Hong Kong Cryptocurrency Entrepreneur Accused of Scamming Investors of Millions

On January 7, 2019, The South China Morning Post reported that several residents had been duped of over HK$3 million (~$382,000) in a crypto mining scheme by entrepreneur Wong Ching-kit.

Backstory: Face of a Mining Operation

Wong Ching-kit, a cryptocurrency entrepreneur, has been accused of running a scam by several

Hong Kong residents who accuse him of making away with just under $400,000 after convincing them to invest in cryptocurrency “mining machines.”

The individuals in question are being represented by the Democratic Party, who have said that over 20 people have filed complaints about Wong since last year regarding their same mining scheme.

The amount of money lost from each individual ranges between ~$2,550 and ~$127,000.

This isn’t the first controversial incident that Wong has been involved in. Known as “Coin Young Master” on the Internet, he was allegedly connected to a recent incident in Sham Shui Po in which up to ~$765 in cash was thrown from a high rise building. He was arrested after the stunt for disorderly conduct.

His flashy persona is flaunted online where he promotes various cryptocurrency ventures including one called “File Cash Coin” of which he is allegedly the founder.

The Scam

Wong’s Social media presence was the main source for finding investors for his schemes as several individuals have reported finding out about him online. Wong apparently asked investors to hand over money in mining technology for “filecoin” and promised them that their investment would reap profits within three months.

It was soon discovered, however, that the cryptocurrency in question isn’t traceable on the global market and thus, useless. Wong did not, however, return investors’ money as promised. Ms. Chiu, a scorned investor who lost more than ~$15,300 said:

“At first, I was told I could get a refund if filecoin could not be launched in time. [But] when we asked for a refund, he used delaying tactics and made different excuses to turn us down.”

Democrat Ramon Yuen Hoi-man, a Sham Shui Po district councilor, has urged that the authorities get involved and has called for more regulations involving cryptocurrency investments.

Wong’s Response

Despite the many claiming that he has cheated them, Wong has maintained an air of bravado through it all and has said online that he hadn’t cheated anyone out of money.

“I sell mining machines only but am treated as if I have killed people. When they make money, there is no thank you. When they lose money, they call it a scam,” he said. He has also claimed that these allegations are part of a smear campaign brought on by his business rivals.

The authorities have announced that there will be an investigation opened into Wong’s case. This is, they claim, due to the eight figures in his bank account and his undisclosed source of income which could count as money laundering. Wong was born Kwan Tsz-kit but changed his name after being convicted of theft back in 2012.

The perpetuation of cryptocurrency scams online is nothing new as fraudsters go as far as impersonation to carry out their scams, often succeeding in stealing millions from victims.


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Author: Tokoni Uti
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Colorado Regulators Shut Down Four More Fraudulent ICO’s

According to a recent press release, Colorado Securities Commissioner Gerald Rome signed orders instructing four companies to cease offering unregistered securities in the state.

Colorado’s Department of Regulatory Agencies (DORA) took a firm action against four Initial Coin Offerings (ICOs). DORA has ordered the companies to immediately stop and refrain from conducting all activities in violation of state finance laws. The latest crackdown brings the total number of “cease-and-desist orders” against cryptocurrency companies in Colorado to 18.

The affected ICOs include Cybersmart Coin Invest, CrowdShare Mining, Cred, and Global Pay Net. While the companies’ locations are unknown, according to a spokesperson for Colorado’s Division of Securities, they advertised their fraudulent products and services to residents of Colorado.

Global Pay Net

According to the press release, Global Pay Net is a company that claims to offer GLP Coins, which provides a blockchain-based international financial platform. The company also listed several prominent figures on its websites who have denied any knowledge of the company.

Cred

The second company is Cred, which according to the report, claims to offer a tokenized mobile application that promotes green energy. The firm markets as an ICO for its cryptocurrency dubbed “Cred (CX).” “The website asserts that “Cred holders can rest assured knowing that their Cred will be worth tangible value,” the post reads.

CrowdShare Mining

The third company is known as CrowdShare Mining (CSM) which claims that it will mine digital coins on behalf of investors through green energy sources. In return, investors will pocket 50 percent of the mining profit.

CyberSmart Coin Invest

The last company is CyberSmart Coin Invest which offers digital token named “CyberSmart Coin (CBST).” According to the site, they use bots to trade on Bitmex and other cryptocurrency exchanges. The site also claims to have a secret method of gaining profit. Investors also get 20-35% dividends on a monthly basis.

