Soe lost all of her funds.

Crypto Scammers Often Use Social Media As Their Launchpad

Acknowledging that there has been a rise in fraud cases on its platform, LinkedIn released a statement,

“We work every day to keep our members safe, and this includes investing in automated and manual defenses to detect and address fake accounts, false information, and suspected fraud. If a member encounters or is the victim of a scam we ask that they report it to us and to local law enforcement.”

Crypto.com said it immediately takes down accounts that it finds are linked to a scam.

According to research conducted by US Federal Trade Commission on June 3, scammers took away $1 billion in cryptocurrency last year, an increase of more than five times from 2020 and over a sixty-fold jump from 2018.

The majority of these attacks exploited social media platforms, TronWeekly reported.

Terraform labs employee investigated by S.Korean police for alleged BTC fraud

by

According to a Korean news site, the Seoul Metropolitan Police Agency is reportedly initiating an investigation against a Terraform labs employee who allegedly embezzled Bitcoin, LUNA and Terra company cash, following the disappointing utter collapse of original Terra.

According to the report, the police received information in the preceding period that a person suspected of being a Terraform Labs employee was embezzling business assets, so they sought that the funds be frozen using a virtual currency exchange and then launched an investigation.

Screenshot 37

However, it has been stated that the link between Terraform Labs CEO Kwon Do-hyeong and embezzlement has yet to be established. A police official said,

“It was intelligence about an employee’s personal embezzlement.”

Furthermore, separately, the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors’ Office had also received and is interpreting evidence of possible violations of the Act on the Regulation of Fraud and Similar Receipts under the Act on the Aggravated Punishment of Specific Economic Crimes, including allegations against CEO Kwon.

Terra’s biosphere crumbled after the Terra UST depegging in May. After a sharp price drop, the original LUNA lost all of its value, causing billions of dollars in losses. Changpeng Zhao, Binance’s CEO, said that the company lost $1.6 billion on its LUNA investment.

New Terra blockchain under-performs

The new Terra blockchain, which has only been operational for a week, is already falling short of expectations. Terra 2.0 went live on May 28 as part of Terra co-founder Do Kwon’s community-approved “Terra resurrection” strategy. The original Terra blockchain was abandoned after its collapse and rebranded as Terra Classic.

LUNA 2.0 got off to a shaky start, losing about 70% of its value in the first 24 hours, as many had predicted. Since then, the price of the LUNA 2.0 coin has remained unchanged. LUNA was trading at $4.49 at the time of publication, down 15.55 percent in the last 24 hours, according to CoinMarketCap statistics. The previous LUNA was trading for around $86 when the TerraUSD (UST) stablecoin lost its dollar parity on May 6.

Cryptocurrency fraud at an all-time high?

by

Yet another cryptocurrency fraud has come to light. The US Department of Justice reported Friday, 6 May 2022, that Mining Capital Coin CEO and founder Luiz Capuci Jr. was charged with reportedly masterminding a $62 million global investment fraud scheme using his putative crypto mining and investment platform.

1585345917231
Mining Capital Coin CEO and founder Luiz Capuci Jr.

However, after being charged with a slew of offenses including wire fraud, money laundering, and securities fraud, Capuci faces a maximum jail sentence of 45 years.

Capuci and co-conspirators are accused of defrauding investors of $62 million by the US authorities. Mining Capital Coin claimed to have invested in cryptocurrency mining and trading, but that was not the case. He reassured investors that the company had a large network of mining operations that could deliver consistent profits.

Capuci also pitched investors on the company’s trading bots, stating that they were created by leading programmers from around the world.

According to federal authorities, Mining Capital Coin was a regular pyramid scheme. The cash collected from investors was never invested in any of the aforementioned projects. Capuci, according to federal authorities, transferred the stolen monies to his bitcoin wallets without fulfilling the company’s pledges.

According to Kenneth Polite Jr., associate attorney general for the criminal division of the United States Department of Justice, unlawful cryptocurrency schemes damage the young industry, and the agency is dedicated to combating financial crime.

The art of scamming cryptocurrency or vulnerability of being scammed?

Lack of regulation, rapidity of transactions, irreversibility of trades, and disguised identities are all positive qualities of the crypto world, according to the hype. Crypto fanatics believe that bypassing banks, regulators, and rules is the only way to improve finance. When it comes to your assets, however, faster and looser isn’t necessarily better. It’s a surefire way to have your money stolen from you.

The CEO of an unnamed South Korean bitcoin exchange was arrested last week on suspicion of spying for North Korea. Satish Kumbhani, the co-founder of BitConnect, was indicted by a grand jury in late February on several charges.

