The Enforcement Division within South Africa’s Financial Sector Conduct Authority (FSCA) has formed a team to investigate individuals or entities operating crypto financial services without proper licenses. Currently, 30 cases are under scrutiny. The FSCA aims to protect the public and maintain industry fairness by taking decisive action against unlawful crypto businesses. The regulator will […]
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LAPD Investigates $579,000 Bitcoin ASIC Miner Theft, Suspect Released
According to the Los Angeles Police Department (LAPD), a 26-year-old man was arrested and charged with stealing 9,000 worth of application-specific integrated circuit (ASIC) bitcoin miners. Local reports confirmed that the man has been released from jail, and the LAPD stated that the investigation is ongoing. Canyon Country Resident Accused of Stealing 9K Worth of […]
Bitcoin News
Avalanche Blockchain Faces Outage Amid Inscription Wave: AVA Labs Investigates
The Avalanche blockchain has encountered a disruption due to a “stall in block finalization.” AVA Labs’ co-founder, Kevin Sekniqi, suggested that the problem might stem from a recent surge in inscriptions. Avalanche Hits Snag as Block Finalization Stall Disrupts Service Avalanche (AVAX) is grappling with a service interruption, echoing challenges previously seen on the Solana […]
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US Federal Trade Commission Investigates Marketing Schemes of Crypto Firm Voyager
According to a court document filed recently in the Voyager Digital bankruptcy case, the U.S. Federal Trade Commission (FTC) is investigating the marketing of the crypto firm. Like the U.S. Securities and Exchange Commission (SEC), the FTC has objected to Binance US purchasing Voyager’s assets.
FTC’s Objection to Voyager’s Proposed Sale Plan Could Impact Bankruptcy
In a filing in bankruptcy court registered on Feb. 22, 2023, the U.S. Federal Trade Commission (FTC) detailed that it is investigating the marketing schemes of the crypto firm Voyager Digital. “The FTC has commenced an investigation into certain acts and practices of [Voyager] and [the] debtors’ employees, directors, and officers, for their deceptive and unfair marketing of cryptocurrency to the public,” the complaint explains.
The FTC filing says the proposed sale of the debtor’s assets would interfere with the current probe, which could essentially discharge Voyager and specific staff members from alleged “fraud-related debts held by a governmental unit.” The FTC is not the only government agency investigating Voyager. Texas’s securities regulator and attorney general objected to FTX purchasing Voyager prior to FTX’s collapse.
The Securities and Exchange Commission (SEC) objected to the proposed acquisition by Binance US. Despite the objection, Voyager received court approval to proceed with the sale. Voyager’s legal representation, Allyson Smith of Kirkland & Ellis, told the court the sale is “on track” to proceed. “We are on track and don’t anticipate any obstacles,” Voyager’s lawyer stressed. However, the latest filing by the FTC insists that the debtors are “not entitled to a discharge here.”
“Further, even if debtors were entitled to a discharge (through operation of consensual releases, for example), the code specifically precludes the discharge of fraud-related debts held by a governmental unit,” the FTC’s objection concludes. “Wherefore, for the foregoing reasons, the FTC respectfully requests the court deny confirmation of the debtors’ proposed plan; strike Section VIII.B and D of the proposed plan; or grant any other relief the Court deems just and proper.”
What do you think about the Federal Trade Commission saying it is investigating Voyager Digital’s marketing practices? Let us know what you think about this subject in the comments section below.
Chinese Regulator Investigates Firms Blockchain Efforts Amid Stock Surge
A porcelain firm which pivoted to blockchain last year is under investigation by Chinese regulators after its stock price pumped for five straight days.
