Chinese Police Bust $47M Pyramid Scheme Masked As Blockchain Project – China Money Network

By Yimian Wu      May 29, 2018

Police in Jinan, Shangdong province has arrested a gang of more than ten suspects involved in a RMB300 (US$46.8 million) million pyramid scheme that masked itself as a blockchain project, in yet another scam case reported by local media.

Similar to many earlier cases disclosed by local police across the country, the suspects told members that by paying different levels of membership fees, they could obtain different amount of original shares and dividends of their blockchain-based peer-to-peer platform.

The continued discoveries and arrests of crime groups using the name of blockchain reflects the level of enthusiasm on the part of small investors to participate in the blockchain hype, despite repeated warnings from police and governments.

More at: Chinese Police Bust $47M Pyramid Scheme Masked As Blockchain Project – China Money Network

Hacking Continues: Now Bitcoin Gold Suffers from Double Spending Attack With Exchanges Losing As Much As $18 Million – Crypto-News India

By Ashish Bhatnagar      May 24, 2018

Cryptocurrency networks seem to be on the target of some organized criminals these days. It was only two days ago when I reported that Japanese cryptocurrency Monacoin suffered from a selfish mining attack recently, and yesterday there was the news of Verge suffering from a DDoS attack. However, the worst doesn’t seem to be over yet, as now news has broken about a 3^rd major altcoin that suffered from double spending attack. This brings the number of coins suffering from cyberattacks within this week to 3.

The altcoin we’re talking about is Bitcoin Gold. With a market cap of $795 million as of now it’s 24^th largest cryptocurrency in the world. However, that sort of scale didn’t stop hackers from taking over 51% of its network for a double-spending attack. Let me tell you what happened in detail.

More at: Hacking Continues: Now Bitcoin Gold Suffers from Double Spending Attack With Exchanges Losing As Much As $18 Million – Crypto-News India

Tea Tokenizers Arrested in China for Alleged $47 Million Crypto Fraud – CoinDesk

Another cryptocurrency project has been busted by law enforcement in China for allegedly soliciting money from investors with fraudulent claims.

According to Guangdong Daily, a provincial government organ in China, police in Shenzhen arrested six individuals Monday who allegedly defrauded 3,000 Chinese investors out of $47 million by selling a cryptocurrency they claimed was backed by a commodity.

The six suspects formed a firm based in Shenzhen called PEB, which beginning in January 2017 issued a blockchain-powered token dubbed Pu’er Coin, according to the report.

The project’s website says buyers of the token are entitled to hold a contract representing ownership of a certain amount of the Pu’er Tibetan tea the firm has in stock, which it claims to be worth billions of dollars.

While the token can be subsequently exchanged in a secondary market called Jubi.com, another website claims the contract can also bring a 12 percent annual return if investors choose to lock their funds for 12 months.

According to the police investigation, though the firm had only a “very limited amount of the tea in stock,” it promised high short-term returns to investors in social media promotions and roadshows at high-end hotels.

More at: Tea Tokenizers Arrested in China for Alleged $47 Million Crypto Fraud – CoinDesk

Bureau of Meteorology employees investigated for mining cryptocurrency at work – The Guardian

By Amy McNeilage      March 7, 2018

Two Bureau of Meteorology employees are reportedly being investigated by police for mining cryptocurrency on their work computers.

The Australian federal police questioned the IT workers at the bureau’s Docklands headquarters in Melbourne on 28 February, the ABC has reported.

An AFP spokesman confirmed a search warrant was executed at a business premises in Docklands on 28 February, but was unable to make further comment, as “the investigation is ongoing”.

More at: Bureau of Meteorology employees investigated for mining cryptocurrency at work – The Guardian

US Marshals to Sell $25 Million in Bitcoin at Auction – CoinDesk

By Nikhilesh De      March 5, 2018

The U.S. Marshals are set to auction off nearly $25 million worth of bitcoin later this month.

The government agency announced Monday that it will put approximately 2,170 bitcoins on the auction block, with the sale planned for March 19. Would-be bidders must submit a $200,000 deposit and complete the registration requirements by March 14 to participate, according to the Marshals Service.

This month’s auction will consist of 14 separate blocks, with two blocks of 500 BTC, 11 blocks of 100 BTC and one block accounting for 70 BTC.

According to the release, the bitcoins were confiscated in “connection with various federal criminal, civil and administrative cases,” ranging from federal trials to Drug Enforcement Agency actions.

 The provenance of most of the seized bitcoins is listed online, which notably mentions that some of the coins involved were traced to the case involving Shaun Bridges, the ex-Secret Service agent who was sentenced to prison after being accused of stealing funds during the Silk Road investigation.

More at: US Marshals to Sell $25 Million in Bitcoin at Auction – CoinDesk

Thieves have appropriated 600 Bitcoin mining computers worth $2 mln in Iceland – Coinidol.com

By Coin Idol      March 5, 2018

One of the biggest thefts ever recently happened on the Icelandic cryptocurrency market. 600 powerful computers that mined Bitcoins and some other digital currencies were stolen. 11 suspects have been arrested so far in connection with this nefarious incident.

