Michael Joseph McElhiney, age 37 and formerly of Spokane, Washington, has pleaded guilty to wire fraud, the U.S. Department of Justice (DOJ) announced on Wednesday. Between March 4, 2021, and Sept. 10, 2022, McElhiney defrauded investors by falsely claiming to operate a cryptocurrency investment fund called Mac Blockchain Solutions. He contacted victims in person, via […]
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BTC-e Operator Alexander Vinnik Pleads Guilty to Money Laundering Charges
According to a press release from the U.S. Department of Justice, Alexander Vinnik, a former operator of the BTC-e exchange, has admitted to a conspiracy to launder money. This admission of guilt comes over six years following his arrest in Greece on July 25, 2017. BTC-e’s Vinnik Pleads Guilty to Money Laundering The Department of […]
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Report: Operator of South Korean Crypto Exchange Upbit Sees a Nearly 40% Drop in Operating Profit
Dunamu, the operator of the South Korean crypto exchange Upbit, recently said it had realized an operating profit amounting to million in the third quarter of 2023. Virtual asset valuation losses contributed to the 81.6% drop in the operator’s net profit for the period.
Operating Profit Down by Nearly 40%
In the third quarter (Q3) of 2023, Dunamu, the operator of the South Korean crypto exchange Upbit, reportedly realized an operating profit of just over million (101.8 billion won). According to a Decenter report, Dunamu’s Q3 operating profit is nearly 40% lower than the 0.9 million realized in the corresponding period in 2022.
Similarly, Dunamu’s Q3 revenue, which stood at approximately 0 million, is 29% lower than the 1 million realized in the same period last year. Also, the crypto exchange operator’s Q3 net profit of .9 million is reportedly 81.6% lower than in the same period last year.
As per the report, Dunamu’s net profit for the period is lower due to so-called virtual asset valuation losses.
Meanwhile, the report revealed that Dunamu is now working on finding ways to mitigate the effects of the recession in the virtual assets market. An unnamed company official suggested that Dunamu is hoping to achieve this by pursuing new business opportunities.
“We will strive to revitalize the blockchain ecosystem and create an advanced investment environment, and do our best to provide innovative services based on Dunamu’s unique technological capabilities,” the unnamed official said.
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US Court Orders Operator of Digital Asset Trading Scam to Pay $54 Million
According to the Commodity Futures Trading Commission (CFTC), Michael Ackerman, the operator of an alleged fraudulent digital asset trading scheme, has been issued with an injunction order which bars him from trading in any CFTC-regulated markets or registering with the CFTC. The injunction also requires Ackerman to pay million in restitution to defrauded victims and a civil monetary penalty of million.
Only Million Was Used to Trade Digital Commodity Assets
The Commodity Futures Trading Commission (CFTC) announced on June 28 that a default judgment granting a permanent injunction has been issued against Michael Ackerman, the operator of a fraudulent digital asset trading scheme. According to the commission, the injunction granted by Naomi Reice Buchwald, a judge with a U.S. District Court, bars Ackerman from trading on regulated markets and registering with the CFTC.
The statement also revealed that Ackerman, who was sentenced to five years of probation with a year of home confinement in Feb. 2022, will also be required to “pay million in restitution to defrauded victims.” Ackerman was further hit with a civil monetary penalty of million for operating the fraudulent scheme.
As per the CFTC statement, the case against Ackerman stems from his alleged role in operating a fraudulent scheme which “solicited and misappropriated funds to purportedly trade digital commodity assets.” Although he managed to successfully extract an estimated million from some 150 individuals and entities, Ackerman only used million to trade. According to the Commission, Ackerman is thought to have used the remaining funds for “personal use or to prolong the fraudulent trading scheme.”
Injunction Orders May Not Lead to Recovery of Funds
The CFTC also accused Ackerman of lying to his victims about the monthly returns he was generating via the fraudulent trading scheme. In order to hide the fraud, Ackerman allegedly provided his customers with “false accounting statements, newsletters containing false trading returns, and fictitious screenshots of the amount of money under management.”
Meanwhile, the CFTC also used the announcement to warn victims of fraudulent digital asset scams that injunction orders may not lead to the recovery of funds.
“The CFTC cautions that orders requiring payment of funds to victims may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable,” the CFTC said.
