Recent research by the Wall Street Journal published Dec. 27 revealed that hundreds of cryptocurrency offerings showed signs of fraudulent activity, improbable returns and plagiarism.

In the course of its research, the WSJ downloaded “white papers” of 3,291 cryptocurrency projects that announced an initial coin offering (ICO) from three websites — ICOBench.com, Tokendata.io and ICORating.com.

A white paper is an informational document issued by a company that describes the company’s position, team biography, and technical specifics of a project, and is designed to be used as a marketing tool for potential investors.

The reporters further conducted an analysis of the documents, excluding duplicate and non-English papers:

“To identify duplicate language, the Journal compared sentences with at least 10 unique words to every other sentence in other white papers. Reporters then read and reviewed nearly 10,000 sentences appearing more than once among the 3,291 papers analyzed and removed technical and legal sounding language. Then, the Journal compared reported offering dates to determine which document first published any given sentence and excluded those projects from this database.”

The analysis reportedly indicated that 16 percent — or 513 — of the aforementioned white papers showed signs of plagiarism, identity theft and promises of implausible returns. White papers of more than 2,000 of the 3,291 projects contained sentences with luring terms such as “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk and little risk.”

State and federal regulators in the United States have previously cracked down on various offerings with similar language, issuing cease and desist orders and at times filing charges against alleged offenders.

Additionally, the WSJ tried to identify fake team members by reverse image search of photos of people associated with 343 crypto projects, which did not cite key data about team members. Some documents did not list team members at all, so the Journal searched for names appearing in a list of over one million managed by the U.S. Census Bureau.

In August, the WSJ claimed in a study that cryptocurrency price manipulation was largely conducted by organized “trading groups” using services such as Telegram. The WSJ suggested that coordinated “pump and dump” schemes had seen traders inflate and crash the prices of various cryptocurrencies this year.

This post is credited to cointelegraph

The Italian securities regulator has suspended two projects for allegedly offering fraudulent crypto investment schemes. The 90-day suspensions were reported in an official statement on the regulator’s website published Monday, Dec. 17.

The Italian Companies and Exchange Commission — or Commissione Nazionale per le Società e la Borsa (CONSOB) — is the Italian analogue of the United States Securities and Exchange Commission (SEC) and represents a governmental authority that regulates the Italian securities market.

Both firms suspended by the CONSOB — Bitsurge Token and Green Energy Certificates — are allegedly scam projects from Avalon Life, a company that is not based in the European Union. Both have been banned from offering investments for 90 days, starting from Dec. 12, according to two official resolutions.

Allegedly fraudulent scheme Bitsurge was promoted on the website bitsurge.io and on the Facebook page dubbed “Bitsurge Token.” As described in the resolution, the company was offering investors “token contracts” with monthly returns from 6 to 13 percent for capital amounts ranging from $1,000 to $25,000. The CONSOB document notes that customers reportedly did not possess any autonomy in the management of their tokens.

The second scheme, dubbed Green Earth Certificates, was reportedly promoted through the Facebook page “Progetto Crypto Green Earth” and offered “Green Earth Certificates” in order to protect rainforests from deforestation by purchasing forest areas via blockchain. The alleged scam intended to provide a 6 percent reward on the sum of crypto investments in forest areas — such as Costa Rica — which have large areas of rainforests.

Recently, the CONSOB has issued a joint warning with Malta’s Financial Services Authority (MFSA) about an unlicensed cryptocurrency exchange named OriginalCrypto.

In mid-November, the CONSOB also sent cease-and-desists to three crypto-related firms for the alleged offering of unapproved investment services.

In regard to the issue of crypto-related advertising on Facebook, the social media giant had previously banned crypto and ICO ads in January 2018, claiming that it wanted to prohibit “misleading or deceptive promotional practices” associated with crypto.

However, the social media entity updated their policy to allow cryptocurrencies ads again in late June 2018, still maintaining their ban on promoting initial coin offerings (ICOs).

This post is credited to cointelegraph

Elon Musk is not giving away any crypto, so you know. It’s not a thing that happens, no matter what you’ve heard. Which is what scams like this rely on: word of mouth. Hey, did you hear you can get free Bitcoin and Ether from Elon Musk? I saw it on his Twitter page. The victim then acquires the minimum amount required by the scammer and sends it away, never to receive the payout.