At least two more cessation orders are still pending, according to the official announcement.


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Twitter: Bitcoin Scammers Hack Retail Giant Target’s Verified Account

A number of high profile, verified Twitter accounts including retail giant Target and The Body Shop were hacked in what appears to be a coordinated campaign to promote yet another iteration of the now-ubiquitous crypto giveaway scam. A series of tweets by verified Twitter handles endorsing the bitcoin giveaway scam were highlighted by a number of social media users, as cybercriminals behind the long-running scam launch the latest effort to take advantage of less savvy Twitter users.

Target acknowledged the scam after regaining control of its account and deleting the unauthorized tweets.

A New Twist on an Old Scam

Screenshots taken before the tweets were taken down show that a promoted tweet from the official Target account announced a giveaway of 5,000 BTC to the account’s followers.

Source: Twitter

Like so many other similar scam messages posted in the past, it was written in poor English with a distinct lack of adverbs and pronouns, indicating that the hackers are not native English speakers. The key difference with this iteration of the scam is that a substantial number of verified Twitter handles were enlisted to respond to the tweet and give it a measure of legitimacy by extension.

To this end, more than five verified, high profile accounts including those belonging to the Toledo Rockets, The Body Shop, Universal Music Czech Republic, the Agriculture and Horticulture Development Board (AHDB), and even the UNHCR Serbia account were compromised and could be seen posting responses to the scam tweet in the customary faux-enthusiastic manner employed by the ubiquitous Twitter scam botnet.

It remains unclear how the hackers were able to compromise so many verified accounts at once, with prior examples of such hacks only succeeding in taking down one or two at a time. Previous attempts at hijacking high profile Twitter accounts have mostly revolved around cloning the accounts and not directly attacking and taking them over.

Amidst the confusion generated by the tweet and the verified accounts responding to it, hackers also compromised the Cap Gemini Australia Twitter account, replacing the global consulting firm’s name with “Elon Musk” and posting a similar message advertising a purported crypto giveaway from the Tesla founder.

Using a crude mix of semi-factual information (Musk is indeed stepping aside, but as chairman of Tesla, not “Director”) and psychology that connects a prominent name to Twitter’s verification tick, the cybercriminals hope to isolate the most gullible marks who are more likely to fall victim to the scam, when in actual fact it may seem transparently obvious to more savvy users. This strategy has previously been explained as a tactic used by email scammers to thin out the field by removing false positive targets and isolating those who are least likely to carry out basic due diligence.


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Author: David Hundeyin
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World’s Top Cryptocurrency Scams

Currency scams and illegal business dealings give Bitcoin a bad name. And while Bitcoin Australia likes to show our audience the potential and awesomeness of cryptocurrencies, it is important to remember that this is not always the case. To raise awareness, we’ve rounded up the top four scams in the industry.

 

OneCoin

This currency is marketed as a cryptocurrency exchange with its own secure and private blockchain network. In fact, OneCoin has become known as one of the biggest scams in the industry.

The coin is promoted by two offshore companies in Belize and Dubai, both owned by Bulgarian magnate Ruja Ignatova, and a quick scan of OneCoin’s website doesn’t raise red flags.

Self-described as “the first transparent global cryptocurrency for everyone,” the company presents a sleek and polished look to the public. It claims to provide affordable educational materials to traders, ranging in price from $200 to more than $300,000.

However, behind this veneer lies a more sinister reality.

OneCoin has been widely exposed as a ponzi scheme bent on stripping unsuspecting investors of their savings. When a customer buys the ‘educational material’, their money is transferred to a pre-existing client under the guise of an investment return.

This cycle continues until the number of pre-existing customers exceeds the amount of money being raised by first-time buyers.

OneCoin and its recruiters defend their brand. They maintain that OneCoin is a legitimate business. However, reports are constantly emerging of investors being taken advantage of.

As far as we’re concerned, just stay clear.

Centratech

While its founders are now under arrest and charged with fraud, CentraTech rose to popularity in 2017 when it raised $32 million in an initial coin offering.

The company presented itself as a cryptocurrency exchange in partnership with Visa and Mastercard. This couldn’t be further from the truth. In fact, the credit card companies had never heard of Centratech, let alone agreed to back it.

