4 years since Quadriga CEO "died".
So how many exchanges are going to fall as a result if this FTX FIASCO?
a good read
I simply would of needed to be full time on posting crytpto failures and frauds - its every day
And it was, but not surprised.
I follow that group on twitter also - still wild west
Yea with the price moving up again odds are we'll start seeing more and more again. According to the following SK estimates over 2 billion stolen since 2017.
TokenGet misappropriated tokens of at least 900 million tokens to four separate wallets without authorization.
I am not even catching all of the frauds and failures but this one looks huge
Quadriga formally put in to bankruoptcy yesterday
Really seems overwhelming - wild west - largely unregulated. AS much as people may not like regulation - they are very valid reasons for it
These are just some from March 2019.
VANBEX scam - Every day at least one story
Canadian police have frozen assets owned by the founders of blockchain services company Vanbex, as part of a fraud investigation into a 2017 initial coin offering (ICO) that raised $22 million.
According to court documents obtained by CoinDesk, the company, led by Kevin Hobbs and Lisa Cheng, raised $30 million CAD (about $22 million) worth of fiat and cryptocurrency through the sale of a token called FUEL.
Vanbex told investors that the token would be usable in a forthcoming smart contract system called Etherparty, and that “the value of the FUEL token would increase dramatically,” says the civil forfeiture action filed in the Supreme Court of British Columbia.
However, Vanbex “developed no usable products” and Hobbs and Cheng “did not intend to develop the products they were marketing but rather [acted] with [the] intention to misappropriate the corporately invested funds raised for their own personal benefit,” according to a filing by the director of civil forfeiture at Canada’s Ministry of Attorney General.
“FUEL tokens became virtually worthless in dollar value while not being capable of use in the non-existent smart contracts system or for any product or service other than a cryptocurrency coin creating service called Rocket,” which was different than what the purchasers were promised, the director claimed.
No criminal charges have been filed so far, and when reached by CoinDesk on Sunday evening, Cheng and Hobbs denied the fraud charges and said Vanbex is cooperating with the investigation.
But in response to the government’s application, Justice J.A. Power on March 14 authorized the government to seize the founders’ two Land Rovers; ordered Bank of Montreal to freeze Hobbs’ two accounts there containing slightly less than $1 million; and ordered him and Cheng not to sell, borrow against or damage their Vancouver condominium for at least 30 days, court papers show.
Some good folks to follow on Twitter regarding Crypto darkside
one of his posts
stats from the updated Missing Crypto timeline:
All Incidents: 120, $6,382,318,000.00
Incidents directly involving BTC: 76, $4,796,282,000.00
Incidents involving Bitcoin, w/ known amt stolen: 60, $4,134,182,000.00, 1,583,591.063 BTC
I think people get hacked because they do not secure enough their wallet with the 2FA system and it's better to choose a platform in the US.
Cryptocurrency is the future; even the bank JP Morgan launches in....IMO .
seems a new one every day
Law enforcement in Mumbai, India have arrested four more suspects allegedly involved in a cryptocurrency scam that amassed an estimated 1 billion rupees (over $14 million). English-language daily media outlet The Times of India reported on the arrests on March 22.
Per the report, the police arrested Ashok Goyal Jaipuria, Asif Malpani, Baljit Singh Saini and Pradeep Arora from Delhi. Several of Goyal’s bank accounts have been reportedly frozen as well, since he is allegedly the head of the scheme. The Times of India also states that an unnamed Bollywood actor who reportedly attended promotional events of the scam will likely be questioned as well.
As Cointelegraph reported last month, Indian law enforcement first exposed the alleged scam and arrested the first four suspects in February, but did not arrest Goyal until recently. The first complaint that led to the prosecution was filed in Surat, a city in the Indian city of Gujarat, by an individual alleging to have been defrauded of the equivalent of nearly $150,000.
