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Cardano CEO Getting a OneCoin Vibe from Federal Reserve's 'Infinite Cash' Statement

In an interview given to CBS’s 60 Minutes on March 22, 2020, Neel Kashkari, the President of Federal Reserve Bank of Minneapolis made a controversial remark after being asked to comment on how the state would deal with it if a situation like the 2008 financial crisis came again due the Coronavirus outbreak.

On being asked whether the Federal Reserve Bank is equipped well enough to provide money to all the banks if they needed to satisfy all incoming panic withdrawals, Mr. Neel Kashkari was quick to respond that this is the reason why Federal Reserve Bank exists.

“Yes. This is the fundamental reason the Federal Reserve exists.”, said Mr. Neel Kashkari. He further added, “If everybody gets scared at the same time and they demand their money back, that’s why the Federal Reserve is here, is to make sure that there’s liquidity, that there’s money to meet those demands.”

Mr. Neel Kashkari further clarified his controversial statement by saying ‘that’s what Congress has told us to do’. He stated that they have been given the authority to print money and provide liquidity in the financial system by first creating it electronically and then printing it with the Treasury Department.

After the interview went live on the internet it received a wave of public criticism, one of the voice was the CEO of Cardano, Charles Hoskinson. He went on to tweet that the comments made by Neel Kashkari gave the US Dollar a real OneCoin Ponzi scam vibe.

OneCoin was a Ponzi token scam that aimed to capitalize of the success and hype of Bitcoin. It is estimated that the scam costed its investors around $4 Billion as they had no idea that the tokens that they were buying had no value.

And it wasn’t just the CEO of Cardano but also other cryptocurrency experts like Anthony Pompliano and Changpeng Zhao who took a dig at Neel Kashkari’s comment.

Anthony Pompliano, co-founder of Morgan Creek Digital tweeted, “History tells us that this is not sustainable long-term for a currency.”

“Ever heard about ‘supply, demand and price’? What happens to price when you have infinite supply?”, tweets CEO of Binance, Changpeng Zhao.

Image via Shutterstock

Bitclub Crypto Ponzi Scheme Suspects Petition Court For Release Citing Coronavirus Fears

Two men accused of operating a crypto Ponzi scheme, the BitClub Network, which defrauded thousands of investors out of $722 million, have requested a New Jersey federal court to grant them a temporary release. The two prisoners have petitioned a New Jersey federal judge as they fear they could contract the coronavirus if they are not freed from the enclosed county jail environment.

New Jersey Jail Facing Safety and Health Concerns

Jobadiah Weeks and Matthew Goettsche filed separate motions on March 20 and 23, asking the court to consider releasing them from the Essex county correctional facility in Newark, New Jersey.

In their submissions, Weeks and Goettsche claim that they are in a poor health environment. They argue that they are not able to follow medical advice in the prison as hand sanitizers are inadequate, and inmates are mostly in close contact with each other in jail.

Weeks’ lawyer mention that the county jail had an extremely poor record of maintaining inmates’ health, and its measure to prevent the novel coronavirus outbreak does little to protect the health of innates. He referred to findings publicly announced last year by the United States Department of Homeland Security’s Office of Inspector General, which highlighted concerns at the jail that showed major threats to the safety and health of its inmates.

The Inspector-General recognized roof leaks causing mildew and mold growth in all prison housing units where detainees are being held and food safety issues such as expired, spoiled, or raw meat, moldy and expired bread, foul-smelling and unrecognizable hamburgers, and raw chicken.

Weeks’ attorney argued: “Given the noted risk of illness through inadequate food service and environmental safety at the Essex County correctional facility, a swift outbreak of COVID-19 at the facility is virtually inevitable.”

The lawyers also claimed that such confinement within the facility would place greater restrictions on contact with their legal counsel that could severely interfere with the ability of Weeks and Goettsche to prepare their defense cases ahead of their fraud trials.

Weeks and Goettsche are accused of operating $722 million cryptocurrency fraud, which amounted to a high-tech Ponzi scheme. From 2014 to December 2019, the two men operated BitClub network that used promises of a huge return if investors joined the crypto investing club. The prosecution accused the men behind BitClub network of distributing misleading and false information to investors, a scheme that purported to demonstrate profit generated by the mining pool. U.S authorities charged them with committing wire fraud and conspiracy to sell unregistered securities.

PlusToken Ponzi Dumping BTC

Bitcoin’s recent price decline may have been prompted by another set of crypto scammers seeking to liquidate over 2 billion worth of cryptocurrency, which they acquired through the PlusToken Ponzi scheme.

The PlusToken scheme swindled thousands of investors out of their cryptocurrency in the promise of high returns. Liquidations of huge amounts of illicitly obtained funds are likely to cause crypto prices to fall in this nascent market. Huge amounts of Bitcoins sold by such scammers could have caused Bitcoin price drops as well as increased volatility in Bitcoin’s value. PlusToken dumps appear to coincide with whatever is affecting Bitcoin’s prices as the cryptocurrency falls soon after such occurrences.