But this was just the beginning.

Centratech’s board of directors was a lie, assembled using stock images of random people or photos stolen from Facebook. Nathaniel Popper, a writer with The New York Times, tweeted this reaction to his followers:

 

Nathaniel Popper

In a media release following the Centratech trials, deputy U.S. Attorney Robert Khuzami does not mince his words.

“As alleged, Raymond Trapani conspired with his co-defendants to lure investors with false claims about their product and about relationships they had with credible financial institutions. While investing in virtual currencies is legal, lying to deceive investors is not.”

Boxer Floyd Mayweather and rapper DJ Khaled, alongside a number of celebrities, promoted Centratech.

Dragon Coin

News emerged in August that a Finnish investor lost nearly $24 million in bitcoin thanks to the shady dealings of Dragon Coin. The Thai cryptocurrency markets itself as the currency for the entertainment industry. In reality, it’s a currency for scammers.

An investigation by Thailand’s Crime Suppression Division (CSD) reveals Finnish businessman Aarni Otava Saarimaa was fleeced by a gang targeting cryptocurrency investors.

The fraudsters pitched a plan to build a casino and linked digital currency, but after amassing investment funds from their targets, the Thai gang immediately cashed out. The earnings total nearly 797 million Thai Baht.

According to the Asia Times, “about one quarter of this was said to have been used to buy 14 plots of land, with the rest being deposited into bank accounts of three suspects, all siblings.”

The suspects include Thai actor Jiratpisit Jaravijit and his family.

NCR Coin

Based out of Surat in western India, NCR Coin is the latest cryptocurrency Ponzi scheme to make headlines.

In June 2018, news emerged of a company selling fake currency with no investment returns. Instead, people found themselves stripped of their savings with no recourse According to BitcoinExchangeGuide.com, the scheme has 30 victims and counting.

The Hindustan Times reported that this is not the first scam like this in India. According to a correspondent in Lucknow:

“[The fraudsters] created a user ID on different virtual currency exchange websites and put bitcoins on sale. They first lured traders to purchase the bitcoins at low prices and even transferred some into their e-wallets to win their trust.”

After establishing trust, the NCR Coin scammers transferred the original currency to their bank accounts and proceeded to vanish.

The Indian police have since arrested six people with connections to the scam.

While the stories above are worse-case scenarios, anyone anywhere can be caught up in a cryptocurrency scam. In such a young industry, criminals see opportunities to defraud and steal from inexperienced investors.


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Author: Bitcoin Australia
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Pope Francis Latest Target of Crypto Giveaway Scam on Twitter

Pope Francis has become the latest victim of crypto scammers on Twitter, as a network of bot accounts promoting scam ICOs and fake crypto giveaways continue to target public figures both within and outside the crypto world.

LIONBIT

Familiar Pattern

Earlier in the month, security researchers working at Duo Security unveiled the results of a study analysing 88 million public Twitter profiles, revealing a sophisticated network of dummy accounts, known as a botnet working to promote a crypto giveaway scam by impersonating high profile individuals and artificially boosting their tweet rankings using likes and retweets.

A tweet posted by Pope Francis earlier today had one such artificially boosted tweet as its top ranked response. The tweet is from a duplicate handle, “@_Poontifex,” designed to mislead casual viewers into thinking that it is the real pope’s handle “@Pontifex.”

Unsurprisingly, the tweet is promoting a fraudulent crypto giveaway:

Another dummy account, branded “@RicardoStark7,” then responded to the tweet with faked excitement as other bots retweeted and liked the fake pope handle’s tweet, gaming Twitter’s quality control mechanism to shift it to the very top of the replies to the real pope’s tweets.

https://twitter.com/RicardoStark7/status/1035205972728401921

To a casual Twitter user, it may thus seem as though Pope Francis has responded to his own tweet, advertising some kind of giveaway, which is how the scam operates.

TIP

Several high profile Twitter accounts have been targeted this way in the past. Some of these include Elon Musk and Vitalik Buterin, who was sufficiently impacted by the scam to change his Twitter name and biography to a message disclaiming any involvement in the scam.

In May, CCN reported that the Vertcoin twitter account was actually hijacked and used to spread the “ETH giveaway” scam.

