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Singapore’s Central Bank Raises Alarm About a Bitcoin Scam

Singapore’s Central Bank has announced that a website instigating fake claims to woo Singaporean investors is operational. Notably, this financial regulator has called out its activities as investors are prompted to purchase Bitcoin.

The Monetary Authority of Singapore (MAS) has been pivotal in showcasing the website’s fabricated declarations about Bitcoin investment linked to Goh Chok Tong, the nation’s former prime minister.

According to the Monetary Authority of Singapore, the website requires a minimum deposit of $250 from investors. This amount is channeled to a supposed initiative known as Bitcoin Loophole that runs investors’ trades.

Singapore’s Central Bank has warned prospective investors to be afraid of the website. Additionally, it has stipulated that any comments linked to Goh on the site are utterly fabricated. The MAS has reminded people to be careful of fraudulent websites that entice them using fake celebrity endorsements. It asserts that this is a well-orchestrated move to make investors part with their funds.

Bitcoin Loophole is not new to controversy. Previously, it was in the limelight based on its scam procedures. In June 2019, its ads were hindered by Facebook after a celebrity endorsement rip-off was run. Specifically, it showcased the Crown Prince of Abu Dhabi called Sheikh Mohamed bin Zayed. The operators had promised prospective investors that their net returns would be $13,000 daily from an up-front investment of $272 or 1,000 dirhams.

Image via Shutterstock

Apple Co-Founder Steve Wozniak Sues Google and YouTube Over Fraudulent Bitcoin Scam Videos

Legal team for Steve Wozniak, co-founder of tech powerhouse Apple, announced a lawsuit against YouTube and their parent company Google, alleging that the media companies failed to take down fraudulent videos that impersonated Wozniak. The videos were created in the purpose of driving Bitcoin funds.

Apple Demands Justice

Wozniak mentioned that the videos were not only impersonating him, but also other key tech celebrity figures such as Elon Musk and Bill Gates in the efforts of accumulating Bitcoin (BTC) assets. The scam videos in question would illustrate images of Wozniak and misled YouTube subscribers to think that if they sent cryptocurrencies to a designated wallet address, they would receive twice the amount of BTC back. The Apple co-founder stated in his lawsuit that YouTube should have been the one responsible for removing the Bitcoin scam videos.

Wozniak filed the legal complaint under the pretense that YouTube and Google had repeatedly ignored requests to take down crypto scam videos, and that they knowingly promoted and made a profit of the fraudulent streams, by providing advertising on top of it. According to Joe Cotchett, who is part of the Apple co-founder’s legal team, presented this argument:

“When Twitter was hit with a massive hack of 130 celebrity accounts, they were quick to shut down the Bitcoin scam in a day. In a stark contrast, the Complaint alleges that YouTube knowingly allowed the Bitcoin scam to go on for months promoted it and profited from it by selling targeted advertising.”

YouTube Joins Twitter in BTC Scams

What Joe Cotchett was referring to is none other than the infamous Twiter hack attack that happened last week, and that ironically went viral. With investors hoping that the price of Bitcoin will surge on the crypto market, Bitcoin scams are becoming increasingly common.

Last week, Twitter suffered from a similar BTC scam that was so successful and invasive that it locked down the platform for a while. The hack attack was unlike anything Twitter has ever experienced and created quite a ripple, with multiple celebrity verified accounts being compromised. World-famous verified accounts that were ceased ranged from Kanye West’s to political figures Joe Biden and Barack Obama’s Twitter, and similar messages appeared on all platform.

The messages linked the hackers’ wallet address and was used to channel Bitcoin funds straight into the crypto scheme artists’ digital pockets.

Unfortunately, YouTube still appears to be dominating in terms of the platform which scam artists resort to the most. The video content platform has been receiving alot of backlash lately, not only from multimedia tech company Apple, but also from other digital ecosystems that have filed lawsuits for similar reasons.

Ripple Also Rips at YouTube

In fact, earlier this week, cryptocurrency exchange Ripple’s legal team also filed a lawsuit against the video content platform for not taking down XRP crypto scam videos impersonating Ripple Labs Founder Brad Garlinghouse. The crypto exchange founder was even more angered by the fact that YouTube could benefit from paid ads that streamed on their platform and that was generated automatically with the scam videos.

Chinese Police Arrest 27 Kingpins of Plus Token Bitcoin Scam Worth $5.7 Billion

Chinese authorities have arrested all 27 primary criminal suspects involved in the Plus Token Ponzi scheme that defrauded nearly 40 billion Chinese yuan, approximately $5.7 billion from victims.

According to the announcement by local outlet CLS on July 30, two million people with at least 3,000 hierarchies were involved, and it was the first online Bitcoin pyramid scheme to be flagged down by Chinese security organizations.

Crypto scam headache

Apart from the 27 masterminds arrested, 82 key members involved in the case were also nabbed as reported by the Ministry of Public Security.