Crypto is all about moving money rapidly. It’s also at the heart of any well-planned fraud scheme. Cryptocurrency can also be moved swiftly and washed to prevent notice once obtained.

Here’s how cryptocurrency fraud will be curbed by council of Europe

by

In a report released Wednesday, the Council of Europe’s Moneyval committee urged European countries to crack down on cryptocurrency-enabled money laundering.

Moneyval, which checks compliance with dirty-money regulations in smaller European countries, has warned of the dangers posed by decentralized finance, privacy coins, and what it claims is market manipulation of big cryptocurrencies. In a preface to the report, Moneyval Chair Elzbieta Frankow-Jaskiewicz stated that the research extends beyond drug trafficking to topics such as fraud, corruption, and tax evasion. She further added,

“It is well known that money launderers have been abusing cryptocurrencies from their inception a decade ago. Methods are becoming ever more sophisticated, and larger in scale.”

The advisory group joined standard-setters such as the Financial Action Task Force (FATF) in advocating for a more stringent approach to cryptocurrency. Some in the sector have cautioned that controversial FATF requirements to recognize cryptocurrency users and allow funds to be tracked, which are now being implemented in jurisdictions like the EU, could threaten privacy and innovation.

The rapid evolution of technology, which frequently stretches across numerous jurisdictions, presents a challenge to regulators, according to the research, which calls for increased regulation and supervision as well as improved coordination across national agencies. It added that a study anticipated later this year will look into bitcoin laundering tendencies.

Moneyval is in charge of overseeing the mainly smaller European jurisdictions that are not supervised by the FATF in Paris, such as fintech hotspots Malta, Gibraltar, and Estonia.

Could EU cryptocurrency laundering plans overwhelm authorities?

New European Union proposals to monitor crypto transactions using unhosted wallets could violate international money laundering authorities’ risk-based approach, according to an official from the bloc’s own banking body. The European Commission’s policymakers also cautioned that any decision to eliminate the 1,000-euro limit for detecting cryptocurrency payers must be supported by evidence.

download 2

The debate rages on, with industry data claiming that only 0.15 percent of cryptocurrency transactions contain illegitimate addresses, according to Chainalysis. Some lawmakers, on the other hand, argue that it’s far too easy to split up a large digital payment into several smaller portions in order to get around any regulatory restrictions.

HMRC seized NFTs for the first time from $1.8m fraud case

by

Three non-fungible tokens (NFTs) have been seized by the UK tax department HMRC as part of an investigation into a potential VAT fraud operation involving 250 fictitious firms.

On Monday, HM Revenue and Customs said that the NFTs had been confiscated and that three persons had been detained on suspicion of attempting to swindle the government of £1.4 million. It’s the first time an NFT has been confiscated by a UK law enforcement body.

HMRC setting an example

The NFT confiscation “serves as a message to anyone who believes they can use crypto assets to hide money from HMRC,” said Nick Sharp, HMRC’s deputy director of economic crime.

“We continually adapt to new technologies to guarantee that we stay up with how criminals and evaders attempt to hide their assets,” he added.

HM Revenue Customs

HM Revenue and Customs announced that it had obtained a court order to take three digital artwork NFTs, which have yet to be appraised, as well as other crypto-assets worth around £5,000.

According to them, the suspects employed “advanced tactics to try to mask their identity, including fictitious and stolen identities.”

While the tax authority’s public warning is standard, it’s important to highlight that the confiscated digital assets and NFTs were taken as assets, as is typical in tax evasion cases for authorities to compensate for losses after court procedures. These confiscated digital assets and collectibles were not utilized in any criminal activity.

NFTs peaked in popularity in 2021 and have since been a popular trend among companies and the general public.

According to Jake Moore, a cybersecurity expert at ESET, the seizure demonstrated that authorities are quickly adjusting to the danger of cybercrime and how to capture digital assets meant to elude law enforcement.

“A key element of cryptocurrencies’ design is to keep them secure and protected against interception by anyone, whether that be a threat actor or law enforcement,” Moore said. “But with a fast-moving digital world where mistakes can be made, police forces are beginning to buck the trend in how they investigate digital crime, locate evidence, and finally seize digital assets.“

Last year, the market for NFTs expanded to an estimated $22 billion (£16 billion). There is no doubt that the growing popularity hints at a rise in scams and exploits.

Bithumb falls into troubled waters after Thai partner calls out exchange for fraud

by

A popular South Korean cryptocurrency exchange, Bithumb, is slapped with a lawsuit by a former partner based in Thailand.

