More than 250 Zambian university students recently participated in an online boot camp and hackathon which saw over 100 earning certification in smart contract development. The students who complete their minimum viable products (MVPs) can apply for grants ranging from ,000 to ,000. Students Trained in Decentralized Application Development More than 250 students from St. […]
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SEC Charges American Bitcoin Academy Founder With Fraud That Cost Students $1.2 Million
The U.S. Securities and Exchange Commission (SEC) has charged the founder of American Bitcoin Academy, accusing him of running an online fraudulent crypto scheme that cost students .2 million. The defendant “falsely claimed that his investment strategies would be guided by his own ‘artificial intelligence’ and ‘machine learning’ technology which, like the fund itself, never existed.”
SEC Charges Founder of Online Crypto Fraud
The U.S. Securities and Exchange Commission (SEC) announced Friday that it has charged the founder of American Bitcoin Academy “with fraud targeting students.” Brian Sewell and his company, Rockwell Capital Management, agreed to settle fraud charges in connection with a scheme, the regulator said, adding:
The SEC alleges that the fraudulent scheme cost 15 students .2 million.
The SEC alleges that, between early 2018 and mid-2019, Sewell encouraged hundreds of his online students to invest in the Rockwell Fund, a hedge fund he promised to launch. He claimed the fund would use advanced technologies like AI and crypto-asset trading strategies to generate returns for investors.
The securities watchdog further alleges that Sewell, who formerly resided in Utah before moving to Puerto Rico, received .2 million from 15 students for the Rockwell Fund. However, he never launched the fund or implemented the promised trading strategies. Instead, he held onto the invested money in bitcoin, which he claimed was stolen when his digital wallet was hacked.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, commented: “We allege that Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund.” The SEC official stressed:
Among other things, he falsely claimed that his investment strategies would be guided by his own ‘artificial intelligence’ and ‘machine learning’ technology which, like the fund itself, never existed.
The SEC’s complaint charges the defendants with violating antifraud provisions of the federal securities laws. The defendants have agreed to settle the charges and have consented to injunctive relief without admitting or denying the allegations in the complaint. “Defendant Rockwell Capital Management also agreed to pay disgorgement and prejudgment interest totaling ,602,089 and Defendant Sewell agreed to a civil penalty of 3,229. The settlement is subject to court approval,” the SEC detailed.
What do you think about the SEC charging the founder of American Bitcoin Academy? Let us know in the comments section below.
Report: FTX Promised High Earnings to African Students That Successfully Recruited Fellow Learners
The collapsed crypto exchange FTX reportedly used the lure of high earnings to convince African university students to become its ambassadors. In addition to encouraging new FTX investors to use the platform, student ambassadors were also required to teach them about crypto and the blockchain. Some of the students insisted they will not quit crypto despite losing funds following FTX’s collapse.
Recruited Users Told of Benefits of Using FTX
The collapsed crypto exchange FTX reportedly used the promise of significant rewards to encourage African students to recruit new investors to its platform, a report has said. The report added that in certain cases, the students were reportedly told to ensure the recruited investors deposited funds or traded on the platform.
Besides encouraging the new investors to use the platform, the students were also required to educate them about crypto and blockchain technology. The students had to emphasize to fellow students the benefits of using FTX. According to a Business Insider report, successful students were told they could earn commissions as high as 40%.
However, as per the report by CNBC, many of the students who acted as FTX’s brand ambassadors in Nigeria before it collapsed were not aware of the crypto exchange’s precarious financial position. Consequently, when the crypto exchange collapsed in the last quarter of 2022, the students were still actively recruiting, and just like other FTX users, they too lost money.
As expected, the crypto exchange’s collapse and the impact it has had on the broader crypto industry have amplified calls for tougher regulation of crypto entities. In Africa, regulators such as the Rwandan central bank have used FTX’s collapse to highlight the dangers of crypto trading.