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Samoa Investigates Church After OneCoin Defied Legal Ban to Sell Products to Investors
n A church in the Pacific nation of Samoa is at the center of scrutiny after ministers invited notorious cryptocurrency Ponzi scheme OneCoin to preach to its congregationn
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Following Expansions, Japanese Regulator Investigates Local Crypto Exchanges
n nn nn Japans Financial Services Agency FSA is looking into two major cryptocurrency exchange platforms as part of an investigation.According to a report published by Reuters Japan on April 23, 2019, the investigation by the financial watchdog is connected to the legal compliance and customer protection standards of trading platforms Fisco Digital Asset Group FDAG and Huobi Japan, the Japanese subsidiary of Huobi Global.FDAG recently acquired the crypto exchange
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UK’s FCA Investigates 50 Firms Suspected of Unlicensed Crypto Operations
The number of complaints relating to crypto assets received by the U.K.’s Financial Conduct Authority (FCA) has risen sharply during the 2018 bear market.
FCA Currently Investigating 50 Cryptocurrency Firms
People rarely call foul play during a bull market. When the charts are all green, who really cares if a project FOMO’d into last November after hearing that it was going to decentralise “X” industry, which is on time with their road map updates or is developing as they promised to during their ICO?
However, as figures from the FCA reveal, the bear market is causing those burned by too-good-to-be-true startups promising the earth last year and delivering very little in 2018 to kick up a fuss.
According to a report in the U.K.’s Telegraph newspaper, the financial watchdog is currently investigating 50 firms believed to be operating without a full licence from the organisation. In May this year, the figure was just 24. Additionally, the FCA stated that there had been a total of seven employees from various firms involved in the cryptocurrency market who had blown the whistle on companies this year. This compares to no reported incidents of similar in the previous three years.
A partner at Moore Stephens accountancy firm, Andrew Jacobs, told the publication about the increasing numbers of complaints the FCA has received during the bear market:
“The huge sums lost as a result of cryptocurrency prices falling this year will have triggered a rash of complaints to the FCA. Now that prices have collapsed, fraud is likely to be exposed, with greater pressure coming to bear on the FCA to ensure that this market can operate transparently and fairly.”
Related Reading: UK Financial Watchdog Mulls Ban on High Risk Crypto Derivatives
Increasing Complaints Coincide with Renewed Warnings from FCA
Just last month Christopher Woolard, a board member of the FCA gave a speech at the Regulation of Cryptocurrencies event in London. He focused on the cryptocurrency phenomena in general, the risks posed to the investors and financial stability, and the FCA, Bank of England (BoA), and Treasury “cryptoassets taskforce,” which made its final report in October.
During the address, Woolard noted the transformation that the space has undergone in the last 10 years, observing that where once there was only Bitcoin, now a sprawling mass of over 2,000 (largely useless) crypto coins and tokens exist.
He then focused on the task force set up between the FCA, the HM Treasury, and the BoA. The idea of the venture is to explore the likely impact on society and the economy of blockchain-based systems and cryptocurrencies more generally.
In concluding, Woolard acknowledged that there were certainly instances of crypto coins and tokens being useful. However, the task force found that the space invited new risks of financial crime and to consumers. Woolard stated:
“[Consumers] may buy unsuitable products, face large losses, be exposed to fraud, struggle to access services or be exposed to the failings of providers such as exchanges.”
Featured image from Shutterstock.
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Japanese Police Investigates Individuals Alleged to be Involved with Cryptojacking
Authorities in Japan are investigating a number individuals who are alleged to have duped website visitors into mining cryptocurrency for them without their permission. If charges are pressed, it will be the first time that cryptojacking has become a criminal case in the nation.
CoinHive Uses the Computers of Others to Mine Cryptocurrency
The law that the individuals are thought to be in breach of bans the use of computer viruses in Japan. The investigation is being carried out by multiple police departments in the nation. These include Kanagawa, Chiba, and Tochigi.
According to local news source Mainichi, the people involved in the suspected cryptojacking created their websites last autumn. When visiting these sites, a piece of software was downloaded onto the visitors’ computers. This was then used to mine the cryptocurrency Monero for the creators of the site and the developers of the software.