Cryptocurrency exchanges have found their way below the crypto spotlight. As more people flocked into the market, exchanges were kept busy all the time. The increased demand for crypto this year further agitated this trend. Moving over the surge in popularity, a major crypto exchange fell under the purview of Hong Kong officials for breach of contract as well as fraud.

Back in 2018, Bithumb had reportedly rolled out a platform in Thailand. This platform, however, did not garner any support from the exchange, further paving the way for immense damages to the Thailand firm. While the firm’s name remains under the wraps, it had decided to sue the South Korean exchange for backing out.

Bithumb could be sued for breach of contract

As per a recent report by the Korea Times, the Thailand partner has been prepping to sue Bithumb Global Holdings, GBEX, and the executives involved.

Even though the BXA coin never made the cut, it was speculated that the platform was trying to sell BXA coins through its Thai partner. The former Thai partner elaborated on the same and pointed out that once the exchange pulled the plug on the BXA business, the Thai platform became unnecessary. This further caused the closure of the Thai firm and also some “serious damage.”

The spokesperson added,

“BGH and GBEX collectively own a 49-percent stake in the joint venture in Thailand, and are wholly-owned subsidiaries of Bithumb Korea, so we sued Bithumb Korea’s executives last year and decided recently to file lawsuits in Hong Kong against the Hong Kong subsidiaries and their executives, who are related to this issue more directly.”

The BXA coin put the exchange in the wrong light. The Seoul Metropolitan Police Agency’s Intelligent Crime Investigation Unit officers even went on to raid the exchange’s headquarters in Gangnam back in September 2020.

Bitcoin bull and Mexican billionaire says “Fiat is Fraud”, calls it “stinky”

by

Bitcoin has garnered significant support from people all over the world. Mexico’s third-richest man Ricardo Salinas Pliego, who also happens to be the 166th richest person in the world, is the latest personality to have come forward to appreciate the cryptocurrency.

The founder and chairman of Grupo Salinas, made waves after he said that “fiat is fraud” and calling it “stinky”. In a recent interview, that was shared on Twitter by well-known investor and BTC proponent Anthony Pompliano, the billionaire was heard saying that the finite supply of Bitcoin, the 21 billion supply, is the key part.

“I have invested a lot of time studying [Bitcoin] and I think it’s an asset that should be part of every investor’s portfolio. It’s an asset that has enormous value, international value, that is traded with enormous liquidity at a global level and that is enough reason for it to be a part of every portfolio, period.”

Bitcoin Bull: “Fiat is stinky”

The Bitcoin bull was, however, not very confident about the second-largest cryptocurrency, Ethereum, and cast doubt on its potential due to the lack of a limit on the amount of ETH issued. He speculated that “they [could] emit more and the asset depreciates. Salinas also factored in the hyper-inflation over the last three decades that has ripped apart several country’s economies and added,

“Fiat is fraud. Look I started my career in 1981. The Mexican Pesos was 20:1 [USD]. Today, we are at 20,000:1. Don’t tell me. And that is in Mexico, but if we look at Venezuela, Argentina or Zimbabwe, the numbers lose all proportions.”

He went on to say that the US Dollar as hard money is a joke and that he wants to hold Bitcoin over the next 30 years.

Additionally, Salinas also said on Sunday that his banking business may start using Bitcoin. If this does come true, then it would become the country’s first bank to commence accepting the cryptocurrency.

SEC Charges Three Persons in Digital Asset Frauds of Over $11 Million

by

The US Securities and Exchange Commission [SEC] has charged three individuals on the 1st of February with defrauding hundreds of retail investors of $11.4 million via the 2018 B2G token offering advocated by Hollywood actor Steven Seagal.

The accused were involved with the now-defunct crypto projects called Bitcoiin2Gen which was the 2018 initial coin offering for the Steven Seagal-promoted altcoin and Start Options.

Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit was quoted saying,

“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”

According to SEC’s complaint, Kristijan Krstic, the founder of Start Options and Bitcoiin2Gen, and John DeMarr, the primary U.S.-based promoter for these firms, fraudulently persuaded the investors to purchase digital asset securities from approximately December 2017 through May 2018.

The US watchdogs further alleged that Krstic and DeMarr also claimed Start Options’ purported digital asset mining and trading platform from December 2017 through late January 2018.

The SEC further noted that the two individuals in question allegedly went on to assert that that Start Options was “the largest Bitcoin exchange in euro volume and liquidity” among other claims and also promoted Bitcoiin2Gen’s unregistered initial coin offering [ICO] of digital asset securities known as B2G tokens.

