Connect with us

Cryptocurrency

UK Financial Watchdog Blacklists Clones of Two Major Financial Firms

Published

on


The British Financial Conduct Authority (FCA) has warned investors of a fraudulent company posing as the Swiss Investment Corporation, an FCA-authorized firm offering crypto investments, and another company that is a clone of Goldman Sachs, the regulator announced on June 14.

The financial regulator has blacklisted a firm operating under the domain swissinvest.biz. According to the announcement, the fraudulent clone firm offers services on its website swiss-investissement.com and is involved in scam activity.

On the website, the alleged clone firm divides its proposed investments into the safest —  assets such as precious metals, and the most successful — major cryptocurrencies including bitcoin (BTC), ether (ETH) and ripple (XRP).

The FCA released another warning against Goldman Sachs Asset Management International, a clone of major global investment bank Goldman Sachs. The popular investment bank has recently denied its plans to launch a crypto trading desk, claiming that multiple media reports suggesting otherwise were incorrect.

In both cases, the FCA has expressed the particular danger of cold calls from companies pretending to be legitimate financial institutions.

Earlier in May 2019, the FCA warned investors against another clone firm posing as ICAP Europe Ltd.

Also in May, the British regulator reported that local crypto investors lost more than $34 million due to cryptocurrency and foreign exchange (forex)-related scams over 2018 and 2019.





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Cryptocurrency

CFTC Lawsuit Alleges $147 Million in Bitcoin Defrauded from Trading Scheme Investors

Published

on

By

The Commodity Futures Trading Commission (CFTC) announced the filing of a civil enforcement action against Control-Finance Limited, a purported Bitcoin trading and investment company, and its founder, Benjamin Reynolds, of the United Kingdom.

The complaint charges the defendants misappropriated at least 22,858.822 bitcoin—worth at least $147 million at the time—from more than 1,000 customers through a pyramid scheme called the Control-Finance “Affiliate Program.”

According to the documents, from May 1 through October 31, 2017, Reynolds exploited public enthusiasm for Bitcoin by fraudulently soliciting customers to purchase and transfer bitcoin to Control-Finance. He alleged his expert virtual currency traders earned up to 45% trading returns per month, and used risk diversification methods to create a “safe haven” from crypto market risks and protect customers’ Bitcoin deposits.

“In reality, the defendants made no trades on customers’ behalf, earned no trading profits for them, and misappropriated their Bitcoin deposits,” write the CFTC in a statement.

Reynolds also enticed his clients to invite family and friends to the platform through promises of “affiliate” bonuses.

The misappropriation scheme relied on creating unique single-use wallet addresses to receive customers’ Bitcoin deposits, which would then be routed to other, pooled wallet addresses held by virtual currency payment processors and exchanges in North America, Europe, and Asia. CFTC authorities allege these uneconomical and confusing blockchain transactions were executed solely to conceal misappropriation.

Additionally, when customers requested account withdrawals, Reynolds would illegally divert funds from other customer’s to make the payments.

Reynold’s concealed the fraud by providing customers with sham account balances and profit figures that falsely reflected trading profits that did not exist. Weekly “Trade Reports,” which identified illusory profitable trades were also fabricated.

In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and permanent injunctions against further violations of the federal commodity laws, as charged.

The complaint was lodged in the U.S. District Court for the Southern District of New York.

Pyramid photo via ShutterStock

Continue Reading

Cryptocurrency

Researchers Discover How To Automate Accountability On The Blockchain

Published

on

By

“The (virtual) gold rush is on, and as in the Wild West of yore, the outlaws are ever present,” wrote blockchain developers and academics in a recent paper, Polygraph: Accountable Byzantine Agreement. Luckily, these researchers have have discovered a way to detect and punish dishonest blockchain users.

The authors — Vincent Gramoli and Pierre Civit of the University of Sydney, and Seth Gilbert of the National University of Singapore — developed the Polygraph protocol, which automates accountability in blockchains to hold participants accountable for double spending, a notoriously knotty issue in cryptography.

Though the double spend problem was supposedly solved by Satoshi’s white paper, published in 2008, the researchers discovered that disagreements caused by blockchain forks can lead to double spending if the resulting branches have conflicting transactions.

They cite a zombie case:

“Byzantine nodes can override the General Polygraph Protocol by proposing directly two conflicting views to two different clients to then perform a double-spending attack. The coalition does not participate to the consensus in order to violate the liveness property…. Note that safety is also violated: When a client invokes the read() primitive, the coalition can answer arbitrary values, despite the non-termination of the legitimate consensus. The client is supposed to trust the coalition, like all the other clients who can forever receive a different output for the read() primitive. Hence, for t ≥ n − t0, the eventual prefix property is violated. This makes the blockchain vulnerable to a double-spending attack.”