The software itself is known as CoinHive. Those who create websites that host CoinHive take 70% of the revenue generated. Meanwhile, the developers who created the software take the remaining 30%. This means that the owners of the computer systems being used to mine the currency don’t benefit at all from their processors being used in such a way. Users of exploited machines may experience their systems responding more slowly than usual or using additional electricity. It can also degrade batteries much quicker than their expected shelf life.
There have been examples of websites using the CoinHive software in a way that isn’t malicious. If clearly mentioned somewhere on the page, the authorities do not consider it a breach of existing legislation. Some publishers of content argue that CoinHive provides a way to monetise a page without relying on advertisers to fund content creation. It is specifically cases in which the software has been used without the consent of the computers’ owners that is thought to be illegal in Japan. This is because systems have been forced to behave in a way that was not the intention of their owners.
There have even been cases where similar software has been used for good. In April, we reported on a project by children’s charity UNICEF. Their ‘HopePage’ was designed to be open by charitable browsers whilst they were using the internet. The visitors could start the software mining Monero and designate as much or as little of their computing power to the activity. The funds generated go towards the various projects the charity are engaged with.
It has been reported that Japanese police are looking into cases involving three individuals suspected of cryptojacking by using software to mine without the permission of the owners of computer systems. One of the suspects is a website designer who has been ordered to pay 100,000 yen for illegally keeping a virus on their machine. The accused argues that it is for non-malicious purposes. The case will be heard at Yokohama District Court soon.
The defence lawyer in the case, Takahi Hirano, has indicated that he intends to refute all charges. According to Mainichi, he has said:
“It’s not right that only Coinhive is painted as the bad guy.”
Featured image from Shutterstock.
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Wall Street Journal Investigates Hundreds of Fraudulent ICO Projects
The Wall Street Journal reviewed 1,450 ICO presentation and found 271 one of them show indications of being scams.
Initial coin offerings are a popular and potently succesfull way for startups to fund their companies growth. They are also essentially unregulated and becoming more and more popular for scammers who create fraudulent sites based on stolen information and little else to lure unsavvy investors into giving them their money.
271 ICOs Exhibit Red Flags
As reported by The Wall Street Journal which performed an exhaustive study of 1,450 ICO sites and projects 271 of them have red flags indicating the project is fraudulent. These red flags include guaranteed no risk returns, extremely high percentage returns, and celebrity endorsements. Of the projects that the journal singled out as suspicious most were found using plagiarized texts, images of team members and or investors taken from stock photography banks, and in 111 cases entire sections of company white papers copy and pasted.
As an example, the Journal focused on a project called Denaro, an online payment service, and its cofounder “Jeremy Boker”. The project is described in investor documents to have a “power house” team who had already raised over 8 million in funds. In fact, Mr. Boker’s photo was a stolen image and no other member of that “power house” team could be identified. Boker turns out to be Jenish Mirani, a banker in Poland who posted his picture on a personal website and was shocked to hear of its reincarnation.
Still, those 271 ICO’s identified as having red flags have garnered over $ 1 billion in investors money according to a review of company statements and online transaction records performed by the WSJ. While some of the projects are still raising money others have shut down or have been frozen by the Securities Exchange Commission, the federal regulatory body which has been tasked with investigating ICOs.
ICOs Have Raised Billion
ICOs have come into the mainstream consciousness since the 2017 rise of Bitcoin’s price brought on an increase in cryptocurrency traders. Since 2017 the SEC estimates ICO’s have raised billion in revenue. This kind of money generates a market for fraud which has lead the SEC to create a warning to investors that many ICO’s may be violating securities regulations or be outright scams.
The regulatory body even launched its own fake ICO website complete with red flag promises of high returns, a line up of fake celebrity endorsements and a “power house” team of its own. The site brings users to a .gov page that explains the way ICO scams work and how to avoid losing money in the cryptocurrency market.
As for Denaro, according to the WSJ article, it has reemerged as something called Pluto Coin with a similar website and an identical white paper. Even Mr. Mirani’s photo has been recycled only this time he has lost his co-founder status.
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