Gaming Twitter’s Algorithms

According to Duo Security Principal Security Engineer Jordan Wright, who spoke to TechCrunch earlier in August, the botnet is made up of more than 15,000 dummy accounts tweeting crypto giveaway scam messages and gaming Twitter’s quality control mechanism by retweeting and liking each other’s posts.

What this achieves is that it artificially boosts the popularity of the accounts, with some of them even showing up under Twitter’s “Who to Follow” recommendations list. Even worse, the actual number of bot accounts is likely to be far higher than 15,000.

Wright also revealed that the botnet makes use of a “three-tier hierarchical system,” unlike the typical flat structure of conventional botnets, indicating that as anti-spam research advances, botnets and the people that control them are also evolving and developing new tactics and strategies to extract money from Twitter users.


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Peoples Token

Report: More Than Three-Quarters of ICOs Were Scams

About half of the existing crypto-asset market today – numbering some 1,500 – functions on top of an existing blockchain like ethereum, according to a new report.



The study from Satis Group, which forms part of a five-entry series analyzing the state of the cryptocurrency ecosystem, explores the state of what it calls “platform networks,” honing on ethereum as well as other blockchains like NEO, EOS and Cardano, among others.

In looking at the “market share” of those platforms, it’s perhaps not surprising that ethereum constitutes the bulk of that figure – some 86 percent – followed by Waves at 2.9 percent and NEO at 2.3 percent.

Whether that state of affairs will change is an open question, and Satis Group outlines a number of advantages in ethereum’s corner as it stands today.

“It remains to be seen whether any platform will be able to surpass Ethereum’s adoption, which has a high degree of first mover advantage (nearly a three-year head start, plus the entire market share of the ICO discovery phase through 2017) in addition to high levels of community support, liquidity, and developer buy in,” the report states, adding:

“Emerging platforms have been able to differentiate themselves with higher levels of transaction throughput (transactions per second), which generally comes at the cost of higher levels of centralization.”

Scams prevalent

Yet for all of the growth around these crypto-assets, the report also came to a troubling conclusion: the vast majority of ICOs launched to date have proven to be fraudulent in nature.

The report calls them “Identified Scams” – that is, projects that “did not have/had no intention of fulfilling project development duties with the funds, and/or was deemed by the community (message boards, website or other online information) to be a scam.”

“On the basis of the above classification, as a percentage of the total number of ICOs, we found that approximately 78 [percent] of ICO’s were Identified Scams, ~4 [percent] Failed, ~3 [percent] had Gone Dead, and ~15 [percent] went on to trade on an exchange,” the report states.

Other researchers have looked at projects that failed to maintain traction in the months following their respective sales.

A recent report from a team at Boston College similarly found that more than half of the token projects they examined fell into inactivity within four months of the sales.

Yet in terms of the actual dollars that have gone into ICOs, Satis found that just 11 percent of funding went to those it identified as scams, or about $1.7 billion. That figure actually drops to a minute 0.3 percent when you cut out the three biggest scams – Pincoi, Arisebank and Savedroid – that have been identified.

Regulatory shift

The report also details how many projects have been seeking sunnier shores, so to speak, in terms of finding more appealing regulatory environments.

The number of ICO fundraising projects based in the Cayman Islands rose from a reported 3% to 40% in the last year while the U.S. faced a sizeable drop from 32% to 10%.

Hinting to subsequent reports yet to be published by Satis Group, author Sherwin Dowlat wrote that a more comprehensive analysis into the “wide variety” of regulatory approaches taken by states within the U.S. specifically would be provided “in a subsequent note.”

This being the second in the research series, Satis Group is set to publish three more reports all aimed at delivering “a comprehensive understanding of the pillars that comprise the crypto-asset universe.”


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Author Christine Kim 
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Crypto Coin Graveyard Fills Up Fast as ICOs Meet Their Demise

  • More than 1,000 coins declared dead by website Coinopsy
  • Investors have already lost billions to failed crypto projects


That mournful sound you hear? It’s the funeral procession of yet another cryptocurrency.

As the digital money frenzy of the past few years cools, the crypto coin graveyard is filling up. Dead Coins lists around 800 tokens that are bereft of life, while Coinopsy estimates that more than 1,000 have bought the farm.

The carnage is mostly the consequence of failed projects from the thousands of startups that used initial coin offerings to raise billions in funding, and a global regulatory crackdown on questionable practices and scams. Names like CryptoMeth, Droplex and Roulettecoin may have been a clue to the coins’ dim prospects.