As per the announcement, “The public security organization has opened a case to investigate the “Plus Token platform” network pyramid scheme, and successively absconded all 27 major criminal suspects and 82 key members of the case.”

Scams continue wreaking havoc in the crypto space as victims lose vast amounts of money. For instance, a Romanian programmer recently confessed to helping create Bitclub Network, a Bitcoin mining Ponzi scheme that siphoned off funds valued at $722 million. Scammers have gone a notch higher to impersonating high-profile figures like Bill Gates and Elon Musk, as witnessed in the Twitter hack that involved Bitcoin.

The Plus Token Ponzi scheme was not any different as it was a multinational pyramid network that was entrenched on Chinese soil and abroad. It caused a wide-ranging panic in June 2019, after some Korean and Chinese investors could not withdraw Bitcoin funds from their wallets. However, this issue was dismissed as a mere hacker attack.

Notable milestone

The Chinese authorities view the Plus Token masterminds’ arrest as a great stride in cracking down crypto Ponzi schemes. The first breakthrough was made in August 2019 after six suspects linked to this scam were seized. Nevertheless, the 27 kingpins arrested were still on the run.

There seems to be light at the end of the tunnel when tackling crypto scams as cryptocurrency intelligence company CipherTrace recently unveiled a predictive risk-scoring mechanism to mitigate crypto theft and hacks.

Billionaire Chris Kirubi Warns Followers of Bitcoin Scammers Impersonating the Kenyan Tycoon

Kenya’s billionaire businessman Chris Kirubi has once again tweeted a warning to inform his 1.4 million followers about cryptocurrency websites that have been using his name and photos to solicit investments in a scheme called “Bitcoin Profit.” The tycoon clarifies that he is not associated with such organizations, and the information provided is deceptive and misleading.

Industrialist and businessman Dr. Chris Kirubi is on the list of Africa’s wealthiest people by Forbes Magazine, with his total net worth valued at US$400 million (Ksh40 billion). He is known for sharing wisdom concerning business and investment tips through his credible websites and official verified social media handles. The scammers have been re-quoting well-known sayings and pieces of Kirubi’s typical advice on business and investment to appear authentic to unsuspecting Kenyans.

Renewed Warnings

The tycoon already sounded the alarm over a similar scheme in March.

The automatic trading software called “Bitcoin Profit” has been citing Kirubi as one of their investors to catch the attention of unsuspecting Kenyans.

The rogue website falsifies information, portraying Dr. Kirubi to have spoken these words on the fraudulent money scheme:

“I thought it wasn’t true when my older brother told me but after seeing with my own eyes, I am glad I tried it.”

The Ponzi scheme website goes further to fake detailed information regarding how Kirubi had ventured into this latest investment and was reaping big.

Kirubi, therefore, urges members of the public to exercise extreme caution when making any investments.

This is not the first warning alert. As early as 2015, Kenyans were warned against being duped by crypto fraudsters. During the same year, the Central Bank of Kenya issued a stern warning to the public against digital currencies. In 2018, the central bank blacklisted cryptocurrencies and warned banks against dealing with them, citing security concerns.

During early last year, a lesser-known Brazilian crypto platform called Velox 10 Global defrauded thousands of millions of Kenya shillings belonging to local Bitcoin investors. Last year, the Blockchain Association of Kenya stated that the total number of crypto transactions, particularly Bitcoin, in Kenya was approximated to be worth more than US$1.5 million.

Crypto Scammers Appeal to People’s Greed

Millions of crypto investors have been scammed out of huge amounts of money. In 2018, losses from crypto-related crimes amounted to US$1.7 billion. The fraudsters use new-technology and old-fashioned tactics to swindle their marks in schemes based on virtual currencies exchanged through online databases known as blockchain.

Many crypto scammers rely on the tried-and-true Ponzi schemes, which use the income from new clients to pay out returns to earlier investors. Others use highly sophisticated and automated processes, including automated software, which interact with social media channel systems among people interested in virtual currencies. Even in cases where cryptocurrency plans are legitimate, scammers can still manipulate their prices in the marketplace.

CFTC Demands $572 Million in Penalty and Restitution for Bitcoin Scam, Defendant Nowhere to be Found

The United States Commodity Futures Trading Commission (CFTC) has filed a complaint with the New York Southern District Court against Benjamin Reynolds for his involvement in a fraudulent Bitcoin Ponzi scheme operating under a Bitcoin trading and investment company, Control-Finance.

According to the proposed judgment submitted by the CFTC, Benjamin Reynolds will have to pay a total of $572 million as a penalty and restitution fee. Of that sum, $429 million would be allocated towards the penalty and $143 million would be for the restitution fee. Reynolds failed to answer the CFTC’s complaint, which was originally submitted to the US district court of New York in June 2019.

All That Glitters Is Not Gold

The CFTC filed an initial complaint in June 2019, seeking answers concerning the Control-Finance Ponzi scheme. However, the owner of the fraudulent cryptocurrency company, Benjamin Reynolds, failed to appear in court and never responded to the investigative questions raised by US federal agencies.

