Showing posts with label featured. Show all posts
Showing posts with label featured. Show all posts

Inside The Final Days Of The $3 BILLION Chinese Crypto Scam... And There's ANOTHER One Soon To Collapse!

PlusToken scam

Remember Bitconnect? Well, the scammers behind PlusToken would call that child's play.

Bitconnect held the record as the largest crypto scam to date, pulling in around $1 billion - then came PlusToken which grew to 3X that size, and showed no signs of slowing down when they pulled the plug.

But you've probably never heard of it. The ponzi scheme targeted Chinese traders almost exclusively, and managed to remain fairly unknown throughout the English speaking cryptocurrency community.

Considering a ponzi scheme's growth relies completely on word of mouth, that language barrier played a huge role in it not breaking into the US or European markets.

One post on the Bitcointalk message boards shows a perfect example of the disconnect between the Western and Asian crypto communities, where one user asks "Is it legit?" - the responses are generally people who haven't heard of it, and just one person promoting it. The thread ends with the official news that PlusToken has disappeared with everyone's money.

An estimated 10 million people scammed out of over $3 billion...

You won't find a Chinese crypto fan who doesn't know a dozen people who were caught up in it, which isn't surprising when you hear the scammers held over $3 billion worth of cryptocurrency when shutting down operations and attempting to disappear.

New pieces of the investigation have just been shared with the Global Crypto Press, giving a glimpse into the last days of PlusToken as the scammers behind it panic and attempt to clean their crypto, and erase the trail leading from their victims to themselves.

Scrambling to erase that trail they flooded Bitcoin mixers with upwards of 50,000 BTC (a mixer swaps coins between random anonymous users, juggling them internally before finally sending cryptocurrency back to the user, causing the coin to become untraceable.)

But the volume of coins they needed to clean was far beyond what these mixer sites are able to process, if there isn't an equal amount of coins being sent to the mixers by other people, they're just swapping coins with themselves.

That's when they took to exchanges with higher volume such as Huobi and Bittrex, attempting to manually mix them themselves.  The hope was that they could sell dirty coins while buying up clean ones - but anyone experienced with blockchain technology could tell you, this isn't a great plan.  Adding a couple entries to the ledger, and falling extremely short of 'hiding their trail'.

This is where everything fell apart. The coins they were trading on exchanges led right to their origins. At this point, it didn't matter anyway.

Because what the PlusToken leaders didn't know, is that they were already being watched.

This becomes clear looking at the timeline starting June 27th, the date when users began reporting that their funds were no longer accessible and the PlusToken platform was down. Just 5 days later on July 2nd, Chinese authorities announced 6 people behind the scam were already behind bars.

Funds currently accounted for include 50,000 BTC sent through mixers, 35,000 floating around the market, and 20,000 sitting in wallets still untouched.

Security audit firm Peckshield created this visual aid showing PlusToken's fund distribution.

 Authorities are still searching for additional key figures behind the scam who fled China before arrests could happen.

Scammers know - you can't trust a scammer.

In a twist of irony, those who escaped arrest are unable to spend any of their earnings. Out of fear they could end up turning on eachother, the wallets holding the scammed crypto uses multisig.

Multisig means it requires keys from more than 1 person to unlock, so if some members of the criminal group are in prison while others are free - everyone is locked out.

This includes the Chinese government, so you can be sure they're aggressively hunting down anyone who could possess one of the private keys needed to unlock the PlusToken wallets.

If this wasn't enough - there's another one coming!

An unexpected find while investigating PlusToken - an alarming number of people who were promoting it were also recommending another, called 'CloudToken'.

Clearly, yet another ponzi scheme that's spreading fast through Chinese social media.

I also noticed that for many, PlusToken served as a wakeup call.  Ignorant users who were once blindly excited about promises of 10% monthly profits (120% per year, like I said - clearly a scam) are now beginning to ask the right questions - such as 'how?".

But for now, CloudToken is flying high - partying hard like they're using Bitconnect 2017 as their guide.

When the day comes, tracking down the people behind CloudToken won't be a challenge - he goes by 'Ronald Aai' and he just couldn't resist the spotlight. 