‘Too Big to Fail’
Yet, despite the threat of stricter regulation as well as the public’s now dimmed view of the crypto industry, some of the students quoted in the report said they are undeterred. One of the students, Imran Yahya, FTX’s ambassador at Bayero University in Nigeria, said the crypto exchange’s collapse only proved that “no company is too big to fail.” However, instead of quitting crypto, Yahya reportedly said he planned to be more careful this time.
Fortunate Atueyi, FTX’s ambassador at the University of Nigeria, said he too will be more careful and not overly trusting in the future.
“I kind of trusted them. I was like, I was a part of people saying FTX is too big to fail. I don’t think it is, like, wise to leave your money there, and they have full control over your money. So are just like any bank,” Atueyi said.
Another student, Gabriel Trompiz, argued that while centralized exchanges like FTX have proved to be helpful in driving the crypto adoption agenda, relying on them “is like contradicting yourself.” Therefore, to ensure that he does not lose out again in the future, Trompiz said he will prioritize investing in decentralized finance (defi) platforms.
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In 2014, Selected MIT Students Got $100 Of Free BTC. What Did They Do With It?
This fascinating experiment involving free BTC generated concrete results and we’re here to review them. The feel-good story arrives courtesy of CNBC, who interviewed some of the protagonists and got to the bottom of things. It all started with 19-years-old Jeremy Rubin, who developed a program called Tidbit. It allowed “users to mine for Bitcoins on a client’s computer as a replacement for traditional advertising.” The authorities weren’t so keen on his idea, as the Electronic Frontier Foundation remembers:
In December 2013, the New Jersey Attorney General’s office issued a sweeping subpoena to Rubin and Tidbit, seeking Tidbit’s source code, documents and narrative responses about how Tidbit worked, which websites it was installed on and the Bitcoin accounts and wallet addresses associated with Tidbit.
Related Reading | MIT BTC Project Goes Live, Offer 0 of Free BTC to Undergrads at MIT
They eventually dropped the investigation, but one good thing came out of it. He realized that even though he thought “everyone was super cutting-edge” at MIT, not many were familiar with Bitcoin. So, logically, he raised “half a million dollars in donations from alumni and bitcoin enthusiasts” and the free BTC experiment was born.
Were There Conditions To Get The Free BTC?
The idea was for undergrad students to “complete a few questionnaires and review educational materials,” and to “set up their own crypto wallet, which at the time was hard enough to discourage participation.” Still, 3,108 students got 0 of free BTC. At the time, Bitcoin’s price was 6, so they got about 0,3 BTC each. At today’s price, that would be worth about .500.
“We wanted to get bitcoin out in the world more, and we wanted to spread the technology,” said Rubin. “We also wanted to study what it means to distribute a new asset.”
How Many Sold Or Spent The BTC?
Luckily for the history books, researchers traced the project. Apparently, “1 in 10 cashed out in the first two weeks. By the end of the experiment in 2017, 1 in 4 had cashed out.” Paper hands, sure, but remember that no one had any idea if Bitcoin as a whole was going to pan out. CNBC quotes Christian Catalini, one of the researchers:
“Even at the time, the technology was quite user unfriendly,” he said. “Even within a pretty tech-savvy community such as MIT, it was kind of surprising to see how much work it really was to use bitcoin at the time.”
Still, 3 out of every 4 held on to the BTC, which is pretty impressive. “What was fascinating is that in a sense, the MIT students got it right. The vast majority held on to their bitcoin as an investment.” Did they, though? Or was it so difficult to use and unknown by vendors that they didn’t even bother?
BTC price chart for 08/18/2021 on Bitstamp | Source: BTC/USD on TradingView.com
What Did The Students Do With Their Free BTC?
Well, long story short, they spent the free BTC on sushi. CNBC managed to track two of those students that, somewhat ironically, now work in the crypto space. One, Sam Trabucco, serves as Co-CEO of Sam Bankman-Fried’s Alameda Research. The other, “Van Phu, now a software engineer and co-founder of crypto broker Floating Point Group.”
“One of the worst things and one of the best things at MIT is this restaurant called Thelonious Monkfish,” said Phu. “I spent a lot of my crypto buying sushi.”