“There has obviously been a lot of fraud and hype in the ICO market,” Aaron Brown, a business author and investor who writes for Bloomberg Prophets, said in an email. “I accept figures I have seen that 80 percent of ICOs were frauds, and 10 percent lacked substance and failed shortly after raising money. Most of the remaining 10 percent will probably fail as well.”

 

Fate of Coins with $50 Million-Plus Market Caps

Fewer than 4 percent of ICOs raising from $50 million to $100 million were successful or promising, according to a March analysis from ICO advisory firm Satis Group. Most ICOs were raising money without having an experienced development team or an actual product, just white papers studded with promises.

Blockchain startups are faring worse than their counterparts in other industries. Of 103 companies that received initial seed or angel funding in 2013 and 2014, only 28 percent managed to raise additional funding, according to CB Insights’s October report. That compares with 46 percent of the 1,098 tech companies that raised a second round in the U.S. between 2008 and 2010. Among tech companies, 14 percent went on to a fourth round, while only 2 percent of the blockchain companies did, the researcher found.

“I don’t think we found the killer app yet,” said Arieh Levi, an analyst at CB Insights. “It just seems like there’s been a lot of projects tried, but there aren’t really many users of blockchain protocols beyond speculators and traders.”



The failed projects have cost investors billions. Barring outliers like BitConnect, which saw its market cap shrink to about $4 million from nearly $3 billion in December, most of the ICOs that birthed these coins were relatively small, but investors may have still lost as much as $500 million, estimated Lex Sokolin, global director of fintech strategy at Autonomous Research LLP.

The book of the dead is expanding rapidly now that prices have collapsed across the crypto market. The industry’s bellwether, Bitcoin, is down 57 percent this year. And the number of articles declaring its demise is up to 319 since 2010, according to 99Bitcoins. About 80 percent of the 1,586 coins that surveyor Finder.com looked at declined in the week ended June 25, by an average of 19 percent.

“We will see a lot more abandoned ICO that never make it to an exchange,” Richler Vanierwitz of Coinopsy, said in an email. “ICO investment will become very unprofitable.” ICOs have raised $11.75 billion this year alone, according to CoinSchedule.

But there is always the afterlife.

A new breed of crypto undertaker sees this as an opportunity. Startup CoinJanitor has partnered with Dead Coins, saying it wants to help investors and developers recycle failed coins with market caps of under $50,000.

“We take as many coins off the market as possible,” CoinJanitor Chief Executive Officer Marc Kenigsberg said. “Every time we absorb a project, we have more audience and more marketing reach. Instead of linear growth, we should hit some kind of hockey stick growth. All the tokens we get we destroy, we actually burn them. Turn off the entire blockchain.”

CoinJanitor plans to take over dead projects, and to burn the dead coins. To do so, it’s created its own token.

“Last year, there were many instances where a project that was essentially ‘dead’ was picked up by a developer, who might have been passively mining it, and brought back to life,” Lucas Nuzzi, director of technology research at Digital Asset Research, said in an email. “Out of nowhere, a new version would then come out and the price appreciated, regardless of the substance of the changes made by the developer. This has not happened frequently this year, and it’s hard to discern what are valid inflows versus potential spoofs.”

Alas, most of the dead coins remain in the grave.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Olga Kharif
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TRON Genesis Hard Fork: an elaborate and sophisticated scam

A scam attempt involving TRON was thwarted today, but not before causing some chaos on social media after the account of a moderator in the coin’s subreddit was compromised in an attempt to make the fake “hard fork” look credible.


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Just weeks after the TRON mainnet went live, the community got hit with one of the largest and most well-executed scams in cryptocurrency history, with two different “hard forks” reportedly announced on blogs that looked strikingly similar to the Tron Foundation’s official outlets.

One of these announcements, now deleted by Medium after the account that created it got suspended, was for something called “Tron Genesis.”

According to the actors in this particular scheme, a group of developers dissatisfied with founder Justin Sun’s “loss of direction” decided to fork the project using Skycoin’s blockchain.

“Justin Sun lost his direction and we couldn’t back him up anymore. Competing directly with Ethereum is not what we wanted nor do we think the team is capable to become [sic] serious competitors to Ethereum which is a class of its’ [sic] own. We wanted to be a truly decentralized entertainment blockchain platform on a decentralized internet, not another Ethereum,” the scammers wrote.