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Connecticut Banking Regulator Fines Crypto ATM Operator Bitcoin of America
According to the Connecticut Department of Banking, commissioner Jorge Perez revealed that the regulator has reached a settlement with the crypto automated teller machine (ATM) and kiosk operator Bitcoin of America. As part of the settlement, Bitcoin of America will pay ,000 in restitution, and the firm will be required to cease operations in Connecticut.
Crypto ATM Operator Bitcoin of America Settles with Connecticut Regulator
2023 has been a challenging year for the crypto ATM industry. General Bytes, a prominent ATM manufacturer, experienced a hack, resulting in a loss of .5 million. Moreover, digital currency ATMs across the United States have been rapidly shutting down.
In February, the United Kingdom initiated crackdowns on crypto ATM operators, conducting raids on various sites. The enforcement on unauthorized crypto ATM operators was further expanded by the U.K. the following month.
Connecticut’s Department of Banking recently announced that Bitcoin of America will be discontinuing its crypto ATM business in the state. According to the banking regulator, four consumers in Connecticut were allegedly scammed out of tens of thousands of dollars through the use of these kiosks.
“This case highlights the need to be cautious when using virtual currency kiosks,” the state’s banking commissioner Jorge Perez stated. “Scammers are preying upon consumer’s vulnerabilities and tricking them into depositing cash into kiosks, which can be found throughout the state. The department is taking steps to be sure that the owners and operators of these kiosk are properly licensed and adhere to the law.”
The complaint additionally states that Bitcoin of America was obligated to pay a settlement of ,000 for consumer losses in Connecticut. The banking regulator asserts that Bitcoin of America was “mandated to obtain a money transmitter license.”
Furthermore, the banking regulator provided specifics that it has collaborated with the Connecticut State Police to advance a bill known as HB 6752 — “An Act Concerning Digital Assets.” This bill would grant the banking commissioner of Connecticut the authority to establish regulations pertaining to the virtual currency industry.
What are your thoughts on the stricter regulations in the virtual currency ATM industry? Share your views in the comments section below.
US Court Orders Operator of South African Bitcoin Ponzi Scheme to Pay Over $3.4 Billion
Johann Steynberg, the founder and CEO of Mirror Trading International, has been ordered to pay over .73 billion in restitution to victims of his bitcoin ponzi scheme. The court has also ordered Steynberg to pay a civil monetary penalty of a similar amount. The Commodity Futures Trading Commission (CFTC) conceded that orders requiring payment of funds “may not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.”
‘Largest Fraudulent Scheme Involving Bitcoin’ in the History of the CFTC
A United States Federal Court recently handed down a default judgment and permanent injunction against Johann Steynberg, the CEO of the now-defunct bitcoin ponzi Mirror Trading International (MTI). According to a statement released by the U.S. derivatives regulator the Commodity Futures Trading Commission (CFTC) on April 27, Steynberg is required to pay ,733,838,372 in restitution to defrauded victims and a ,733,838,372 civil monetary penalty.
The derivatives regulator’s statement also revealed that the penalty handed down by the court “is [the] highest civil monetary penalty ordered in any CFTC case.” The court action itself is reported to be the “largest fraudulent scheme involving Bitcoin charged in any CFTC case.”
As previously reported by Bitcoin.com News, Steynberg, who was based in South Africa at the time, had repeatedly faced allegations of operating a bitcoin Ponzi scheme before he fled to Brazil in December 2020. Shortly after his disappearance, liquidation proceedings against MTI were instituted by victims based in South Africa.
Almost a year after he disappeared, Steinberg was captured by Brazilian law enforcement and is awaiting his extradition to either the U.S. or his native home of South Africa.
Steynberg and MTI Failed to Comply With CPO Regulations
As per the CFTC statement, the U.S. court order outlines Steynberg’s alleged fraudulent activities as well as his failure to comply with regulations.
“The order finds that Steynberg, the founder and CEO of Mirror Trading International Proprietary Limited (MTI), a company currently in liquidation in the Republic of South Africa, is liable for fraud in connection with retail foreign currency (forex) transactions, fraud by an associated person of a commodity pool operator (CPO), registration violations, and failure to comply with CPO regulations,” reads the CFTC statement.
Although MTI was primarily operating and targeting victims based in South Africa, the CFTC statement claimed that Steynberg and his company had accepted bitcoin from “some 23,000 individuals in the U.S.” without being “registered as a CPO as required.” The regulator also alleged that Steynberg and MTI had “misappropriated all of the Bitcoin they accepted from pool participants.”
Meanwhile, the CFTC also acknowledged in the statement that the penalty handed down by the court may “not result in the recovery of any money lost because wrongdoers may not have sufficient funds or assets.”