“This is a grand theft on a scale unseen before. Everything points to this being a highly organized crime,” –reported Olafur Helgi Kjartansson, the police commissioner on the southwestern Reykjanes peninsula, where two of the burglaries took place.

This crime was already named the “big Bitcoin heist” by the country’s mass media. It was also mentioned, that the thieves might use the stolen fintech equipment to make a large amount of money by mining cryptocurrencies.

More at: Thieves have appropriated 600 Bitcoin mining computers worth $2 mln in Iceland – Coinidol.com

Bill Gates’ Three Attributes of Bitcoin: Risk, Volatility, and Death – BTCMANAGER

By Rahul Namblampurath      March 1, 2018

Microsoft co-founder and the world’s former richest man Bill Gates has raised concerns about cryptocoins being used for financing criminal and other illegal activities. During a Reddit ask me anything session (AMA) on February 27, 2018, he squarely blamed cryptocurrencies for causing death in a fairly direct way. His remarks were in reply to a question asked by another Reddit user on Gates’ thread.

Microsoft Visionary Criticizes Bitcoin

Gates did explain why he really thinks cryptocurrencies are bad though. He said that cryptocurrencies help in hiding the identity of those who do want to disclose their finances to the government. Gates said, “The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing.” He then went on to add that, “the government’s ability to find money laundering and tax evasion and terrorist funding is a good thing.”

However, his main concern is that these cryptocurrencies can be very easily used for buying drugs. Gates then went on to add that blockchain and cryptocurrency technology is a technology that is causing deaths. He said, “Right now cryptocurrencies are used for buying fentanyl and other drugs, so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long.”

More at: Bill Gates’ Three Attributes of Bitcoin: Risk, Volatility, and Death – BTCMANAGER

BIG Blockchain Intelligence Group has Tracked Coincheck’s Stolen Funds – Bitcoin News

By J.P. Buntinx    March 1, 2018

For those who thought things couldn’t get worse for Coincheck, the reality is very different. The mounting lawsuits are a big problem already, but it’s only the tip of the iceberg. According to BIG Blockchain Intelligence Group, the stolen funds have been laundered through a Vancouver-based exchange. That in itself is pretty worrisome, although recovering the money is no longer an option.

It is evident the theft of Coincheck’s funds has been a cause of concern. With 500 million NEM stolen, things are not looking good. So far, there has been no trace of this fund whatsoever. If the BIG Blockchain Intelligence Group is to be believed, they found how the money was laundered. It seems a Canadian exchange is involved in this particular development. This is the result of an internal investigation, although few details have been made public as of right now.

More at: BIG Blockchain Intelligence Group has Tracked Coincheck’s Stolen Funds – Bitcoin News

Making Peace with Crypto’s Capacity for Evil – CoinDesk

By Marc Hochstein      February 27, 2018

Marc Hochstein is the managing editor of CoinDesk. 

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.

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If Venezuela’s oil-backed cryptocurrency succeeds – and that’s still a big if – it could portend a whole new use case for the technology: fundraising for rogue states.

The world may just have to live with that.

One of the defining aspects of cryptocurrency is neutrality. Bitcoin, ethereum and the like are open networks. They don’t discriminate.

A public blockchain doesn’t care if you’re a Boy Scout or a convicted ax murderer. As long as you control the private keys to a bitcoin wallet, you control the funds in it, no passport required. (Setting up an account at a crypto exchange is a different matter.)

That is financial inclusion, in the truest sense, though it’s not exactly what policy wonks have in mind when they use the term.

Similarly, as long as you know how to code, you can contribute or build applications on top of bitcoin or ethereum, no Ivy League degree needed.

That is permissionless innovation. It’s what allowed Sir Tim Berners-Lee to create the world wide web and Satoshi Nakamoto to invent bitcoin.

And now it may allow Venezuela’s strongman president, Nicolas Maduro, to eat many more empanadas at his desk, and do who knows what else, as his nation reels from an economic crisis.

More at: Making Peace with Crypto’s Capacity for Evil – CoinDesk

News: Self-Proclaimed Inventor of Bitcoin Faces $10 Billion Lawsuit – PCMag India

By Michael Kan      February 27, 2018

Craig Wright, the Australian entrepreneur who claimed to be Bitcoin’s inventor, is now facing a $10 billion lawsuit over the digital currency’s creation.

The lawsuit comes from the estate of a former business partner, David Kleiman, who may have owned over a million bitcoins, but died in 2013 of illness. Following his death, Wright schemed his way into stealing it all away, the lawsuit claims.

 The legal action is the latest twist over the identity of Bitcoin’s creator. In 2016, Wright publicly identified himself as the inventor, after years of ongoing speculation. However, critics were quick to cast doubt over his claims, citing a lack of proof.

Wright himself later backed away from the spotlight. He declined to offer any additional evidence, and apologized for the whole incident.

More at: Self-Proclaimed Inventor of Bitcoin Faces $10 Billion Lawsuit – PCMag India