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To supposedly claim these “TRXG” tokens, holders of TRX were asked to follow a convoluted process that involved the creation of a new Ethereum wallet on MyEtherWallet and the exchange of private keys – something that raises alarms immediately. What makes this scam sophisticated, however, is how it was propagated through social media. On Reddit, the announcement was pinned by one of the moderators of r/Tronix, the largest subreddit for TRON.

It turns out that the moderator’s account was compromised and the scammers managed to infiltrate the subreddit, making the announcement look legitimate, as if though there really was a mutiny in the Tron Foundation. Fortunately, users picked up on the scam quickly and flooded the announcement with comments warning others that this is fake, followed by speculation on what happened to the moderator’s account.

Scams like these could cripple a coin, even if not successful. It turns out that, at least this time, TRX is chugging along, recovering firmly from a slight dip in the middle of the day just after the scandal broke out.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Bitcoin Ponzis on the rise

The number of suspicious cryptocurrency investment schemes being reported to local law enforcement and other regulatory authorities is on the rise.

This has emerged in the wake of the Hawks’ investigation into an alleged R1 billion cryptocurrency Ponzi scheme run by BTC Global.


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“There are others,” said Hawks spokesperson Brigadier Hangwani Mulaudzi. He said they were “under inquiry” and could not be named at this stage.

Over 1 000 people who had lost money in the alleged BTC Global scam had come forward with affidavits.

“People are coming in every day.”

Cryptocurrency investment schemes BitClub Network and Four Corners Alliance Group allegedly show the hallmarks of either a Ponzi scheme or a hybrid Ponzi and pyramid scheme.

There are no telephonic contact details on either of the BitClub Network and Four Corners Alliance Group websites.

City Press e-mailed questions to Four Corners Alliance Group, which has a business address in Las Vegas, the US, and in Montana Park, Pretoria. Questions were sent to BitClub Network via a website contact form. Neither site had responded by late Friday.

Among the red flags is the offer of financial reward for recruiting new members, or larger payouts for larger numbers of investors in the pool.

Mulaudzi said the BTC Global scheme had affected about 28 000 South Africans from all walks of life.

He said many had lost over R100 000 when the scheme crashed in early February, although “some got lucky” and pulled their money out in time.

Sanet Schoeman, of Kempton Park, said she lost R44 000 of her initial R62 000 investment with BTC, which promised to invest in Bitcoin and pay returns of 2% per day, or 14% per week.

Schoeman said when she started a new job last year she wanted to invest her pension payout from her previous job. A colleague suggested BTC Global. She said that at the end of October last year she invested R30 000 for herself and, in November, R17 000 for her husband. In January this year, she put R15 000 into a BTC Global electronic wallet for her son.

She said the promised returns initially showed in the wallet. Each week, an investor could choose to move their Bitcoin earnings from BTC to an electronic wallet held with legitimate London-based digital currency company Luno.

From there it could be paid into a bank account.

Schoeman said she withdrew some money before the scheme crashed in early February, but had reinvested it and thus did not recover her entire capital before the scheme collapsed.

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At that point, the three accounts reflected a total of R92 000 in earnings.
A number of BTC investors City Press spoke to said a Steven Twain was the mythical BTC Global investor. However, no one had ever met or spoken to him directly.

Communication was through a group of administrators, who appeared to be genuine. At least one of them warned the investment group that Twain was running a scam. This was before the accounts were frozen.

BTC chat groups had been set up on the Telegram instant messenger service. Schoeman said there were people on the group who had lost over R1 million.

She said she referred her sister-in-law and a friend to BTC Global and that the crash had put a bit of a strain on their relationship.

She hoped they would get something back once the Hawks had completed their investigation.

Another victim of the alleged scam, Linda Horsfield of Gauteng, had submitted an affidavit to the Hawks. She did not expect to recoup the $5 000 (R63 000) she put into the scheme.

“The guys know the game is up and will just squirrel it away,” she said. She believed if any money was recovered, it would go to the Asset Forfeiture Unit.

In her affidavit, she stated she first heard of Twain from a friend’s mother who had been receiving the “guaranteed” return of 2% per day.

“Shortly thereafter I overheard a lady at the annual general meeting of Wealth Migrate, a company I am a shareholder in, talking about earning 2% per day from an investment made with Twain.”