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Major Crypto ATM Operator Coin Cloud Files for Bankruptcy
One of the largest cryptocurrency ATM operators, Coin Cloud, which claims to operate more than 5,000 crypto ATMs, has filed for bankruptcy in the U.S. The company’s largest creditor is Genesis Global Trading, whose parent company also recently filed for bankruptcy in the U.S.
Coin Cloud Files for Bankruptcy
Cash Cloud Inc., a digital asset ATM operator doing business as Coin Cloud, voluntarily filed for Chapter 11 bankruptcy on Tuesday.
In its filing with the U.S. bankruptcy court for the District of Nevada, Coin Cloud declared an estimated number of creditors of between 5,000 and 10,000. In addition, the company estimated that its total assets range between million and 0 million while its total liabilities fall between 0 million and 0 million.
Crypto lender Genesis Global Trading Inc. is listed as Coin Cloud’s largest unsecured creditor, with a total claim of 6,353,435. After deducting the value of collateral, Genesis Global Trading’s unsecured claim amounts to 8,568,655, the filing shows.
On Jan. 19, Genesis Global Holdco LLC and two of its lending business subsidiaries, including Genesis Global Capital, filed for Chapter 11 bankruptcy in the Southern District of New York. However, the filing does not include Genesis Global Trading. Genesis’ bankruptcy followed a lawsuit against the company by the U.S. Securities and Exchange Commission (SEC) alleging that the crypto lender offered and sold unregistered securities to retail investors.
On its website, Coin Cloud claims that it operates more than 5,000 two-way crypto ATMs across the U.S. and Brazil. The machines allow users to buy and sell over 40 cryptocurrencies, including bitcoin, bitcoin cash, litecoin, and ether. They also offer a number of stablecoins, gaming tokens, and decentralized finance (defi) coins.
Crypto ATM tracking website Coin ATM Radar ranks Coin Cloud as the second largest crypto ATM operator with 4,826 machines — second only to Bitcoin Depot with 6,634 machines. According to the tracking site, there are currently 38,340 crypto ATMs in 81 countries.
Besides Genesis Global, a number of crypto firms filed for bankruptcy last year, including FTX, Core Scientific, Celsius Network, Voyager Digital, Three Arrows Capital, and Blockfi.
Do you think more crypto ATM operators will file for bankruptcy? Let us know in the comments section below.
How is SAI.TECH, a recently listed Bitcoin mining operator, driving towards carbon neutrality?
The past year has experienced a boom in SPAC crypto mergers, with companies like Core Scientific Inc. Bakkt and Cipher Mining being a few notable examples. SAI.TECH (“SAI” or “the Company”) got on the wave of SPAC listings right before SPAC mergers got more difficult. Having gotten officially listed on Nasdaq on May 2nd, SAI is the first “chip heating” concept stock on the exchange, with its CEO & founder Arthur Lee also becoming the youngest Chinese CEO ever listed.
Bitcoin has become one of the most attractive emerging assets on the market in recent years, but the need for increasingly energy-intensive computing infrastructure has caused concerns about its sustainability. By promoting ESG standard technologies and solutions, SAI, as a global energy-saving bitcoin mining operator and a clean-tech company, is trying to prove to the market that the feasibility and the company’s business model might leads bitcoin mining to a more sustainable future. We sat down with Arthur to talk about the company’s innovative technology.
Q1: First, I would like to congratulate SAI on getting listed on Nasdaq. Can you give our readers a brief introduction of SAI? What’s the inspiration for your innovation?
My inspiration is based on what I see as the two major trends of the early 21st century – sustainable development and decentralized digital network. Over the past 20 years, sustainable development has become a shared goal globally. Another trend is, decentralized digital cryptocurrency like Bitcoin has experienced a boom, ushering in the future of web 3.0. The high value of Bitcoin has proved its significance but has in equal parts been criticized for its high energy consumption and un-sustainability. As a result, how to better solve the energy consumption problem while ensuring the stable operation of the Bitcoin network has become an unavoidable dilemma facing us.
As a Bitcoin mining operator, SAI foresaw this problem as early as 2019 and has been actively looking for partnerships with large mining pools. With the support from one of our close partners ViaBTC, a world-leading crypto mining pool, we introduced SAIHUB, a cost-efficient solution created to reduce the high costs involved in the mining process. After three years of development, SAIHUB has leapt from 1.0 to 3.0. The latest SAIHUB 3.0 is an integrated and decentralized solution designed to horizontally integrate the computing, power and heating industries to build a more efficient and sustainable infrastructure for Bitcoin mining.