I have no idea. Most of them seem sketchy
Remember 2017 when bitcoin was taking over the world
Bitmain in trouble?
thanks Jet for link to others will be my reading tomorrow
According to recent reports, the ASIC mining giant and crypto mine operator Bitmain is currently caught in a downward spiral that could lead to dire consequences for the company. Information available suggests that Bitmain has been firing up to 50% of its staff, laying off an army of Bitcoin Cash developers, and shutting down some of their mining operations. An unconfirmed report from Chinese language media sources even suggests that the current CEO is likely to step down as a result of the chaos. Join us as we go over what appears to be the fall of Bitmain, or at least, the devastating state that the company is in now......
Authorities have arrested one leader on Wednesday of a cryptocurrency project called OneCoin, which prosecutors allege was in fact a pyramid scheme rather than a functional currency. Konstantin Ignatov was arrested on a wire fraud conspiracy charge, while his older sister, Ruja Ignatova, has been indicted for money laundering, and wire and securities fraud, in a document unsealed yesterday. Ignatova is currently at large.
OneCoin, a Bulgaria-based company, was founded in 2014 and still has operations running today, according to the indictment. The company gave users a commission if they could convince others to buy OneCoin cryptocurrency, taking the familiar shape of a multi-level marketing scheme. It claimed to have over 3 million members worldwide, despite having no functional blockchain or public ledger.
Manhattan attorney Geoffrey Berman says in a government press release that the OneCoin leaders created a multibillion-dollar company “based completely on lies and deceit.” In a brief period between 2014 and 2016, OneCoin made €3.353 billion (roughly $3.7 billion) in revenue.
“TAKE THE MONEY AND RUN”
Prosecutors allege that the leaders lied to investors to inflate the value of a OneCoin from half a euro ($0.56) to almost 30 euros ($33.65) as of January this year. In reality, the leaders of the project emailed each other saying that they planned to “take the money and run and blame someone else for this.”
“These defendants executed an old-school pyramid scheme on a new-school platform,” New York County District Attorney Cyrus Vance said in a statement.
US authorities found in their investigation that OneCoin claimed to have a digital ledger for recording cryptocurrency transactions, but there wasn’t a public one that could be verified. In 2015, Ignatova started to give members of her project fake OneCoin tokens to sell, aptly calling them “fake coins.”
“IF YOU ARE HERE TO CASH OUT ... YOU DON’T UNDERSTAND WHAT THIS PROJECT IS ABOUT”
When members of OneCoin recently asked Ignatov when they would be able to cash out on their tokens, he allegedly responded, “if you are here to cash out, leave this room now, because you don’t understand what this project is about.”
OneCoin is known to be potentially fraudulent in various countries, including in the UK, Germany, Finland, India, China, and Bulgaria, as noted by CoinDesk. Many authorities have warned about its behaviors and even attempted to halt the company’s operations.
Mark Scott, another person who assisted in the OneCoin project, was indicted last summer and faces a maximum of 20 years in prison. Ignatov also faces 20 years in prison, while Ignatova faces five separate charges, which could add to up a maximum of 85 years in prison if she’s found guilty on all counts.
Quadriga or QuadrigaCX
QuadrigaCX's missing millions is the messiest Bitcoin saga yet
A primer on the collapse of Canada’s biggest Bitcoin exchange.
If there's one thing the internet excels at, it's helping people forget the rules of Occam's razor. For many, there are usually no simple explanations for anything, and everything is a signpost to a grand conspiracy to do others harm. In the wake of one man's death, people on the internet have indulged their worst instincts, although what's worse is that this time, they might have a point.
QuadrigaCX was one of Canada's largest Bitcoin exchanges, controlling assets believed to be worth around $200 million CAD. Unfortunately, Gerald Cotten, its co-founder and CEO, passed away in December 2018. Cotten was the only one who could access the company funds, leaving it unable to pay its creditors.
The simplest answer to this is that Cotten, a 30-year-old with a bachelor's degree in business administration, was not a suitable leader for a bank. His naivety, combined with the relative ease of running a crypto business, meant he didn't think about better protections. And in the unfortunate event of his passing, the fortune was lost.