Image via Shutterstock

Romanian Programmer Confesses to Orchestrating BitClub Crypto Scam Worth $722 Million

Silviu Catalin Balaci, a 35-year old Romanian citizen living in Germany, has confessed to helping create BitClub Network, a crypto mining Ponzi scheme that siphoned off investors’ funds worth $722 million.

As per the announcement by U.S. Attorney Craig Carpenito, the Romanian computer programmer Silviu Catalin Balaci has admitted to conspiring to carry out wire fraud by aiding the sale of unregistered securities through the BitClub Network Ponzi scheme.

Plea made via videoconference

Following the revelation made through videoconferencing, Balaci was charged with one count of dual-object conspiracy in the BitClub Network scam. This could attract a $250,000 fine and a maximum five-year sentence.

In December 2019, four other men, namely, Russ Albert Medlin, Joseph Frank Abel, Jobadiah Sinclair Weeks, and Matthew Brent Goettsche, were found answerable for their involvement in the scheme.

Medlin, who was the fraudulent network’s ringleader, and he initially managed to evade authorities until he was arrested in Indonesia on separate charges of child sex crimes mid last month. However, it was not clear whether he was extradited to face the crypto scam charges in the United States.

Coercing investors

The BitClub Network was operational from April 2014 to December 2019, and investors were sweet-talked into investing in the scheme with the promise of getting shares of purported Bitcoin mining pools. Additionally, these investors were promised rewards for recruiting new members to the scheme.

According to the announcement, “As a part of the scheme, Balaci and Goettsche discussed that the target audience for the BitClub Network would be “dumb” investors, referred to them as “sheep,” and plotted that they would be “building this whole model on the backs of idiots.”

Balaci helped Medlin and Goettsche in establishing and operating the scheme as a programmer. For instance, he could manipulate the Bitcoin mining earning figures to the tune of 60% higher to dupe investors.

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.

RyanAir CEO Declares Bitcoin a Ponzi Scheme, Urges Public Boycott

The Chief Executive Officer of Irish based airline RyanAir, Michael O’Leary has declared Bitcoin (BTC) a Ponzi scheme and has urged the boycott of the premier digital currency. These declarations were made after the CEO’s image was used by fraudsters to run a fake Bitcoin ad campaign.

According to the report, the online scam which appeared in several media outlets featured Ryan Tubridy interviewing Michael O’Leary with O’Leary allegedly saying:

“I’m glad I tried [Bitcoin] because it was some of the biggest and easiest money I have ever made. I’m talking tens of thousands of euro[s] a day on autopilot.”

According to the scam ad purveyors, O’Leary made the tens of thousands of euros through the platform Bitcoin Lifestyle, stating that his bank National Ireland Bank stopped him from sharing the secrets. As discovered, neither the Bitcoin lifestyle nor the National Ireland Bank existed further adding to O’Leary’s rage.

Leary told The Sunday Times when asked for comments:

“I have never, and would never, invest one cent in bitcoin, which I believe is equivalent to a Ponzi scheme, I would strongly advise everyone with any shred of common sense to ignore this false story and avoid bitcoin like a plague.”

O’Leary: Another Celebrity Impersonated in Bitcoin Scam

Michael O’Leary is yet another high profile individual whose identity will be used in perpetrating Bitcoin scams.

A massive security breach gripped social media giant Twitter back in July and the account of over 130 high profile individuals including Bill Gates, Elon Musk and Floyd Mayweather were compromised.

The perpetrators of the twitter hack led by 17-year-old Graham Ivan Clark accessed the direct messages of these victims to post messages cajoling other unsuspecting twitter users to send Bitcoins to a stated address.

While the Twitter Bitcoin scam led to the loss of over $100,000 worth of Bitcoin before being stopped, the model of scam is similar, by using impersonation as a tool to gain trust.

Image source: World Travel & Tourism Council Flickr images

Blockstream CEO Criticizes Sushiswap as a "Ponzi" Scheme, Ripple as a "Scam," Litecoin for "Sell the Top"

The news of DeFi, Ethereum, and decentralized exchanges have been taking over the crypto industry lately. News about institutional investors becoming Bitcoin HODLers, such as MicroStrategy, has been overtaken by the latest movements of the DeFi tokens, especially the Sushiswap (SUSHI) token, has been grabbing the spotlight in the crypto community. Blockstream’s CEO Adam Back, as a firm supporter of Bitcoin, recently criticized Sushiswap (SUSHI), Ripple (XRP), and Litecoin (LTC).

He criticized Ripple by saying:

“XRP ripple: swift network but blockchain, 100% premine, affinity scam pump, dump on retail & repeat.”

Ripple’s initial goal is as the gateway of banks to replace the SWIFT protocol for interbank message exchange which was created in the 1970s. The logic behind Ripple was to use its native coin XRP as the medium of exchange of money between banks. The total supply of XRP is 100 billion and at press time, according to CoinGecko, the market capitalization of XRP is $10.77 billion. Recently, as reported by Blockchain.News, Ripple unlocked 1 billion XRP from escrow, valuing over $280 million, increasing the liquidity in the Ripple network.

He bashed Litecoin:

“This is fun: Sushi: loan, airdrop, pump, dump Litecoin: silver to bitcoins gold, early mine/buy, coast, sell the top.”

