Crypto Scam, Pyramid Scheme ... Why Not Both?!

SEC Charges Eleven Individuals in $300 Million Crypto Pyramid Scheme

The Securities and Exchange Commission today charged 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from millions of retail investors worldwide, including in the United States….

According to the SEC’s complaint, in January 2020, Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov launched Forsage.io, a website that allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum, Tron, and Binance blockchains. However, Forsage allegedly has operated as a pyramid scheme for more than two years, in which investors earned profits by recruiting others into the scheme. Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.

James Howells Lost $181M Bitcoin in Dump: the $11M Plan to Get It Back

James Howells’ life changed when he threw out a hard drive about the size of an iPhone 6.

Howells, from the city of Newport in southern Wales, had two identical laptop hard drives squirreled away in a drawer in 2013. One was blank; he says the other contained 8,000 bitcoins — now worth about $181 million, even after the recent crypto crash.

He’d meant to throw out the blank one, but instead the drive containing the cryptocurrency ended up going to the local dump in a garbage bag.

Nine years later, he’s determined to get back his stash, which he mined in 2009.

Twitter Went Into Ludicrous Mode in Elon Musk Suit

Over the weekend, Twitter sent subpoenas to 17 Wall Street bank entities that have helped Musk put together the deal. The volume of information requested is huge, as you may expect for a deal like this: every pertinent text message, email, voice-mail, DM, and whatever other way they may have communicated. The requests cover everything from basic discussions over debt financing to any conversations with Bob Swan, the former Intel CEO who was booted from Team Musk for not being “on the same wavelength….”

The Crypto Market Crashed. They’re Still Buying Bitcoin.

Cory Klippsten started issuing warnings about the cryptocurrency market in March. The digital coin Luna, Mr. Klippsten tweeted, was a scam, run by an entrepreneur with “major Elizabeth Holmes vibes.” The newfangled crypto bank Celsius Network was a “massive blowup risk,” he said.

When those crypto projects collapsed a few weeks later, causing a crash that has wiped out about $1 trillion in value, Mr. Klippsten became a fixture on news shows, where he cast the industry as a morass of hucksters and hypocrites. “Crypto is a scam,” he declared last month.

But Mr. Klippsten differs from most crypto haters in one crucial respect: He runs a Bitcoin company.

Crypto Firm Nomad Loses Nearly $200 Million in Bridge Hack

Nomad, a bridge protocol for transferring crypto tokens across different blockchains, lost close to $200 million in a security exploit on Monday, according to security firm PeckShield Inc.

The software system was drained of funds over hours and in small batches by various accounts, blockchain data shows.

SEC’s Coinbase investigations a sign of more fights to come

Of the nine digital assets the SEC insider trading complaint said were securities, seven are traded on Coinbase. [Coinbase Chief Legal Officer] Paul Grewal said the company has “a rigorous process to analyze and review each digital asset before making it available on our exchange — a process that the SEC itself has reviewed.”

Coinbase may have overreached in suggesting it had the SEC’s approval. Grewal was making a reference to the SEC review of Coinbase’s IPO filing last year, according to a company representative. The SEC declined to comment.

It’s far from clear that the issues the SEC would consider in vetting a company’s financial reporting ahead of an initial public offering have much to do with the question of whether digital assets are securities, even if the same agency happens to have oversight in both cases.

John Reed Stark, former chief of the SEC’s Office of Internet Enforcement, said Grewal’s statement was misleading. “What they’re saying implies some sort of approval,” he told Protocol.

Attorney General James Urges New Yorkers Deceived by Crypto Platforms to Report Concerns to OAG

TNew York Attorney General Letitia James today issued an investor alert urging any New Yorker deceived or affected by the cryptocurrency crash to contact her office. Many high-profile cryptocurrency businesses have frozen customer withdrawals, announced mass layoffs, or filed for bankruptcy, while investors have been left in financial ruin. As part of the Office of the Attorney General’s (OAG) ongoing investigative work, OAG is interested in hearing from New York investors who have been locked out of their accounts, who are unable to access their investments, or who have been deceived about their cryptocurrency investments. New Yorkers who have been affected by this conduct are strongly encouraged to report these issues to OAG. Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.

Self-Proclaimed Bitcoin Creator Awarded £1 in U.K. SuitBy on August 1, 2022, 8:32 pm | EditCraig S. Wright, who has for years claimed he is Satoshi Nakamoto, as the creator of bitcoin is known, won a defamation case in the U.K. against blogger Peter McCormack.

It was a minor victory, however: The suit did not weigh in on whether Mr. Wright actually is Nakamoto. And it awarded him all of £1 worth of damages.