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Bitcoin Scams

OneCoin Founders Charged Of Fraud By US District Attorney

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The founders of the international digital currency pyramid scheme OneCoin were charged with fraud after taking part in marketing the coin. The announcement was published by the US Attorney Office today and it reached our crypto news so let’s read more about the decision.

OneCoin founders Konstantin Ignatov and his sister Ruja Ignatova were arrested in Los Angeles and were charged with wire fraud, money laundering, and securities fraud by making investors contribute billions of dollars in the cryptocurrency.

The fraudulent cryptocurrency was established back in 2014 in Sofia, Bulgaria. The project works as a marketing network where members receive commissions for attracting other investors that are likely to invest in the currency packages. OneCoin at one point had over three million members across the world.

When Konstantin was asked how the members can cash out their coins, he told everyone who is interested in cashing out to leave the room because that is not the point of the project. After the charges, the US Attorney of Manhattan said:

 “As alleged, these defendants created a multibillion-dollar ‘cryptocurrency’ company based completely on lies and deceit. They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones.  Investors were victimized while the defendants got rich. Our Office has a history of successfully targeting, arresting, and convicting financial fraudsters, and this case is no different.”

The New York County District Attorney Cyrus R. Vance Jr. claimed that the defendants created an old-school pyramid scheme compromising the integrity of the entire financial system in New York by defrauding investors for billions of dollars.

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Bitcoin Scams

Crypto And Forex Scams Got Away With $34 Million In 2018: UK Report

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The main financial regulator of the United Kingdom is in the coming altcoin news. The Financial Conduct Authority (FCA) recently reported that crypto investors in the country lost more than $34 million due to crypto and forex scams from 2018 to 2019. The news were first reported by the Financial Times on May 20. As the data shows (gathered from the UK national fraud and cybercrime reporting center Action Fraud), the individual loss due to scams has decreased from $76,000 to $18,500 while the total losses fell by more than $14 million - being featured on many best cryptocurrency news sites. Still, the crypto and forex scams were a subject in many reports and their number tripled to reach 1,834 with more than 81% of them being crypto scam claims. Right now, the FCA is actively considering a ban on "high-risk derivative products linked to crypto assets." As the FCA executive director Mark Steward said in his statement related to crypto and forex scams:
“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal.”
The report is a viral topic in the latest cryptocurrency news - mostly because the FCA stated that scammers use social media to find potential investors. According to the regulator, crypto and forex scams like these often use pictures of celebrities with fake endorsements alongside images of luxury goods such as cars and watches. In 2018, the initial coin offering (ICOs) advisory firm Statis Group released a study in which it found that more than 80% of ICOs in 2017 were scams. The associated losses for that year, as the study showed, totaled around $1.34 billion. In the latest altcoin news, we can also see that new evidence surfaced, suggesting that purported Bitcoin (BTC) exchange Goxtrade is a Bitcoin scam. As the evidence shows, Goxtrade reportedly used the real names and photos of unaffiliated parties including the blockchain figure Amber Baldet to fill their website staff page and its absent from the UK's registry of companies and businesses. All in all, the number of crypto and forex scams is increasing and there must be certain regulation to prevent these billions which are lost on a yearly basis.  
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Bitcoin Scams

Investor Sues OneCoin Scheme Seeking Class Action

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A former OneCoin investor named Christine Grablis is right now suing the cryptocurrency investment scheme for fraud. As an official complaint in the latest cryptocurrency news shows, the investor sues OneCoin while seeking damages and a class action suit to represent other investors which have been purportedly defrauded by the company. The full list of defendants in the lawsuit includes Grablis on one side and OneCoin Ltd. on the other - as well as the founder of OneCoin, Ruja Ignatova along with her colleagues Konstantin Ignatov, Sebastian Greenwood, Mark Scott and other potential parties that are unnamed yet. Now that an investor sues OneCoin, the topic of the fraudulent scheme is again brought and featured by many best cryptocurrency news sites. One Bloomberg report published on May 7 and featured on a lot of crypto currency websites shows that Ruja Ignatova (founder of OneCoin) has been charged with wire fraud, securities fraud as well as money laundering. On the other hand, the investor sues OneCoin and its other member which include Ruja's younger brother (Konstantin) who is the purported executive at OneCoin and who was already charged with fraud and money laundering in March this year. The investor sues OneCoin in a class action complaint where Greenwood is the co-founder and the "public face" of OneCoin. Mark Scott is listed as a licensed attorney who is using his legal knowledge to help the company launder money via hedge funds. Grablis has hired a law firm named Silver Miller to carry out the complaint. This firm specializes in representing cryptocurrency investors and has issued a press release instructing many of the investors in the scheme that an investor sues OneCoin and that they can do the same and participate in the class action lawsuit too. As we previously reported on our altcoin news site, OneCoin was a global phenomenon and a Ponzi Scheme that used nothing but "smoke and mirrors" tactics to maintain some air of legitimacy - scamming users to invest in the pyramid scheme and potentially hold virtual coins. Through multi level marketing (ML), the scheme sold education materials for trading along with tokens that could be used to mine OneCoins.
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Bitcoin Scams