On the other hand, regulations for exchanges are still nascent. With cryptocurrency, it's still a wild west out there. And it's not hard to see the seductive power of all that cash flowing through your company. If you at a relatively young age were running your own bank and saw millions or hundreds of millions in its coffers, could you resist temptation?
According to public documents, Cotten died on December 9th, 2018, as the result of complications from Crohn's disease. The death was recorded at a hospital in Jaipur, India, where Cotten and his wife were opening an orphanage. His death certificate was recorded by officials in Jaipur and was subsequently confirmed to CoinDesk by the Canadian diplomatic service and affirmed by reporters from The London Times.
Bitcoin, Ethereum und Ripple - Kursanalyse KW10 - Die Unterstützungen halten
QuadrigaCX's customers, however, were not informed about Cotten's death until mid-January, long after his funeral. Cotten's widow, Jennifer Robertson, said the company would "carry on" with the business in the wake of the death. But shortly afterward, Robertson said the bulk of QuadrigaCX's funds were unavailable and may never be recovered.
Robertson explained that the majority of QuadrigaCX's funds were held in cold wallets, a form of offline digital storage for the cryptocurrency. Unfortunately, she added, Cotten held the only passwords to the wallets, and that information had been lost when he died. That meant that around 115,000 people would be left without their share of deposits reportedly worth, in total, $200 million CAD.
Those deposit holders and interested third parties began a forensic analysis of QuadrigaCX to determine what the hell was going on. It didn't take long before several suspicious details began to shake loose, raising more questions than answers. Less than a month before he died, Cotten wrote a will assigning his fortune -- including a number of properties, an airplane and a yacht -- to Robertson.
Cotten made a specific provision in his will for his pair of dogs, should Roberson not survive him. In that circumstance, his assets were to be distributed to the couple's family and a $100,000 CAD trust set up to provide for their two chihuahuas. It's the sort of extravagance that has led one Twitter user to call QuadrigaCX an "#exitscam."
Journalist Amy Castor has written a series of extensive reports about the state of QuadrigaCX and its finances. "It's very common for crypto exchanges to use third-party payment processors," she told Engadget, "as they often have trouble getting banking." To get around this, exchanges often employ "third-party payment processors, and stablecoins like Tether," she added.
Stablecoin? Click To Expand
On Reddit, a QuadrigaCX representative using the official account spoke openly about the creation of Quadriga Bucks as a way of getting around bank regulations. This mishmash of payment processors, third-party bank accounts and invented currencies did, however, raise the ire of banks. Many financial institutions are obliged by law to prevent money laundering, and QuadrigaCX's business aroused suspicion.
In January 2018, the Canadian Imperial Bank of Commerce froze an account controlled by QuadrigaCX that held around $26 million CAD. The freeze caused disruptions with the company's liquidity, meaning it couldn't easily pay creditors on time. According to The Times, the bank attempted to reach out to Cotten to resolve the situation but never received a response. A lengthy courtroom battle for control of the money would ensue, running until December 2018.
Internet sleuths and journalists also had plenty of interest in another QuadrigaCX figure, co-founder Michael Patryn. A Reddit post from January 3rd, 2018, seems to imply that "Patryn" was one of several aliases (including Omar Patryn) of convicted felon Omar Dhanani. Dhanani was a member of Shadowcrew, an early online identity theft group. In 2004, the US Secret Service would shut down the group and arrest Dhanani, who spent 18 months in federal prison. He was arrested shortly after leaving prison on charges of burglary and theft and was deported back to Canada.
At the time, QuadrigaCX said the alleged connection between Patryn and Dhanani was "hypothetical nonsense," and Patryn further denied the accusation to CBC. Canada's Globe and Mail, however, dug into the allegations and believes that Patryn and Dhanani are the same person. At the end of February, it wrote that it had uncovered numerous documents that link the two identities. Previously, the same paper revealed that Patryn had engaged the services of a reputation-management agency to remove unflattering coverage. It's a fact that Patryn denies, and QuadrigaCX said again on Reddit that he was no longer with the company as of 2016.
Reddit logo is seen on an android mobile phone...