In its complaint document, the CFTC stated that Reynolds launched a fraudulent scheme known as the Control-Finance “Affiliate Program” on May 1, 2017, and consequently defrauded more than 1000 customers with the pyramid scheme, earning at least 22,858.822 Bitcoins (BTC), which translates to at least $147 million during that time. Currently, the laundered funds are worth more than $270 million.

The managers of the alleged Bitcoin trading company used the Control-Finance website to advertise the cryptocurrency pyramid scheme. Marketing of the Bitcoin scam was done through popular social media platforms such as Facebook, YouTube, Twitter, and more to attract customers and lure Bitcoin investors. The scheme worked through the affiliate program.

Ponzi Scheme Raises Huge Bitcoin Funds

Control-Finance accepted Bitcoin funds from customers and guaranteed trading returns of as much as 45% per month. However, the collected Bitcoin funds were distributed throughout the company to those in charge of asset management services, therefore generating profits from Bitcoin through a Ponzi scheme.

Despite Reynolds promising his clients returns of up to 45% per month for their Bitcoin investments, that promise was never fulfilled. Rather, the company ended up misappropriating clients’ BTC deposits and did not conduct any Bitcoin trades on customers’ behalf. According to the CFCT’S report, customers never earned any trading profits out of their Bitcoin investments at any given time.

Reynolds and his team managed to launder about $150 million in misappropriated Bitcoins through thousands of blockchain transactions. The Bitcoin investment scammers suddenly stopped their operations in September 2017 by removing the Control-Finance website from the internet, shutting down all accounts and payments to customers, and deleting advertising contents from the company’s social media channels.

Apart from the restitution and penalty, Reynolds also faces some other penalties. He will also be permanently prohibited from trading Bitcoin and will be banned from any transactions involving “commodity interests.”

Carving Up Crypto

In the recent few previous years, the emergence of cryptocurrencies into the mainstream finance industry came at a meteorite rate, attracting public attention and financial institutions. Regulators such as the CFTC and others are “playing catch up”, tasked with the role of protecting the public from cryptocurrency scams and maintaining market stability. The CFTC and other regulators such as the SEC (Securities and Exchange Commission) continue to police cryptocurrency markets, including fraudulent trading activities. Fraud in such trading markets harms customers and, if left unchecked, could hinder innovation.

Teenage Bitcoin Scammer Behind 2020 Massive Twitter Hack Gets Sentenced to 3 Years in Prison

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Graham Ivan Clark, the teenage hacker who took over popular Twitter accounts last year and used them to scam users out of Bitcoin, has pleaded guilty in a Florida court.

The 17-year-old in Tampa, Florida will therefore serve three years in prison and three years of probation after pleading guilty to financial fraud charges. Prosecutors alleged that Clark organized the hack of more than 30 high-profile Twitter accounts to trick followers into sending him Bitcoin (BTC).

Clark hacked into verified Twitter accounts belonging to prominent figures like US President Joe Biden, former President Barack Obama, Amazon founder Jeff Bezos, Tesla CEO Elon Musk, Uber, socialite Kim Kardashian, and other personalities. He was then able to tweet out messages asking for followers to send Bitcoin.

Clark wrote posting as Apple in a July tweet: “We are giving back to our community. We support Bitcoin and we believe you should too! All Bitcoin sent to our address below will be sent back to you doubled! Only going on for the next 30 minutes.”

Once Clark gained control of the accounts, he used them to request Bitcoin donations and promised that any BTC sent to the posted address would be doubled. He executed the event in waves, starting with a series of crypto exchanges, firms, and personalities.

Two other co-perpetrators – Mason Sheppard, 19-years-old, and Nima Fazeli, 22-years-old – allegedly helped Clark in the attack. Despite all the trouble and the big names involved, the culprits only managed to gain $117,000 worth of Bitcoin from the scam. Sheppard and Fazeli also face federal charges.

As a youthful offender, Clark has avoided the minimum 10-year sentence adults would have typically faced for this type of crime, but this could be applied to him if he were to breach the terms of probation.

Teens and Cybercrime

Clark’s legendary Bitcoin scam shocked the world on July 15 last year when he and his co-perpetrators hacked and sent out bogus tweets on accounts of high-profile personalities. The three suspects were arrested towards the end of July last year and charged for the high-profile hack.

Clark was identified as the mastermind behind the hack and was accused of taking control of several accounts belonging to notable people including Bill Gates, Elon Musk, former President Barack Obama, and others.

Prosecutors alleged that Clark gained access to Twitter accounts and to the internal controls of the social media behemoth through an employee. Via phone, the hackers managed to fool Twitter employees by phishing information. The scammers then attacked accounts of high-profile individuals. This mysterious incident demonstrates how nowadays, younger generations are connected to tech at a very early age. What is considered to be the biggest Twitter hack that went down in history was masterminded by three teenagers.

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