A United States District Attorney has charged the founders of an international cryptocurrency pyramid scheme that involved the marketing of an allegedly fraudulent digital currency called “OneCoin.” The announcement was published by the U.S. Attorney Office of the Southern District of New York on March 8. The founders and leaders of OneCoin, Konstantin Ignatov and his sister Ruja Ignatova, were reportedly arrested on March 6, 2019, in Los Angeles. The siblings were accused of “wire fraud, securities fraud, and money laundering offenses,” wherein they allegedly lured investors to contribute “billions of dollars in the fraudulent cryptocurrency.” OneCoin was established in …

The Australian anti-money laundering watchdog has suspended the registrations of two cryptocurrency exchanges in connection with a drug trafficking case, the agency announced in a press release on Friday, March 8. The Australian Transaction Reports and Analysis Centre (AUSTRAC) — a government financial intelligence agency that aims to prevent money laundering, tax evasion, welfare fraud and terrorism — suspended the two crypto exchanges’ operations because of their association with a suspect in an alleged organized crime syndicate. According to the joint press release from AUSTRAC and the Australian Federal Police, a 27-year-old man has been arrested on several drug trafficking-related …

The South Korean Supreme Prosecutors' Office (SPO) has announced the establishment of a task force to fight cryptocurrency-related fraud and crimes. The development was reported by the Korean Broadcasting System (KBS), one of the largest national public broadcasters, in an article published on Tuesday, March 5. The new task force will be responsible for the investigation — under the SPO’s authority — of fraud, illegal money laundering, crimes and other illegal activities within the fields of fintech and cryptocurrency. The decision to create a special task force is a response to the significantly increasing number of fraud cases and crimes …

The British financial regulator, the Financial Conduct Authority (FCA), has issued a warning against illegal crypto-related firm Next Coin Market, according to an official statement released on March 6. According to the FCA, Bulgaria-based Next Coin falsely claims to be authorized with the U.K. financial authority to offer cryptocurrency-related services to British residents. The FCA elaborated that Next Coin was sending users a link to a fake website that gives the impression that the firm is officially authorized by the FCA. However, Next Coin is not registered with the authority, the FCA said, claiming that the firm is involved in …

Switzerland-based cryptocurrency bank Dukascopy has warned customers that forex trading company GCG Asia is fraudulently claiming to be the bank’s authorized firm in an announcement published on Feb. 27. In the announcement, Dukascopy Bank — purportedly the first regulated bank to launch its own initial coin offering (ICO) — cautions that neither it nor any entities of Dukascopy Group have relations with GCG Asia, although the latter fraudulently claims the opposite. The warning reads: “GCG Asia is fraudulently using Dukascopy's name and logo for attracting clients/investors, without Dukascopy Bank's permission. We are taking actions against this dishonest organisation.” In January, …

A purported Bitcoin millionaire (BTC) who was previously involved in “making it rain cash” on the streets of Hong Kong, has reportedly been arrested for mining-related fraud, the South China Morning Post reports Thursday, Feb. 28. A 25-year old businessman named Wong Ching-kit and his 20-year-old colleague have purportedly been arrested by Commercial Crime Bureau officers at their office in Hong Kong. They are reportedly being held in custody for conspiracy to defraud investors by selling them cryptocurrency mining machines. Details on how or why these miner-related sales were considered fraudulent were not forthcoming. As Cointelegraph reported in early January, …

The United States Federal Bureau of Investigation (FBI) is seeking to contact investors in alleged ponzi scheme Bitconnect (BCC) that collapsed in January last year, a news statement confirmed on Feb. 20. As part of ongoing investigations into the activities of the well-known but shadowy scheme, the Cleveland branch of the U.S. law enforcement agency appealed to ex-investors to give information about their interaction with Bitconnect. A dedicated questionnaire is already available online, Special Agent Vicki D. Anderson explaining that responses would assist investigators in identifying those affected by monetary loss. “The FBI is seeking potential victims who invested in …

The United States Federal Bureau of Investigation (FBI) has outlined what it believes to be the consistent threads running through fraudulent initial coin offering (ICO) schemes. The Bureau’s perspective was shared in an interview with Netherlands-based financial news site the Paypers on Feb. 19. According to the FBI, the key strategies of scam offerings include misrepresentations of their directors’ professional experience, an engineered false impression of how much traction the ICO has garnered in the industry, and unrealistic promises of prospective returns on tokens: “Like any investment product, rates of return can never be guaranteed and if it sounds too …

Two prominent research papers have shed light on the latest crime trends affecting the cryptocurrency community over the past two years. Crypto analytics companies Chainalysis and CipherTrace released reports at the end of January that unpack some interesting data on the methods that criminals have used to steal and defraud users within the cryptocurrency and blockchain space. These reports paint an interest picture of the ever-changing cryptocurrency landscape and provides some food for thought about the use of crypto in criminal activity around the world. Exchange hacks and darknet trading still a threat As Chainalysis outlines in its January 2019 …

Law enforcement in Mumbai, India have exposed a group allegedly involved in a cryptocurrency scam that amassed an estimated 1 billion rupees (nearly $17 million), local media outlet The Times of India reports on Feb. 17. The case reportedly led to the freezing of several accounts in the country and to the arrest of four individuals — Sanjay Sontakke, Rajnikant Kumavat, Alpesh Barodia and Kirankumar Panchsara. According to The Times of India, the police are also looking for a fifth suspect, Ashok Goyal, who reportedly played a key role in the alleged scam. The complaint that led to the four …

Manhattan’s District Attorney (DA) announced the indictment of an individual for stealing identities and funds, including crypto, via a process known as SIM swapping. The announcement was made in an official press release from the Manhattan District Attorney’s Office on Feb. 1. The defendant, Dawson Bakies, has been accused of stealing the identities of over 50 victims in the United States, and also stealing funds from some of them. The 20-year-old man has been charged with identity theft, grand larceny, computer tampering and scheme to defraud among other charges in a New York State Supreme Court indictment. According the Manhattan …

About $1.7 billion in cryptocurrency had been obtained via illicit means in 2018, according to research published by crypto analytics company CipherTrace on Jan. 29. Of that $1.7 billion, over $950 million was stolen from crypto exchanges, representing a 3.6 times increase over 2017. On the other hand, at least $725 million was lost in 2018 to scams such as ponzi schemes, exit schemes and fraudulent initial coin offerings (ICOs). CipherTrace also listed what the company believes to be the top ten cryptocurrency threats: the highest is SIM swapping, which is a kind of identity theft involving taking control over …