I was unable to locate any trustworthy data on CloudToken to estimate how bad it will be when it comes crashing down, but based purely on levels of chatter - if PlusToken held $3 billion, I would guess CloudToken holds around $1 billion.

Closing Thoughts...

It seems like every geographical area, divided by language differences, will experience some kind of crypto scam of their own.

The victims of today become the people who warn others in the future.  But you don't get an army of anti-scammers until a lot of people get scammed.

The mixture of excitement and confusion surrounding cryptocurrency has proven to be the perfect target for these awful, scum people - and as much as I wish I could wrap this piece by sharing the simple solution, I don't think one exists. I think it may just be an unavoidable bump in the road for every new market crypto breaks into.  Warn people if the opportunity presents itself, but they may just have to learn the hard way - if it's too good to be true.. you probably already knew.

Author: Ross Davis
E-Mail: Twitter:@RossFM

San Francisco News Desk

After years of hurling insults and slander at Coinbase, Ripple fans celebrate victory! A look back on how it all went down...

It's official - the 'XRP Army' has won the war - CoinBase has decided to list their favorite token! While everyone is best friends now, 48hrs ago it was a different story... seriously, about as different as a story can be.

Anyone who's in crypto, and on Twitter, has undoubtedly been subjected to seeing every Tweet posted by, or related to Coinbase or their leadership, get totally taken over by the 'XRP Community'  aka 'XRP Army' as they absolutely ripped Coinbase apart.

It became so bad, i'm somewhat shocked Coinbase added them, and now we finally know the trick to get a coin listed - verbally assault them daily on social media.

While the XRP community celebrates their official listing on Coinbase - I thought it would be fun to look back at all the good times!

If you're part of a project with a token and dream about one day being listed on Coinbase - take notes, this is how it's done...

What else is there to say? It worked!

So... good job?

Author: Oliver Redding
Seattle News Desk

Full Length Documentary: What happens when 850,000 Bitcoins go missing? The unbelievable true story...

In 2015 a man is escorted his home in Tokyo by authorities. Hours later, he's indicted and imprisoned for forgery of computer data and embezzlement in connection with the disappearance of 850,000 Bitcoins. At the time, the equivalent of approximately a half billion dollars.

By the end of 2018 those coins would be worth a staggering $16 Billion+...

This is the series of events that brought him to this point.

US Government recovers and returns stolen BTC to Bitfinex... but only 28 out of the 120,000 total.

Back in August of 2016 Bitfinex fell victim to one of the worst hacks among the more 'mainstream' exchanges when the hackers got away with stealing a total of 120,000 BTC.

Today the US Government returned (almost) 28 of them (27.66 BTC) as the result of "law enforcement efforts". No additional details have been provided from US officials.

My best guess at what happened - they arrested someone who sold something to the actual hackers, but not the hackers themselves.

At it's peak the tokens would have been worth nearly $228 million.

Bitfinex has just shared the following press release:

Since the well documented hack in 2016, Bitfinex has collaborated with international law enforcement agencies to provide intelligence and assist with investigations. Bitfinex was alerted in November 2018 that the U.S. government had obtained bitcoins believed to be proceeds from the 2016 hack.

Bitfinex has now retrieved 27.7 BTC and, further to the recovery strategy outlined in the aftermath of the hack, this is being converted to USD and paid to RRT (Recovery Right Token) Holders.

RRTs and Bitfinex’s Hack Recovery Plan: Following the theft on August 2nd 2016, Bitfinex took a unique approach, generalising the losses across all accounts and crediting BFX tokens to customers at a ratio of 1 BFX to 1 dollar lost. Bitfinex honoured its commitment to repay the losses. Within eight months of the security breach, all BFX token holders had their tokens redeemed at 100 cents on the dollar or exchanged their tokens for, directly or indirectly, shares of the capital stock of iFinex Inc. All BFX tokens were destroyed within this process. Additionally, Bitfinex created a tradable Recovery Right Token (RRT) for BFX holders that converted BFX tokens into shares of iFinex.