Today’s scammers went a step beyond the standard fake Twitter profile and link to an Ether address. They created a whole website, spacex.delivery (no longer available – likely the ICANN’s trademark rules were enforced. For the victimized party, it’s as simple as contacting the registrar, and the domain is frozen unless or until the domain owner can prove they have some legal reason to be able to use the trademarked namespace.)

Captured by CCN Staff before it went offline

The site had a fake Ethereum transaction log on it, as seen above. The actual transaction history of the address mentioned looked like this at time of writing:

As you can see, this diverges from what’s shown on the webpage. There are no outgoing transactions.

There’s a strong liklihood there was no actual incoming Eth, as we discussed here. Although, there are three transactions that meet the “minimum requirements.” This one, this one, and this one.

The rest of the scam was pretty standard: a short blog post on Medium complete with fake comments. One person claims to have received 30 Eth, and another 20. But there were no deposits of that size, so judging by the “verification” method required in the scam’s mechanics, it’s just funny. In crypto we have proof of most everything. The least they could have done is dug up a transaction of that size and linked to it, for the benefit of the unwitting user.

Captured by CCN Staff Before Spacex.delivery went offline

The old rule applies: if it’s too good to be true, it probably is. Elon Musk may be charitable, but that doesn’t mean he has time to go around giving non-tax-deductible donations. Neither do you. So avoid anything that says “Elon Musk” and “free [insert cryptocurrency].” If ever he does give blockchain money away for free, you’ll definitely hear about it from a reputable source like CCN. In the meantime, please be smart with your crypto. And if you bought for the express purpose of letting Elon Musk double it for you, well, you bought at a good time and now’s the time to hold it.

This post is credited to ccn

Tokyo police have arrested eight men that are suspected of collecting a total amount of $68.4 million in cash and cryptocurrency using a pyramid scheme, Japanese daily newspaper Asahi Shimbun reports Wednesday, Nov. 14.

The suspects claimed to run a U.S. investment company dubbed “Sener,” conducting seminars with foreign speakers. The police report that at least one of the meetings has been recorded, with video uploaded on YouTube. During the seminars, the group of suspects promised monthly returns from 3 to 20 percent for the investments. The suspects also asked the participants to pledge to invite other investors in order to get additional returns.

The investigators believe the suspects received cash and Bitcoin (BTC) from about 6,000 people in 44 prefectures, including Tokyo. A group lawsuit was filed at the Tokyo District Court by 73 victims of the fraud, seeking approximately $3.2 million in damages. According to Asahi Shimbun, six men have already admitted to the allegations, while two others deny them.

The Tokyo police believe the suspects tried to avoid prosecution by using cryptocurrencies, as they are in a “gray zone,” according to Japanese financial regulation. As explained by Financial Services Agency (FSA), digital currencies are not considered as securities that are under the jurisdiction of current law. However, they can be regulated depending on the structure of the investment, the FSA added.

Japan is known for its crypto-friendly stance, which remains relatively unchanged despite the massive hacks on local crypto exchanges Coincheck and Zaif in 2018.

The FSA, which issues licenses for crypto exchanges to operate in the country, gave the local crypto industry self-regulatory status in October, certifying the Japanese Virtual Currency Exchange Association (JVCEA) to monitor the space.

Furthermore, a Japanese taxation policy committee is seeking to facilitate cryptocurrency tax reporting. In October, the officials held a debate discussing the current legal framework and offering to stimulate a more thorough reporting of cryptocurrency gains.

This post is credit to cointelegraph

Several verified Twitter accounts have been hacked to impersonate Elon Musk today, Nov. 5, with one reportedly collecting almost $170,000.

After compromising verified accounts, scammers changed the profile name and picture in order to pose as the Tesla CEO. Scammers would then post in comment threads started by the real Elon Musk, so as to give the impression of legitimacy. Some of the scam tweets said that Elon Musk was conducting “the biggest” crypto-giveaway in the world for those who use “Bitcoic” (read Bitcoin), and provided a link to “participate” in the giveaway.

Screenshot of compromised Pathe UK account. Source: Business Insider

Screenshot of compromised Pathe UK account. Source: Business Insider

To skirt Twitter security measures, scammers subtly changed one of the characters in the name, while still maintaining a display name that appeared to be “Elon Musk” at a glance, preculding Twitter from automatically flagging the account.

Hackers reportedly compromised several different accounts, including those of film production firm Pathe U.K. and U.S. politician Frank Pallone Jr.