As QuadrigaCX began to unravel, James Edwards, editor of crypto research and consulting platform ZeroNoncense, worked with fellow Redditors to examine the company's blockchain history. His conclusions were that the company had no "identifiable cold wallet reserves," and "never held a substantial amount of capital." In essence, Edwards said QuadrigaCX never had the money to satisfy its depositors.
From the available evidence, Edwards concluded that QuadrigaCX was "effectively operating a shell exchange or a Ponzi." It adds credence to the theory that withdrawals took a long time to be processed because money was being pushed around from different wallets. In addition, the report suggests that the cold wallets -- the ones thought locked since Cotten's passing -- were in active use.
It's a point Wired also made, saying that auditors now believe the company's cold wallets are empty. Chris Stokel-Walker wrote that "cryptocurrency people trusted Cotten to keep safe wasn't where he said it would be while he was alive, and no-one knows where it is now."
Castor believes the timing of Cotten's death may be important, beyond the writing of his will. "There is clear evidence that QuadrigaCX was in trouble at the time Cotten died," she said, noting the fall in Bitcoin's value. At the start of November 2018, the price of BTC was around $6,500, but it had fallen closer to $3,500 in the following month.
"If you're running a crypto exchange and you have leverage -- you're taking loans against your own exchange or trading your customer's Bitcoin -- then you're in trouble." Castor also said there was no way of knowing if QuadrigaCX had enough cash on hand to fully repay all those people holding Quadriga Bucks.
Now the Royal Canadian Mounted Police and the FBI have gotten involved with the investigation, according to a report by Fortune. If accurate, it's likely that officials will look into both QuadrigaCX's operation and the circumstances of Cotten's death. And, hopefully, some element of this story will have a satisfactory conclusion.
The fact that QuadrigaCX and so many other exchanges have collapsed is, in fact, a feature of Bitcoin rather than a bug. In the original white paper, Satoshi Nakamoto designed a system that intentionally bypasses well-regulated third parties like banks. People were encouraged not to trust in laws or people but in math for their security. People were not meant to use third parties to store their wealth either. Each individual was solely responsible for their money.
This deliberate lack of protection for ordinary users meant that anyone could set up their own bank, no matter how unsuitable they were. The risks were inherent in the system, and yet people trusted their cash with them as a matter of course. This has lead to large sums of money being put at risk due to greed, amateurism or a mixture of both.
Bitcointopia Inc Founder Morgan Rockoons Pleads Guilty
This time a year ago, major news outlets were suggesting Morgan Rockoons and his advocacy of bitcoin-related everything would be a precedent setting event, a test case in how far law enforcement would allow cryptocurrency advocates to trade in and out of fiat.
His eventual plea deal, however, appears to have more to do with business fraud than cryptocurrency in particular. Rockoons was first arrested on charges of money transmission violations without a proper financial license. A transmitter must declare deals over $10,000 and follow know-your-customer (KYC) regulations as dictated by FinCEN and the US Treasury.
Officials insist Rockoons violated the above, operating without a license and exchanging more than $10,000 in fiat, transferring “about $9,200 in bitcoin to the agent for $14,500 in cash, taking the remainder as a transaction fee,” the San Diego Union Tribune noted. He was arrested, let out on bail, remaining defiant about his innocence and the relative absurdity of the charges. It did seem prosecutors were looking to make an example of him.
He doubled down on his activism, however, and while out on bail with charges still hanging over his head Rockoons linked up with a plan to start an idealistic community, a “Bitcoin City,” and set about advertising that fact in video, blogs, and podcasts. By July of last year, his group published the Blockchainist Papers, declaring their independence from the US government.
Bitcointopia Inc was launched, and prosecutors assert he and partners pushed parcels of undeveloped land in Elko County, Nevada, “500 to 1,000-acre plots for 0.5 bitcoin per acre — where he would build a city of the future around cryptocurrency, automation and technology. He was inspired by Walt Disney’s Tomorrowland,” the Union Tribune explained. Law enforcement documented 10 investors gave Rockoons money for land.