The benefit to RRT holders is that in the event of any retrieval of the stolen property, and after any outstanding or unconverted BFX token holders have been reimbursed, recovered funds are distributed to RRT holders, up to 1 dollar per RRT. As all BFX tokens have been redeemed and destroyed, the full amount of recovered bitcoins today is being distributed pro rata to the RRT holders.

“Over two years following the hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government. It gives us great pleasure to be able to reimburse our traders that were loyal to us and believed in us at a very difficult time. We would like to thank U.S. federal law enforcement agencies for their ongoing efforts to investigate the security breach and their commitment to seizing and returning stolen assets.

We will continue to assist law enforcement with their inquiries, and also once again extend an open invitation to the hackers, or anyone harbouring information pertaining to the breach, to make contact in whichever medium they feel most secure with, to finally resolve the situation in a mutually beneficial manner.” says Bitfinex CFO Giancarlo Devasini

Author: Mark Pippen
London News Desk

CME Group CEO Terry Duffy says governments need to accept that cryptocurrencies are here, has a laugh at JPMorgan suddenly becoming pro-crypto...

Terry Duffy says "governments need to accept that cryptocurrencies are here" - a reference to the point that virtually everyone on Wall Street is making - finalize the rules so everyone can participate!   He also chuckles at JPMorgan's sudden interest in cryptocurrency after their past statements against it. (This part of the discussion begins at 9:30) 

SEC Commissioner's first remarks on the Token Taxonomy Act - the bill that would remove SEC oversight from most tokens, soon to be introduced in Congress...

We've been closely following the Token Taxonomy Act, a bill that would free most cryptocurrency tokens from being labeled a "security" - which would also then remove the Securities And Exchange Commission's authority over them.  Read about that here.

In a speech given Friday at the University of Missouri School of Law, SEC commissioner Hester M. Peirce mentioned the bill for the first time - and to my surprise, she doesn't seem against it - even going as far as to cite several examples against classifying them as securities.

"Congress may resolve the ambiguities engendered by Howey by simply requiring that at least some digital assets be treated as a separate asset class. Congressmen Warren Davidson and Darren Soto recently introduced a bill in the House intended to amend the federal securities laws to do just that, provided that the token truly operated in a decentralized network.

Such an approach would facilitate more tailored disclosure. Indeed there are others who have argued that, whether ICOs can fit within the definition of a securities offering does not answer the question of whether that is how we should regulate them. In a forthcoming paper, Georgetown Law professor Chris Brummer and his co-authors argue that ICOs have certain features that make the regulatory framework applicable to IPOs inappropriate. For example, changes to the blockchain may have outsized effects on certain tokens that depend on it. An investor may need to understand, for example, how the blockchain can be changed, and how those changes would affect the relevant token before she could fully appreciate the risks of investing in that crypto asset."

If you listened to her speech you may not have immediately made the connection, that 'recently introduced bill' is the Token Taxonomy Act, this was made clear when the speech was published on the official SEC website with citations and mentioned by name in the footnotes.

Evaluating the nature of her statements it seems she actually shares in the same frustrations as everyone else - if you're in America and dealing in cryptocurrency as a business, trader, or regulator - you're sick of the uncertainty and confusion the current legal framework provides.

An initial concern of mine was that opposition to the bill would come from the SEC with the intent of influencing the votes of Congress and that the SEC was viewing the Token Taxonomy Act as an attack on the work they've done so far.

But instead, she acknowledged  'the ambiguities' that come with applying the Howey test, the standard method used to answer the question of 'is this a security?'.

Congressman Warren Davidson calls current regulations 'sloppy'.

The author of the bill, U.S. Rep. Warren Davidson began seeking this clarification in a letter written by him and co-signed by a total of 11 fellow congressmen, Republican and Democrat, in that letter he stated:

"We believe the SEC could do more to clarify its position. Additionally, we are concerned about the use of enforcement actions alone to clarify policy and believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies in the United States to be unnecessarily fraught."

It seems the SEC would like that clarification too - which is probably why they've struggled to provide it. When the government body in charge of enforcement seeks clarification, providing it becomes the duty of lawmakers.

Another factor worth noting that I haven't touched on in previous articles -  the rise of actual security tokens!