The third individual in the SEC’s complaint was Robin Enos who worked with DeMarr and was accused of drafting sham promotional materials that Enos had known would be circulated to the investors. It further noted that the fraudulent materials included several fake statements including that the B2G tokens would be deliverable on the Ethereum blockchain, that the invested funds would be utilized to develop a cryptocurrency that was “mineable,” and that the tokens would be tradeable on a proprietary digital asset trading platform at the platform’s supposed ‘launch’ in early April 2018.

“In reality, the complaint alleges, these claims about the B2G tokens were false, Bitcoiin2Gen was a sham, and Krstic and DeMarr allegedly misappropriated millions of dollars of investor funds for their own personal benefit.”

CFTC Charges NY-based Crypto Trader ‘Coin Signals’ With $5M Fraud

by

The U.S. Commodity Futures Trading Commission [CFTC] filed a civil enforcement action on the 26th of January against New York-based crypto trader Jeremy Spence alleging fraud for operating a Ponzi scheme involving digital assets such as Bitcoin and Ethereum.

CFTC Unveils Civil Fraud Charges

CFTC’s complaint alleged that Spence fraudulently solicited more than $5 million of investments from individuals in a cryptocurrency investment scheme. Acting Director of Enforcement Vincent McGonagle stated,

“Fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital asset markets and cheat customers out of their hard-earned money. We will continue to work to protect participants in our markets from fraudulent practices and hold fraudsters accountable.”

The 24-year old cryptocurrency trader was arrested by the FBI in Rhode Island on Tuesday morning on charges of wire fraud as well as commodities fraud that have maximum sentences of up to 30 years combined.

According to prosecutors and the CFTC, Spence’s trading allegedly led to massive trading losses for his investors and his payouts of what was supposed to be the profits of the clients were, in fact, misappropriated funds of other customers.

The complaint also stated that Spence had previously reported false account balances to his investors in a bid to thwart redemptions. And in a classic Ponzi-like fashion, used money from new investors to pay back his earlier investors.

In addition, Spence allegedly engaged in numerous efforts to hide his misconduct, including misrepresenting his trading profitability and the number of assets he had under management, misappropriating customer funds, and issuing fictitious performance statements.

As per CFTC’s complaint, Spence admitted to his customers that he had been involved in ‘lies and deceit.’

Back in 2018, a Florida-based law firm called Silver Miller had filed a class-action lawsuit against Spence who was operating under the moniker ‘Coin Signals’.

Manhattan U.S. Attorney Audrey Strauss, in an official statement, alleged that Spence lured investors to his cryptocurrency investment scam by claiming returns of up to 148% which resulted in a $5 million void in his customer’s accounts. Strauss further added,

“Spence’s alleged conduct should strongly signal would-be investors to thoroughly educate themselves in the cryptocurrency ecosystem before falling prey to investment scams promising huge returns for small investments that are indeed too good to be true.”

SEC Charges Crypto Fund Manager With Fraud; Obtains Emergency Asset Freeze

by

The US Securities and Exchange Commission [SEC] revealed filing an emergency action as well as obtaining an order to impose an asset freeze and other emergency relief against quantitative trading firm Virgil Capital in Manhattan federal court.

Its affiliated companies were also included in connection with an alleged securities fraud relating to Virgil Capital’s flagship cryptocurrency trading fund, Virgil Sigma Fund LP.

According to the official release, Stefan Qin, the 23-year-old Australian hedge fund founder, Virgil Capital, has been accused by the SEC and his entities of defrauding investors in the Sigma Fund since at least 2018 by making material misrepresentations about the fund’s strategy, assets, and financial condition.

Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit stated,

“This emergency action is an important step to protect investor assets and prevent further harm. Qin allegedly made false promises to lure investors and then continued his deception to conceal his misuse of investor funds.”

The SEC complaint also alleged that Qin and the entities “misled” investors to believe their money was being used only for cryptocurrency trading based on a proprietary algorithm, while the defendants, in fact, utilized the funds for investment proceeds for personal purposes or for other undisclosed high-risk investments.

Furthermore, SEC also stated in its complaint that Qin and Virgil Capital have told investors who requested redemptions from the Sigma Fund that their interests would be transferred instead to another fund under the ultimate control of Qin but with separate management and operations, the VQR Multistrategy Fund LP.

Despite the requests, the complaint claimed that no funds were transferred to the investors and the redemption requests remained outstanding and that Qin attempted to misappropriate assets from the VQR Fund and to secure new investments in the Sigma Fund.

According to reports, Sean Hecker and Shawn Crowley of Kaplan Hecker & Fink were representing Qin. In an official statement, the law firm went on to say that Qin intends to fully cooperate with the regulator to provide a “fulsome set of facts” and was “committed to ensuring that no investors are harmed.”