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So did Trabucco, who remembers the experiment as an important experience for the people involved. He spent the free BTC because he “didn’t really think it was going to be the future of finance.” Still, he considers that maybe already having a Bitcoin wallet set up might’ve sent him on the path to head a firm as big as Alameda Research.
All’s well that ends well.
Featured Image by Yuhan Du on Unsplash – Charts by TradingView
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Free Money How Students Mine Cryptocurrency in Their Dorm Rooms
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Students are Mining Bitcoin in University Dorms, Campuses are Alert
While Bitcoin mining — which is the backbone of many public blockchains — is often left to the operators of data centers, some university students have begun to try their hand at running their own, in-dorm mining efforts.
Bitcoin Mining In Unexpected Places — University Campuses
Speaking with CNBC journalists, Patrick Cines, a Penn State College graduate, highlighted his foray into cryptocurrency mining while living on campus grounds. The 2017 Penn State graduate stated:
“I had basically a box, maybe a foot and a half by a foot and a half tall. It was sitting in, right at the foot of my bed. Had several graphics cards.”
While this may have been the computer of a gaming enthusiast living in a cramped dorm room, Cines noted that this was actually a compact cryptocurrency mining rig. He noted that while in operation, this tiny, but powerful machine, was a substantial source of income for a university student with a crammed schedule, as mining farms can be used with a “set and forget” mindset.
Despite the fact that this side-hustle buffed the student’s wallet, it wasn’t all sunshine and rainbows, as Cines went on to explain in the following statement:
“It was unbearable… I had fans running, I had the window open. The first day I was living there, went to Home Depot, bought some dryer tubes, strapped them to the front, and used that to push all the hot air outside of my room.”
But to Cines, the unbearable heat that became part of his daily life was all worth it, as his rig proved to be much more than a source of passive income. He added that mining shaped his aspirations for the study and development of technology, stating:
“[Mining] was my personal introduction to tech and being in the Blockchain space. So I was really excited to just see every single thing that I did afterwards definitely shaped my college career,”
Although student miners may be operating in good faith, for university administrators occurrences of on-campus mining might pose to be a financial issue. According to Mike Banic, an executive at cybersecurity firm Vectra, mining may require universities to foot some hefty electricity bills. Banic noted:
“I think there are a lot of universities that don’t know this is happening. I don’t think that they would want it to happen either, considering it costs ,700 to mine one bitcoin. That’s about 10 percent of the annual tuition at a private university.”
In Cine’s case, Penn State was paying for his electricity, as it is normally factored into the tuition fees paid by him or his parents. Even if the university was aware of this operation, Penn State policies do not explicitly mention cryptocurrency mining as a prohibited activity, leaving the graduate’s operation within the legal barriers set in place.
But this isn’t the case with all universities, as Massachusetts’ Worchester Polytechnic Institute has an “acceptable usage policy” in place, which disallows students from personally benefiting from the use of institutional resources, like electricity. Nonetheless, the rules surrounding mining still vary from one post-secondary institution to another.
Researchers: Cryptomining Poses A Security Threat To Universities
While the electricity issue has been addressed, cybersecurity researchers from Vectra are still worried about the cybersecurity risks which are posed by farms like Cine’s. The aforementioned executive at Vectra noted that cryptojacking malware can quickly spread throughout an unprotected school network, via an innocent miner’s operations. As Banic later explained, mining software can be a gateway for hackers to compromise a network, as nodes constantly communicate with other computers across the globe.
However, the Penn State graduate, who has quickly become a technology expert, claims that these fears aren’t warranted. Rebutting Banic’s fear, Cine stated:
“I think that’s a separate vulnerability, and it goes more to the security that the schools have, or should have. I think mining itself does not open up schools.”
It remains to be seen whether Cine or Banic’s statements hold credence, but as a Vectra study shows, cryptocurrency mining is quickly spreading to campuses all across America.
Featured Image From Shutterstock
The post Students are Mining Bitcoin in University Dorms, Campuses are Alert appeared first on NewsBTC.