The operators of a global cryptocurrency-based Ponzi scheme have been charged with fraud and money laundering following a United States Homeland Security Investigations probe. According to an announcement from the U.S. Department of Justice, four of the five alleged operators of AirBit Club, which allegedly netted tens of millions of dollars from victims, were arrested and due to appear in court on Aug. 18, while the fifth was arrested in Panama and is awaiting extradition to the U.S. The scheme was launched in late 2015 and sold as a multi-level marketing club in the cryptocurrency industry. The defendants purportedly hosted …

India is the hub for call center scams. Call it a lack of strict regulatory measures to stop such activities or the scammers’ resilience to start over every time their business is busted, but call center scams have only grown more prevalent in the country. With cryptocurrencies slowly gaining ground in the subcontinent, groups of scammers are also taking advantage of Indians’ increased interest in digital assets. The founder and CEO of a blockchain and cryptocurrency research company Crebaco, Sidharth Sogani, told Cointelegraph that so far, multi-level marketing schemes and “fixed return” crypto investment schemes are the most common. Sogani …

A full month after the Philippines' Securities and Exchange Commission flagged Forsage as a likely Ponzi, it remains the second-most popular Ethereum DApp on internet rankings. As of Aug. 6, Forsage has 390,000 users and a turnover of $3.11 million per 24 hours — despite being marked in dappstat.com rankings as “high risk.” Speaking to Cointelegraph in July — weeks after the SEC’s official warning — Miguel Cuneta, the co-founder of Phillipine fintech Satoshi Citadel Industries — wrote: “I received numerous inquiries from friends and family about Forsage and 'investing' in Ethereum just within the last month or so. People …

Computer scientist and Blockstream CEO, Adam Back, has compared Ethereum and other high-cap altcoins to Ponzi schemes in a Twitter tirade today: “Bitconnect, Charles Ponzi, Ethereum, Onecoin, Cardano, Ripple, Bernie Madoff, Stellar, Dan Larmer. All looking very similar grade to me.” Charles Ponzi and Bernie Madoff are two of the most famous creators of Ponzi-schemes, while Bitconnect and OneCoin are famous cryptocurrency projects that were revealed to be Ponzis. Back likened such schemes to altcoins Ethereum, Ripple and Stellar, along with “Dan Larmer,” presumably a reference to Bitshares and Steem creator Dan Larimer. Back’s swipe came in a dialogue with …

Despite Russia recently passing its first major legislation devoted to cryptocurrencies, the country’s central bank continues to treat the industry as a criminal area. Sergei Shvetsov, the first deputy governor at the Bank of Russia, has voiced the bank’s negative stance towards crypto investment. He compared cryptocurrency with financial pyramid schemes and roulette games. The official provided his remarks on the crypto industry during a July 28 live YouTube stream regarding Russia’s new bill on categories of retail investors. During the live session, Shvetsov emphasized that the Bank of Russia does not recognize crypto purchases as an investment. He said: …

Per a July 15 complaint from two former investors who have been unsuccessful in getting their money back, Idaho-based Crypto Traders Management advertised an investment strategy that constituted an unregistered security, while actually locking up user funds. Plaintiffs are asking for the return of nearly $750,000 as well punitive damages of upwards of another half-million dollars. Consistent updates from CTM kept investors coming back The complaint claims that plaintiff David Powell sent a series of investments to Crypto Traders Management starting near the end of 2018. Despite the subsequent collapse of the altcoin market on which CTM’s professed trading strategy …

One of four men charged with defrauding investors of more than $722 million through a long-running cryptocurrency mining scheme has pleaded guilty to charges against him. The man, a 35-year-old Romanian programmer called Silviu Catalin Bacali, was arrested in Germany in December 2019. He was charged with one count of conspiracy to commit wire fraud as well as a conspiracy to offer and sell unregistered securities. He faces a maximum of five years in prison and a fine of $250,000. Three others — Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks and Joseph Frank Abel — were charged in …

The Securities and Exchange Commission (SEC) of the Philippines has warned the public against individuals and groups engaged in unauthorized crypto investments and trading, according to an announcement on July 1. The Philippine SEC warned those who were involved in crypto schemes could face a fine or 21 years of imprisonment or both. It explained that: “A maximum fine of P5 million or imprisonment of 21 years or both await those who act as salesmen, brokers, dealers or agents of entities engaged in unauthorized investment schemes[...] The Bayanihan to Heal As One Act, also punishes those participating in cyber incidents …

In addition to the obvious advantages in the form of anonymity, accessibility, ease of use and low cost of transactions, cryptocurrencies have some serious drawbacks that impede their global adoption. The main one is the connection between crypto and crime. Everyone who has studied this topic even superficially knows that Bitcoin (BTC) still remains a popular payment method among scammers and criminals on the darknet. Cryptocurrencies are very convenient tools for money laundering, evading taxes and cheating investors. Today, I will talk about the most famous cryptocurrency pyramids, from which millions of investors suffered and whose activities amounted to billions …

On Wednesday, a 52-year old man named Fok Fook Seng of Singapore was found guilty of operating a multi-level marketing scam linked to the cryptocurrency Ponzi scheme OneCoin. Since its inception, the OneCoin crypto scam has defrauded investors of more than $4.4 billion. According to local news outlet Channel News Asia, Fok was convicted for promoting the MLM scheme between January 2016 and June 2017 and was fined 100,000 Singapore dollars (~$72,000). The police first pressed charges against him in April 2019 under the Multi-Level Marketing and Pyramid Selling Prohibition Act, which they said was the first of its kind. …

Another Filipino finance entity issued a warning against the alleged crypto Ponzi scheme Bitcoin Revolution, accusing them of impersonating the country’s president, as well as its finance and treasury officials. According to the Department of Finance (DOF) in an alert published on June 21, Bitcoin Revolution has been using the name of Secretary of Finance Carlos Dominguez III to promote what the watchdog claims is a fake “cryptocurrency auto-trading platform.” Fake news as bait for investors The alleged scammers are reportedly spreading fake news with an article that claims government has created a platform called “Bitcoin Lifestyle,” complete with a …

After a week of searches, it appears that the culprit behind at least two of the anomalous high fee transactions on Ether (ETH) was found. As reported by Chinese blockchain analytics company PeckShield on June 16, the originating address appears to be coming from Korean platform GoodCycle, a recently launched peer-to-peer exchange that provides “investment” opportunities to its users. According to PeckShield, this platform shows all the signs of a Ponzi scheme, which would explain its rapid rise in popularity. The analysts conducted a thorough blockchain analysis and found that a wallet beginning with “0xcdd6a2b” was the origin of the …