This woman introduced Horsfield to a man who had apparently been invested in BTC for a long time and had been paid 14% interest every Monday.

She met him in November last year to find out more. He told her that a woman who knew Twain personally introduced him to the scheme.

Horsfield said she bought into the scheme with cryptocurrency she already owned. She said she knew of people who bonded their houses to buy into BTC Global.

“People have lost their houses, their cars, convinced their in-laws to invest their retirement money.”

She said she had advised everyone she had referred to BTC to withdraw their interest every week, although she did not heed her own advice.

She said people on the BTC Telegram group said they could get access to their Bitcoin earnings if they paid a $1 000 (R12 400) access fee.

She said there was no way she was paying more money, but was worried that if she said anything negative on the group about this, she’d be kicked out.

Rumours and theories ran wild on the groups, she said. These ranged from Twain’s having been robbed and his computer equipment stolen, to his having to sort out tax issues.

A couple who live on the Garden Route, who did not want to be named, said they had taken money out of the bond on their house to invest R250 000. They first put their money in the scheme in December. They lost all of it.

A woman in Gauteng, who had referred Horsfield to BTC, said she invested about R12 500 on September 1. Because she withdrew her weekly dividend, she made her money back and “a little bit” extra.

She believed the money was genuinely invested in Bitcoin, as electronic wallets were created, but that after making large gains late last year, the Bitcoin price dropped in January and Twain may have been overextended.

Luke Buckland, founder of a private cryptocurrency investment partnership called Cryptocats, said Bitcoin was great for running a Ponzi scheme. This was because it had global reach, coupled with the promise of riches through technology and was advertised via social media.

“It’s a perfect storm,” said Buckland.

Questions sent to the SA Reserve Bank and Treasury were not answered before deadline on Friday.


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Author  Steve Kretzmann 
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London Police Seize £500,000 in Bitcoin from “Cyber Crime Wave” Hacker

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Described by his sentencing judge as a “one man cybercrime wave”, British hacker Grant West caused hundreds of thousands of dollars worth of damages through his activities stealing and selling personal and financial information on the dark web.

West sent phishing emails under the guise of surveys from popular takeaway food delivery service Just Eat, offering food vouchers in exchange for completing a survey. The survey was a fake, and respondents were actually sending their personal details back to Grant so that he could sell them to the dark black market – the phishing scam alone netted West £180,000 or $240,000 which he then converted into Bitcoin. BBC reports that the scam cost the Just Eat company £200,000 or $265,000.

West also directly targeted over 100 other companies including major firms like Barclay’s, Asda, Ladbrokes, Uber, and British Airways, hacking them for more customer data to sell.

His Barclay’s attacks resulted in West’s clients fraudulently removing £84,000 or $110,000 from customer accounts and costing the bank £300,000 or $400,000 to remedy through new security measures. Similarly, West cost British Airways £400,000 or $530,000 after he hacked Avios accounts.

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He reportedly used the money to pay for a new Audi worth £40,000 or $53,000 and several trips to Las Vegas among other luxuries.

West was arrested in 2017 on a first-class train to London in September 2017. Detectives from the Scotland Yard cybercrime unit chose the moment to end their two-year investigation carefully, making sure Grant was logged into his computer so and grabbing his arms before he could log out of his heavily encrypted cryptocurrency wallets and dark web accounts, which otherwise would be very difficult to link to him legally.

On the laptop, which belonged to West’s girlfriend, police found the financial information of 100,000 people. A subsequent raid on his home revealed an SD card with the details of 63,000 credit and debit cards as well as 7 million email addresses and passwords, along with £25,000 or $33,000 in cash and half a kilogram of cannabis, which West was also selling on the dark web.

West went by the username Courvoisier, after the top-shelf brandy, selling stolen information and drugs on the now-defunct site Alpha Bay. He pled guilty to conspiracy to commit fraud, computer misuse, and drug offenses on 2 May and on Friday May 25 Judge Michael Gledhill sentenced West to 10 years and eight months in prison.

Police accessed and seized over £500,000 or $667,000 worth of ill-gotten Bitcoin from West’s girlfriend’s device, and she was sentenced to community service for unauthorised access of computer material – however, according to Judge Gledhill, over £1.6 million or $2.13 million worth of West’s cryptocurrency is still unaccounted for.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Conor Maloney
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