Yes, the paper is scholarly, but it also provides pragmatic solutions to real problems in current consensus mechanisms.

The group considers the growing threat of centralization on blockchains, caused by the collectivizing of hashing power. Under traditional Byzantine protocol agreements, if one party amasses more than one-third of total mining output they gain decision making authority. As an aside, the authors note that the largest Bitcoin mining pool today controls approximately 19 percent of total hashing power.

“We need a new sheriff in town to bring the guilty parties to justice. What if, instead of preventing bad behavior by a party that controls too much of the network power, we guarantee accountability,” write the authors.

Much in the way we prevent crime in the real world, we can prevent bad blockchain behavior via “defense-in-depth” — the basic Byzantine agreement protocol that prevents usurpation if the attacker has less than one-third of network control or if the network infrastructure is working to pass messages in time.

“Byzantine agreement protocols act as the locks on the bank doors, preventing the gangs from making off with the loot,” they wrote.

However, when these guarantees fail — and the authors suggest they can and do — the Polygraph protocol will intercept malicious behavior.

The Polygraph’s basic algorithm is based on the Byzantine agreement protocol, but goes further in that proceeds through asynchronous rounds, or a vote that receives democratic imput.

“First, a reliable broadcaster is used to distribute the proposal values. Then, a second phase of communication is used to determine whether enough processes have converged on a single value. Finally the processes decide, if they can; and if not, they update their estimate in an attempt to converge on a single value.”

This Town Isn’t Big Enough

If the process determines that someone is pursuing illegal actions, the consensus can vote them off the network.

“Accountability has been overlooked in blockchains but it is actually key to security,” said Gramoli, who also serves as Red Belly Blockchain CEO. “The industry cannot accept blockchain to be a simple distributed system where valuable assets vanish as soon as a third of the participants form a coalition.”

Red Belly Blockchain has been funded by the Australian Research Council and developed by researchers of the Concurrent Systems Research Group at the University of Sydney and Data61-CSIRO.

Photo by Xiang Gao on Unsplash

Continue Reading

Cryptocurrency

A New Bitcoin Exchange Point On the Colombian-Venezuelan Border Will Help Refugees

Published

on

By

A new cryptocurrency exchange service is available on the border between Colombia and Venezuela and its aim is to help refugees traveling across the Simon Bolivar International Bridge.

Visitors are now able to use the point-of-sale service with cryptocurrencies to buy goods. The POS is located in Santander, Colombia, just across the border from Venezuela. Panda Group created the payment alternative with refugees in mind. The group, a Columbian-Venezuela joint venture, announced the implementation of the new service through their Twitter account.

According to the data published by Coinatmradar.com, the service lets users exchange using bitcoin (BTC), bitcoin cash (BCH) and dai (DAI), and converts them into to Colombian Pesos (COP).

At the physical location – a small phone service provider in a mall called La Parada – customers can buy bitcoin with prices based on the Localbitcoins rate in pesos. The service will charge 10 percent above the market price and those who sell their bitcoins will do so for 5 percent more than the established market value.

This is not the first cryptocurrency service in the country. The Panda Group has already installed another five cryptocurrency exchanges in Colombia, most of them in the Colombian capital, Bogotá.

According to Panda CEO, Arley Lozano Jaramillo, their solutions are focused on helping the Venezuelan users and they announced the addition of a new service called Xpay.Cash to encourage adoption.

“This service is for all our brothers to pay directly in Cucuta with their cryptoassets and mitigate the loss of exchanging from BTC to COP, which represents a loss of at least 20%,” Jaramillo said.

Colombia has the highest rate of cryptocurrency investors in South America, next to Brazil. There are reportedly over 20 businesses accepting bitcoin payments in the country. The establishments are mainly focused in tourism, food and digital services.

Bitcoin At The Border

The ATM installed in Villa del Rosario City is connected to the Venezuelan border by the state of Tachira. The states are only separated by the Simon Bolivar International Bridge, one of the most heavily traveled borders used by Venezuelan refugees.

The refugee situation has also sparked a focus on the cryptocurrency, mainly for humanitarian aid purposes.

On the other hand, the last point of sale with cryptocurrency was implemented in Cúcuta, another border location with an growing Venezuelan population. The state also has a Bitcoin ATM, one of forty-two in the country.

Continue Reading

Trending

Copyright © 2018 Crypto Forever