Electrum- the popular Bitcoin (BTC) wallet service reported that the service is facing another Denial-of-service (DoS) attack on its serves and in today’s cryptocurrency news we find out how that happened. According to reports, the new attack harmed users by millions of dollars where a single user even lost about $140,000. The news website The Next Web writes that the ongoing DoS attack was launched recently by a malicious botnet with the help of more than 130,000 machines. The goal of the attack is to steal as many bitcoins as possible by referring them to fake Electrum versions of the same software. A still-anonymous researcher writes that the DoS attack was launched about a week ago and is still lasting on a new level. According to the article, the attackers were able to implement their own Electrum servers by hosting the compromised version of the wallet in order to successfully conduct the hack. When users synced their electrum wallet with the malicious server, they basically updated their client hacked version and ended up losing their funds that were stored on the old version. The lead electrum developer Thomas Voegtlin stated that the company is expected to resolve the problem in the next couple of days. He emphasized that the users who are under highest threat are those who downloaded the wallet a long time ago and haven’t updated their software since. Electrum’s website stated that the software versions that are older than 3.3 cannot connect to the public servers anymore and must be upgraded. This is a method that is used to prevent exposure to phishing texts. The website also stated that the users should not download the software from any other source but from the official website only. The company also recommended its users to select their server manually and not to use the auto connect option. The company is still working on an improved version of the servers in order to fix the problem. Back in 2018, a similar attack was done to the exchange where users lost more than $937,000 worth of Bitcoin. The attack was done by using a fake version of the wallet.

Today's crypto news features the police in South Korea has recently arrested suspects behind a new crypto ponzi scheme that uses artificial intelligence (AI), according to the English-language news outlet Korea Joonggang Daily reported on April 8. The scheme stole a total of 21.2 billion won ($18.3 million) over a six-month period in 2018. However, it finally came to an end after the Seoul Special Judicial Police Bureau for Public Safety trained robots caught the ponzi scheme using keywords and other clues. We are talking about actual artificial intelligence (AI) powered robots which were able to learn the patterns of Ponzi schemes. As the section chief of the bureau's second investigation team named Hong Nam-ki told the publication:

“Through keywords such as Ponzi, loan and recruiting members, we were able to teach the AI patterns of Ponzi schemes. The program can also identify advertisement patterns and identified the enterprise in question, which [was caught] with evidence provided by an unnamed informant.”

The CEOs of the scheme, known as Lee and Bae, amassed a lot of money through selling private digital tokens named M-Coin which posed to be a real altcoin, along with membership fees from recruits, as the publication states. The figures also took advantage of the public's lack of knowledge of the crypto space to part them from their fiat investments.

“In our stakeout, we saw that most people attending the swindler’s presentation for membership were elderly people in their 60s and 70s,” Hong Nam-ki added.

Currently, Ponzi schemes still remain a persistent phenomenon despite the increasing legitimacy of cryptocurrency in the public eye. This is obviously not the first (or the last) crypto ponzi scheme that exists out there - and will hopefully not be the last to be spotted with the help of artificial intelligence (AI). Earlier this year, authorities caught up with the controllers of OneCoin which is a notorious international quasi-pyramid scheme which ran for several years.

Amit Bhardwaj, the face behind one of the most expensive Bitcoin Schemes, was granted bail by the Supreme Court of India. In our latest cryptocurrency news, we find out why the court brought this decision. Bhardwaj is the founder of GainBitcoin and he was jailed after conducting a $300 million Ponzi scheme. According to his lawyer, Amit is suffering from kidney failure for a few months. He spent his days in a jail hospital in Delhi and his health is allegedly worsening. His health didn’t allow him to go to court hearings after 12 criminal cases were filed against him. The Supreme Court heard Amit’s bail plea a week ago. The court ordered his lawyers to submit all of the medical records for the next hearing that happened yesterday. One of the lawyers, Prakash, provided a copy of the records from the Delhi-based Institute of Medical Sciences. The records show that Bhardwaj is going through a surgery in the next months for a kidney transplant. The records also show that Bhardwaj’s kidneys initially functioned normally but got worse over time. Bhardwaj’s lawyers stated that he needs time to get his fitness and mental health back. The court eventually granted Amit a temporary break from prison. However, the bail didn’t come for free. Bhardwaj had to deposit $1.5 million in bonds to get bail. Usually, people pay up to $100 in similar bail bonds for smaller crimes. A million dollar bail bond wanted to make sure that Bhardwaj will stay away from escaping. Some of the other people involved in the Ponzi scheme also got bail. Bhardwaj’s brother Vivek Bhardwaj but also some friends including Rupesh Singh, Sanchit, Rajesh Jain and Sahil Baghla. Sanchit was working as a business developer for the company got arrested on May 24. He was released from jail after a Chandigarh court granted him bail. Another developer at the GainBitcoin Company also received bail to allegedly attend the funeral of his father. Bhardwaj’s scams harmed more than 6,000 investors in India for more than $300 million. He later offered to compensate the victims but they refused to take the money in cash, only in bitcoin.

A few days after expanding into cross border payments, Coinbase is continuing its domination and is now taking the threat of criminals who are hacking activity seriously. To prove things, the exchange revealed the details of its brand new crypto insurance policy program this week - making the latest digital currency news on our site. As Coinbase stated, the hot wallet policy has been held with a $255 million limit since 2013. The policy is now facilitated through Lloyd's of London. According to the Chief Information Security Officer at Coinbase, Philip Martin:

"The data is clear that, today, the most likely consumer loss scenario for any cryptocurrency company is hot wallet loss due to hacking."

Martin also touched on the possible scenarios and how Coinbase's insurance policies give customers peace of mind that the Bitcoin or altcoin savings they hold at the exchange is protected from losses.

“If the worst happens and Coinbase loses customer funds, customers deserve certainty that they will be made whole,” he wrote.

According to experts, the worst case scenarios for losses in this manner break down to two categories: crime and specie. While crime covers losses caused by criminals who hack, steal and conduct fraud transfers, insider trading losses are also covered. On the other hand, the Specie coverage kicks in whenever there is a physical damage or theft or private key data in cold storage. As Martin explained:

“Crime policies would not generally cover the costs of incident response, PR costs, etc. Crime policies also don’t generally cover failures of the underlying currency (e.g. 51% attacks). Coverage for hot wallet exposures are also significantly more expensive than cover for cold storage alone.”

He also had plenty to say about why is insurance important for crypto companies and what it should cover.

"Companies should focus on insurance for value in flight. This means that exchanges and wallets should have sufficient Crime coverage to fully cover their hot wallets (including enough buffer to handle asset price spikes)," Martin added.

He concluded with a statement in which he said that Coinbase is working with regulators and insurers to create more insurance solutions in different areas.