It seems like there's a new 'STO' project announced every day that planning to release a token that also represents some kind of equity in the company behind it. That's going to be more than enough to keep the SEC busy, and even under the Token Taxonomy Act these will remain classified as securities.

It's clear as can be - from traders to regulators, the time to bring everyone the regulatory clarity they need is now. Add all this to my list of reasons I believe this bill will pass - I wrote an in-depth look at why I think it will be met with approval each step of the way here.

The SEC Commissioner's speech can be read in full here.

Author: Ross Davis
E-Mail: Twitter:@RossFM
San Francisco News Desk

Chevron joining Shell and other major oil companies on JPMorgan backed blockchain-powered commodity platform Vakt...

This is really becoming a powerhouse of well known multi-billion dollar companies turning to blockchain as a way to improve things that they've been doing for decades.

In addition to consistently adding participants, last year VAKT joined the Enterprise Ethereum Alliance, the world's largest open source blockchain organization.

Announced today - Chevron will be joining Shell as the second US Based supplier, along with Total, and Reliance Industries.

Already on board was BP, Norway’s Equinor,Mercuria Energy Group and Koch and more.

VAKT has found it easy to appeal to businesses, as their platform both boosts the companies ability to track their assets, conduct transactions faster, all while removing what used to take mountains of paper to log. They described their goal at launch as:

"In a unique collaboration, several of the world's largest trading houses, integrated energy companies and banks intend to create and invest in a new venture, which will be managed and operated as an independent entity. The new venture will develop a blockchain-based digital platform intended to modernise and transform post-transaction management of physical energy commodities trading, pending relevant regulatory approvals."

Oil commodities are just the beginning - blockchain powered platforms to increase efficiancy for other sectors such as government, healthcare, energy, pharmaceuticals, are on the way too.
Author: Mark Pippen
London News Desk

Interview with Trump's former head of the Department of Interior, now director at cryptocurrency firm...

After two years as Department of Interior Secretary, Zinke has made the jump to the private sector.  We learned last month that role will be the new managing director of a blockchain and cryptocurrency investment firm.

 The firm is called 'Artillery One' and not a whole lot is known about their revenue stream. Their mission statement says they “advise and funds the next generation of disruptive technologies – connecting capital to these unique opportunities and special situations.”

 They hosted the "Blockchain Innovators Summit"in Pebble Beach last year, and spent $2 million to acquire the Swiss blockchain firm 'Monetas'.

University & city government team up, announce creation of token they'll use to reward good citizens...

Vienna seriously loves blockchain! There's two big programs already announced, the first of them they're calling "digital food stamps" a program which differs from what you may associate those words with if you're from elsewhere, this is a benefit for government employees.

Using an ERC20 token on the Ethereum blockchain, they can spend the food tokens at 800+ locations that have agreed to accept them. 

That program is pretty straightforward, get tokens, spend tokens. The real interesting one is a collaboration with Vienna University of Economics and Business and city government.

Using a token they plan to call "The Vienna Coin" they hope to enable a whole new way for the city to interact with it's citizens.  Tokens could be given out to citizens for a variety of reasons - from riding their bike to work instead of driving, to reporting something that needs repair, even doing charity or volunteer work.

Making the token actually desirable to earn will revolve around insuring there's good places to spend them.  The Vienna-based Research Institute for Cryptoeconomics suggests things like paying for parking and movie tickets.

It's too early for the specifics, Shermin Voshmgir, the head of the Research Institute says:

“We are in a very early design phase in which we are considering together with the City of Vienna what such a Vienna token could look like. It’s about understanding how we can generate a token that adds value for the city.”

Another idea on the horizon is using blockchain to enable citizens to secure their data. "If an agency requires data, the citizen can decide to release it" allowing them to control what they provide to for things like insurance, banking, and health care.

It is my job to ask - once implemented how else could a system like this be used?  Are there any downsides?

Well, in China they have a blockchain-powered system capable of both giving reward 'points' and taking them away as a form of punishment.  If your score goes too low you're banned from things like public transportation.

Theoretically, any system that could be used to reward citizens could be used to more nefarious purposes.  But for now, that's just paranoia.

Author: Mark Pippen
London News Desk