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| September 20, 2018

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‘Unusually Sophisticated’ Credit Card Fraud Linked to Gangs

September 11, 2018 |

More than 30 purported street gang members have been charged with stealing more than $ 1 million in what authorities said Monday was an unusually sophisticated credit card fraud scheme. Members and associates of the BullyBoys and the CoCo Boys street gangs based in the suburbs east of San Francisco defrauded…
Newser

$1.1 Million Landmark Crypto Fraud Case Establishes CFTC Jurisdiction

August 25, 2018 |

$  1.1 Million Landmark Crypto Fraud Case Establishes CFTC Jurisdiction

The US Commodities Futures Trading Commission (CFTC) helped bring a fraud case to court, hoping to both assist in its ultimate prosecution and establish precedent. The New York Eastern District Court decided in the CFTC’s favor, ending in a combined over $ 1.1 million decision in fines and restitution. It also established the regulator as having jurisdiction over cryptocurrencies. 

Also read: China Continues Crackdown: No Hotels, Malls, Offices Used as Crypto Venues

CFTC Wins Precedent Setting Case to Regulate Crypto

It’s rare a legal case accomplishes two firsts. In the proceedings taken against Patrick K. McDonnell, Cabbage Tech, and Coin Drop Markets, the New York Eastern District Court decided to not only rule against the defendant, but also wound up establishing standing for US regulator Commodities Futures Trading Commission (CFTC).

$  1.1 Million Landmark Crypto Fraud Case Establishes CFTC Jurisdiction

Until the decision handed down on August 23rd, 2018 in a 139-page Memorandum, it was assumed the Securities and Exchange Commission (SEC) would be the lone regulator when it came to cryptocurrencies in the US. As a result, part of the case involved the CFTC arguing for its jurisdiction when it came to crypto scams in general.

In what amounts to a permanent injunction, the defendant was ordered to pay more than a quarter million dollars in victim restitution along with a fine of more than $ 800,000, bringing the grand total to more than $ 1.1 million.

Politically Motivated?

It was alleged during the first six months of 2017, the defendants fraudulently lured victims into believing they were purchasing and trading under the expert advice of Mr. McDonnell and Cabbage Tech. Evidently, Mr. McDonnell was listed as Chief Technology Officer, insisting he and Cabbage Tech had offices in places such as Wall Street, among other falsehoods about the company’s infrastructure, prosecutors claim.

$  1.1 Million Landmark Crypto Fraud Case Establishes CFTC Jurisdiction
Investigations revealed the company was a one man enterprise operated from Mr. McDonnell’s home. By summer of last year, the company’s website posted about being hacked, and declared it would suspend all activity. Not long after, the website and its chatroom, along with social media accounts, had been shuttered. Customers were left to wonder. By the beginning of this year, the CFTC charged defendants with “a deceptive and fraudulent virtual currency scheme for purported virtual currency trading advice; for virtual currency purchases and trading misappropriated [investor] funds.”

Though the CFTC prevailed, Mr. McDonnell maintained he was the subject of a political prosecution. As he explained to news.Bitcoin.com just a few months ago, he believed the “CFTC was grandstanding in Washington just weeks later of the complaint asking for a budget increase and pointing at their most recent ‘cryptocurrency’ enforcement. Much of this will come to light throughout the trial and you will see the CFTC was reckless in an attempt to force regulation. They needed something to point at,” Mr. McDonnell complained.

Is having the SEC and now the CFTC going after crypto scams a good thing? Share your thoughts in the comments section below.


Images via Pixabay.


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The post $ 1.1 Million Landmark Crypto Fraud Case Establishes CFTC Jurisdiction appeared first on Bitcoin News.

Bitcoin News

Paul Manafort Convicted of Eight Counts of Fraud

August 22, 2018 |

The former Trump campaign chairman was convicted of eight charges related to tax and bank fraud, in the first trial to stem from Special Counsel Robert Mueller’s investigation.
WSJ.com: What’s News Asia

Martin Shkreli’s company lawyer sentenced to 18 months for aiding fraud

August 18, 2018 |

Martin Shkreli’s cohort in crime may be an Eagle Scout who has devoted his life to serving others, but that didn’t save Evan Greebel from a prison sentence for aiding the “Pharma Bro” in an $ 11-million fraud.

Greebel was ordered Friday to serve 18 months behind bars for conspiring with Shkreli,…


L.A. Times – Business

Defunct for-profit college firm ITT’s former executives settle fraud charges

July 11, 2018 |

Former top executives at ITT Educational Services, the parent company of defunct ITT Technical Institute, have settled fraud charges with the Securities and Exchange Commission, avoiding a trial that was slated to begin Monday.

A judgment order entered Friday puts to rest civil fraud charges filed…


L.A. Times – Business

Ripple, CEO Face Another Securities Fraud Lawsuit

July 5, 2018 |

Ripple, CEO Face Another Securities Fraud Lawsuit

A third lawsuit, alleging securities fraud, was filed last week against Ripple Labs Inc, XRPII LLC, and its CEO Bradley Glaringhouse. In 28 pages, the class action suit attempts to make the case XRP is a security: issued, maintained, and supported by Ripple in clear violation of US regulatory laws. Ripple has worked extremely hard to distance itself from its cryptocurrency, XRP, in hopes of avoiding just this scenario.   

Also read: Troll Slayer: Derek Magill Defends Peer-to-Peer Electronic Cash Against Defamation

Ripple Labs Faces Third Securities Fraud Lawsuit

Managing partner of Robbins Arroyo LLP, Brian J. Robbins, filed a class action lawsuit against Ripple Labs Inc, XRPII LLC, and CEO Bradley Glaringhouse on behalf of San Diego college senior David Oconer. Signed by fax late June of this year in the San Mateo, California Superior Court, its more than two dozen pages set about making the case Ripple is in clear violation of the Howey Test.