Q2: How can the Bitcoin mining infrastructure become more sustainable? How does SAIHUB solution factor in that?
According to calculations, about 99% of the electricity consumed by Bitcoin mining machines turns into heat energy. This part of the heat energy has been neglected for a long time, so it is referred to as “waste heat.” Instead of using an extra huge amount of electricity to cool data centers, our SAIHUB solution is capturing that waste heat and using it to defray energy use elsewhere.
With the help of SAI’s patented waste heat utilization technology, 90% of the heat generated by the mining process can be recovered and reused into heating sources for various residential, commercial, industrial, and agricultural application scenarios.
In recent years, the use of renewable energy for Bitcoin mining has dropped significantly as various factors have led natural gas and coal to become more popular sources of power for the industry. This change has made SAI’s mission even more vital.
Q3: Can you introduce more of the SAIHUB solution? What’s the history behind this solution?
The evolution of SAIHUB has gone through three stages. At the 1.0 stage (2019-2020), SAIHUB used 16nm chips. The power was 50kw, with hash rates around 350T. This solution was able to reuse waste heat for single-house heating services. The SAIHUB 2.0, 2020 – 2021, was a step forward, adopting 7- 8nm chips, with the power for a single SAIHUB being around 250kw and hash rates leaping to 5P. This version was enough to recycle the heat for a small community or an agricultural greenhouse, thus enabling us to provide large-scale heating services.
From 2022 onwards, SAI enters the SAIHUB 3.0 stage. SAIHUB 3.0 lowers the core costs of the mining process, including heating, power, computing, and chip. We have successfully run three pilot projects of clean computing data centers, covering more than 30,000 square meters of greenhouses, large commercial buildings, and shopping malls for heating.
At this stage, we are willing to open up our patented liquid cooling and waste heat recovery technology to scale up the SAIHUB business model, enhance the efficiency of the whole industry together with our partners, including ViaBTC Pool, and promote the clean transition of the computing industry.
Q4: You just mentioned the partnership with ViaBTC Pool. Could you please introduce this partner in more detail?
ViaBTC is our strategic partner and also one of the major supporters of SAIHUB. As an all-encompassing crypto mining pool established in 2016, ViaBTC is well-recognized for BTC mining and has extensive influence in that field.
As global warming escalates, the international call for carbon neutrality is also growing stronger. The mining of PoW-based cryptos like Bitcoin consumes a massive amount of fossil energy. ViaBTC shares our belief that we should boost the innovation of clean energy technologies to improve the utilization of clean energy in crypto mining and reduce its environmental impact.
At the same time, we have also engaged in profound exchanges and cooperation with ViaBTC regarding the SaaS solution. In the future, we also hope to partner up with more companies in the field of BTC mining that share our beliefs. Together, we will expand the blockchain space and accelerate the progress of Bitcoin.
Q5: SAI recently took a major step into the tech market by getting listed on Nasdaq; what gives SAI an advantage in the competitive market of Bitcoin mining innovation?
Bitcoin has always been associated with high energy costs and unsustainable infrastructure, and the massive amounts of heat produced have been a constant cause for concern. Few people, however, have thought of using this resource as an asset, and this insight is what makes SAI stand out. Not only that, but our company also consists of an elite team with rich experience in the field.
Although the cost of electric heating is currently higher than that of fossil energy heating, as carbon taxes and various policies increase the price of fossil fuels, this will eventually change. It is estimated that the cost of using natural gas to obtain heat will be about 65% higher than that of electric heating by 2050, meaning that heating will inevitably be primarily electric. In this case, SAIHUB has an inherent advantage over fossil fuel-based heating solutions in the long term.
Let’s review the carbon neutrality roadmap committed by the world’s major countries. Most developed countries, including the United States, Japan, and the United Kingdom, have set the deadline to be 2050. However, the recent Russian-Ukrainian tensions have brought the European energy market to a standstill. In addition to the price increase of more than 200% for natural gas, countries like the United Kingdom must reconsider using coal to replace natural gas power generation. The contribution value of clean energy to achieve carbon neutrality may also require a considerable reduction in consumption levels according to current forecasts, which means that in the next twenty-eight years, energy efficiency plans such as those represented by SAIHUB will take on more responsibilities, which is a challenge, but also a rare historical opportunity.
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