Daily Beast reporter Lachlan Markay reported that sources on Pallone’s campaign confirmed the account was hacked, albeit without any political goals saying, “Just looks like a Bitcoin Scam.”

He subsequently added that one of the BTC wallets used in the scams received $158,256 and that the payments “are still coming.” At press time, the address referred to by Markay had a final balance of 26.38 BTC ($168,930).

Pathe U.K. later confirmed that it had recovered control of its account and deleted the fake Elon Musk tweets.

Other high-profile individuals in the crypto and tech space have been similarly impersonated. In April, founder and CEO of Telegram Pavel Durov tweeted a warning, telling his followers that the messaging app was experiencing downtime due to its server clusters overheating. Durov’s tweet drew attention to fake crypto giveaway scammers who posed as the Telegram CEO and claimed to offer crypto to users as a “thank you for [their] support.”

In January, Twitter saw an influx of Litecoin (LTC) founder “Charlie Lee” impersonators, with multiple imposters posing as the LTC creator and promoting a fake LTC giveaway. Most of the scammers were using Twitter handles with names very similar to the real Charlie Lee, @SatoshiLite, such as @SatoshiLitez and @SatoshiLitee_.

In September, Elon Musk asked Jackson Palmer, the creator of Dogecoin (DOGE), to help him combat “annoying” cryptocurrency scammers on Twitter. Palmer replied almost immediately, urging Musk to reach out to him using direct messages. Later on, the creator of Dogecoin sent Musk a script that could purportedly solve the problem.

This post is credit to cointelegraph

A woman suing for 62,500 Canadian dollars ($48,125) sent to a phone scammer over a bitcoin ATM has lost her court case, local media reported. On Friday, Charlottetown Provincial Court chief judge Nancy Orr ruled that the fiat money deposited by the woman into the teller machine belonged to Instacoin ATM Canada Inc., owners of the digital cash dispensing unit.

Also read: Funny New Advert Shows Bitcoin Is on Google’s Mind

‘Unfortunate Victim of Sophisticated Fraud’

“It’s most unfortunate that she was victim of such a sophisticated fraud,” judge Orr is quoted as saying, when she handed down her decision. However, she added that “It’s up to the bitcoin purchaser to know what they’re doing.”

Scam Victim Loses $48,000 Claim Against Canadian Bitcoin ATM Firm

The woman, unnamed for security reasons, deposited 62,500 Canadian dollars into a bitcoin automated teller machine believing she owed taxes. It was a fraud. A man claiming to represent the Canada Revenue Agency called her, threatening the new immigrant with arrest and deportation for tax default.

According to a report by CBC News, the case centered on who legally owned the money she deposited into the ATM, later seized by police in cash. In court, the woman spoke of how the scammer had her on speed dial, and of the intimate detail he held about her family. She testified that as a new immigrant, she believed the threats of arrest and deportation and that this could be avoided by sending the large sum of money demanded.

Over two days in February, the woman made a series of withdrawals from her bank, which she deposited into a bitcoin machine at a restaurant in Charlottetown, said the article. She transferred the money to a bitcoin address supplied to her by the unknown man on the phone.

“It’s really hard. I need that money back,” the woman told local media, tearfully. “I want other people to know what happened to me, so it doesn’t happen to them,” she sobbed.

Bitcoin ATM Fraud Rising in Canada

Incidences of bitcoin scams are on the rise in Canada. In November last year, police said more than 40 people had lost 300,000 Canadian dollars to phone scammers, who compel victims to make bitcoin ATM deposits on the threat of arrest for tax default.

Scam Victim Loses $48,000 Claim Against Canadian Bitcoin ATM Firm

In Charlottetown, lawyer Michael Drake, representing Instacoin ATM Canada Inc., “argued that the company merely provided a financial service to the woman, by converting cash to bitcoin currency, and sending it to the computer address she provided,” the report said. The woman supplied the bitcoin address of an unknown telephone fraudster, in this case, it detailed.

Jonathan Coady, the woman’s legal counsel, argued that at the time of the ATM deposit, the woman acted “under duress.” The judge wouldn’t have it. “Both sides involved in this case are completely sympathetic to the woman…but Instacoin did not put her under duress,” said judge Orr, adding that while anonymity was a key feature of cryptocurrency, it was also its weakness where cases of fraud are concerned.

What do you think about the outcome of this case? Let us know in the comments section below.

This post is credited to news.bitcoin