Mr. Oconer, through his legal team, stresses how Ripple fought to manipulate the XRP price, including placing tens of millions XRP tokens into a kind of escrow, creating an arbitrary scarcity. It was also a way to signal to worried longer term investors the company would not dump the lot all at once. Indeed, XRP mooned to many hundreds of percent, the suit alleges, as a result of such moves.

Ripple, CEO Face Another Securities Fraud Lawsuit

It’s the third such lawsuit filed against the company since early May of this year. A common theme between each suit is the claim XRP is a security as defined under US regulatory statute – which insist Ripple Labs is the token’s puppet master indistinguishable from XRP itself. The Oconer version leans heavy on making a case for a Howey Test violation. Ripple isn’t taking any of the suits lightly, hiring two former US Securities and Exchange Commission heavies, Andrew Ceresney and Mary Jo White, as lead counsel.

Ripple, CEO Face Another Securities Fraud Lawsuit

XRP has long been held in a controversial light due in part to its origin story. While leading cryptos were to be mined on chain, ripples appeared ex nihilo with more than 60 percent still held by its parent company. If deemed a security, the company would be most likely ordered to cease all trading, and it’s not unusual to presume holders would be given the chance at refunds. Violations of securities law, what’s more, can also be prosecuted criminally, though those in the know believe it will not get to that stage.

Will these lawsuits hurt Ripple? Let us know in the comments section below. 


Images via the Pixabay, Twitter.


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The post Ripple, CEO Face Another Securities Fraud Lawsuit appeared first on Bitcoin News.

Bitcoin News

Wife of Israel prime minister charged with fraud over misuse of public funds

June 21, 2018 |

Sara Netanyahu, the wife of Israeli Prime Minister Benjamin Netanyahu, has been charged with fraud over misuse of public funds on Thursday.
FOX News

Theranos Founder Indicted on Federal Wire Fraud Charges

June 16, 2018 |

Federal prosecutors have charged Theranos Inc. founder Elizabeth Holmes and former president and COO Ramesh Balwani with two counts of conspiracy to commit wire fraud and nine counts of wire fraud, reports the Wall Street Journal . They allege Holmes and Balwani defrauded investors, doctors, and patients out of millions of…
Newser

TMZ

Ex-NFLer T.J. Houshmandzadeh Sues Weed Dispensary Owners for Fraud

May 24, 2018 |

Former Cincinnati Bengals star T.J. Houshmandzadeh claims he got bamboozled into fronting hundreds of thousands of dollars for a bogus weed business. The retired WR filed suit against two men — Damien Marzett and John Wiegman — for…

TMZ.com

South Korea’s Largest Crypto Exchange Upbit Under Investigation for Fraud

May 11, 2018 |

South Korea's Largest Crypto Exchange Upbit Under Investigation for Fraud

The largest cryptocurrency exchange in South Korea, Upbit, is suspected of fraud and is currently under investigation. The prosecutors have conducted searches at the exchange and confiscated computers and accounting records.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Upbit Under Investigation

South Korea’s largest cryptocurrency exchange, the Kakao-backed Upbit is suspected of fraud, according to local media. While maintaining that customers’ assets are still kept securely, the exchange posted the following statement on its website:

Upbit is currently under investigation by the prosecution, and we are working diligently. Upbit services such as all transactions and withdrawals are operating normally.

South Korea's Largest Crypto Exchange Upbit Under Investigation for FraudUpbit is currently the world’s fourth-largest cryptocurrency exchange and the largest in South Korea with a 24-hour trading volume of $ 1.812 billion at the time of this writing, according to Coinmarketcap. The exchange is affiliated with Kakao Corp which operates the country’s most popular chat app, Kakao Talk.

Suspected of Fraud

Crypto of Korea explained:

The company [Upbit] is suspected of transferring customer funds from their cryptocurrency exchange account to a representative or executive account…Korean prosecutors have conducted search and seizure against the nation’s largest cryptocurrency exchange, Upbit, on charges of fraud.

South Korea's Largest Crypto Exchange Upbit Under Investigation for FraudAccording to the publication, the financial investigation team of the Seoul Southern District public prosecutors’ office sent prosecutors and investigators to Upbit headquarters on May 10 and May 11 “to secure computer hard disks and accounting records.” More than 10 investigators were sent to Upbit, Money Today added.

“After the digital forensics investigation on the seizures [seized items] and confirming the illegal charges, we will decide whether and in what direction we will investigate further,” the prosecutors were quoted saying.

Accused of Deceiving Customers

Upbit allegedly “pretends to hold [virtual currencies] without holding virtual currencies,” the news outlet noted.

South Korea's Largest Crypto Exchange Upbit Under Investigation for Fraud“The prosecution believes that Upbit has entered [into] the computer system as if it had virtual currencies that it does not actually own, and deceived customers,” KBS elaborated. According to the prosecution, the Hankyoreh described, “Upbit has been suspected of carrying out ‘book-trading’ without holding virtual currencies in a wallet.”

The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have been investigating domestic crypto exchanges since March, according to Yonhap News. Their first target was Coinnest where the chairman, Kim Ik-hwan, was detained over embezzlement and fraud charges. According to Money Today, unlike Coinnest, there is no suspicion of embezzlement with Upbit.

Do you think Upbit is guilty? Let us know in the comments section below.


Images courtesy of Shutterstock and Upbit.


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The post South Korea’s Largest Crypto Exchange Upbit Under Investigation for Fraud appeared first on Bitcoin News.

Bitcoin News