Binance Bitcoin Scam: Hackers Steal 7,000 BTC In Security Breach

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One of the largest cryptocurrency exchanges in the world, Binance, has suffered a major security breach yesterday, where hackers got away with around 7,000 BTC. The Binance Bitcoin scam was confirmed via a statement shared with many best cryptocurrency news sites on May 7. According to Binance, the hackers used a lot of tactics such as phishing and viruses to get away with a lot of 2FA codes and API keys as well as other information. As the exchange stated, there was one affected transaction where hackers managed to steal 7,000 Bitcoins (BTC) worth around $40 million right now. The Binance Bitcoin scam was confirmed in a letter on the official website. In the letter, the CEO of the exchange Changpeng Zhao (CZ) spoke to the public, stating that the Bitcoin were withdrawn from the hot wallets of the company - containing only 2% of the exchange's total Bitcoin holdings. As Zhao said, the Binance Bitcoin scam did not affect other wallets. As the latest cryptocurrency news show, Binance is suspending all of the deposits and withdrawals. In the meantime, the exchange will conduct a security review to investigate the Binance Bitcoin scam completely, review its systems and do all the work needed to prevent such things from happening again in the future. Trading BTC on the exchange will be active and the traders will be able to adjust their positions accordingly. Zhao has talked about the Binance Bitcoin scam objectively and preventatively, stating:
“Please also understand that the hackers may still control certain user accounts and may use those to influence prices in the meantime. We will monitor the situation closely. But we believe with withdrawals disabled, there isn’t much incentive for hackers to influence markets.”
Right now, Zhao believes that the Bitcoin scam won't have a big incentive to influence markets. As he added, he is working on conducting a Twitter AMA to field questions from the community. The Binance Bitcoin scam has triggered the exchange to use a Secure Asset Fund for Users (SAFU) which will help and cover the incident. The altcoin news show that there is no risk for other altcoins to be stolen. As a reminder, Binance created the fund in July 2018 as a type of emergency insurance for cases like these.
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Bitcoin News

ISIS Used Bitcoin To Fund Horrific Sri Lanka Easter Bombings: Research

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New breaking news are reported by many best cryptocurrency news sites, showing that Bitcoin could have played a major role in staging the bloody Easter Sunday and the suicide bombings in Sri Lanka which killed 253 civilians. According to the Israeli blockchain intelligence firm Whitestream, ISIS used Bitcoin to fund these attacks. In a report, the agency revealed that the ISIS used BTC through Canada-based payment gateway CoinPayments - converting the cryptocurrency to fiat money. The firm has identified the mysterious transactions between the wallets that ISIS used to raise contributions for - and the Bitcoin accounts held by CoinPayments. According to Whitestream reports, the balances in the payment company's wallets went from $500,000 to $4.5 million one day before the attacks. The firm also added that ISIS used Bitcoin after its CoinPayments balances dropped back to $500,000 right after the deadly attacks took place - receiving more BTC and processing high-volume transactions. The payment company (CoinPayments) also admitted that they processed high-volume transactions at the time. As the latest cryptocurrency news show, they did not have any knowledge about the money's links with potential terrorist groups. As they revealed:
“CoinPayments admits that their wallet was involved but denied that it is connected to ISIS,” the blockchain intelligence firm told Globes. “It’s possible that the company is not aware of the usage of their wallets, perhaps because ISIS uses straw companies [to] transfer the money.”
For all of you wondering why ISIS used Bitcoin and not any altcoin (which would been featured in our coming altcoin news), the truth is that ISIS-linked Bitcoin wallets exist and WhiteStream has been following them for the past two years. In fact, the company maximized its focus on one specific Bitcoin wallet which was receiving donations actively over different periods. In that manner, WhiteStream found that ISIS used Bitcoin from a wallet address listed on the ISIS fundraising website. According to Levy, the transactions were passively traced back to CoinPayments while the company did not know that they were actually facilitating the ISIS Bitcoin funding campaign. As Levy said:
“Our assumption is that the terrorist organization probably possesses many bitcoin addresses through CoinPayments, with every donation sent to a different address,” Levy told Globes. “On the day before the Sri Lanka terror attacks, we identified two relatively big transactions at this address with bitcoins worth about $9,800.”
In February, Whitestream had named CoinPayments for facilitating Bitcoin-enabled donation campaigns for Hamas which is a Palestine-based Sunni-Islamist fundamentalist group.  
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