Adam Back’s comment about Litecoin did not come as a surprise. Litecoin was described by its founder Charlie Lee as “silver to Bitcoin gold”. Litecoin’s protocol was forked from the Bitcoin codebase and had a few revised parameters. Litecoin has not had many breakthroughs nor innovations, and Lee even revealed that he sold all of his Litecoin holdings in 2017.

Related: Bitcoin vs Litecoin

In his perspective, Bitcoin is the king of all cryptocurrencies, and other altcoins are just shitcoins. Adam Back has a strong research background and invented the hashcash proof-of-work (PoW) algorithm in 2002. In his paper “Hashcash – a denial of service counter-measure,” a PoW system was introduced to prevent or relieve email spam and DDOS attack. His paper was cited by Bitcoin’s whitepaper. In the whitepaper, it says “we will need to use a proof-of-work system similar to Adam Back’s Hashcash.” His name was even connected to the real Satoshi Nakamoto. The Blockstream project was based on Bitcoin’s codebase, with a vision “to create the financial infrastructure of the future.”

Is Adam Back’s tweet about Sushiswap accurate?

Back tweeted that Sushi is a Ponzi scheme,

“Airdrop+defi is just another airdrop ponzi formula. You could as well play a stake-to-play video game, airdrop players with hook “game governance”. Has infinite varieties, yet they are all alike: in a ponzi, you are the yield. Punchline: airdrop exit scam, maybe stake too.”

There has been great criticism around Sushiswap, which recently forked from DeFi protocol Uniswap. Many questioned SushiSwap’s security while others questioned its token models. Is the description of Adam Back about SushiSwap true? But what is true is that joiners could be lured by its surprising wealth creation from those behind the SushiSwap project and human greediness. Recently, it was reported that Sushiswap’s founder transferred control of the project to FTX’s CEO. The stories about Sushiswap have not come to an end, and the trend of decentralizing exchanges and trade is just the beginning.

Leaked FinCEN Files: $137M Linked to Crypto Ponzi Scam OneCoin Laundered Through Bank of New York Mellon

A leaked trove of US official documents revealed that five major banks – Deutsche Bank, HSBC, JP Morgan, Bank of New York Mellon, and Standard Chartered Bank – were involved in illicit transactions pertaining to mobsters, crypto Ponzi schemes, and money laundering.

The official Financial Crimes Enforcement Network (FinCEN) document was leaked and disclosed that more than two trillion USD had been laundered and flagged as suspicious by financial institutions following the Anti-Money Laundering (AML) act. However, the dirty money was still reported to have been freely flowing through renowned US banking institutions.

BNY Mellon wired millions linked to OneCoin

Among them, one of America’s oldest banks, the Bank of New York Mellon (BNY Mellon) was reported to have wired funds linked to the infamous crypto laundering Ponzi scheme OneCoin.

The banking institution flagged a series of transactions from their branch to FinCEN, as the transactions were deemed suspicious and layered. Layering refers to a money laundering ruse through which the source of funds is concealed through multiple transactions. It is often used by mobsters and criminals to remain undetected by the Financial Crimes Enforcement Network and other financial regulators.

$137 million in transactions wired through BNY Mellon

The funds pinpointed by BNY Mellon were linked to OneCoin, a crypto scam that made the headlines and was classified as a Ponzi scheme generating multimillion funds by US law enforcement agents. The crypto Ponzi scheme was masterminded by Ruja Ignatova, who disappeared to flee arrest.

OneCoin was operational in many countries, such as New Zealand and the US, to name a few, and generated at least $4 billion through cryptocurrency “pyramid schemes,” making it one of the most successful and biggest Ponzi scheme in cryptocurrency history.

According to the leaked report, a combined $137 million was wired thanks to numerous transactions operating through the Bank of New York Mellon. The source of the transactions was reported by the bank to originate from OneCoin perpetrators and agents.

Other banks that were named in the leaked FinCen files include Deutsche Bank, JP Morgan, Standard Chartered Bank, and HSBC.

Deutsche Bank

The Deutsche Bank is alleged to have played a role in moving money worth more than $560 million for a Latin American construction company. It is alleged by US prosecutors to have been subject to foreign bribery. FinCEN has recorded a combined total of $1.3 trillion of suspicious transactions flowing through Deutsche Bank, making it the lead bank of the pack for having the largest suspicious transaction volume.

JP Morgan

JP Morgan was said to have processed at least $514 billion of suspicious transactions. It was said to have been involved in a money-laundering operation involving former Trump campaign manager Paul Manafort, and Bernie Madoff. It is also alleged to have conducted business with a financial Malaysian fugitive and a Venezuelan criminal.

Standard Chartered Bank and HSBC

Standard Chartered Bank was said to have processed illicit transactions amounting to a combined $24 million for foreign mobsters.

Finally, HSBC is alleged to have been in cahoots with Russian mobsters, moving funds amounting to at least $4.5 billion in suspicious transactions. The bank is alleged to have continued its money laundering transactions and to have wired funds linked to a Ponzi Scheme. An HSBC Hong Kong executive has been accused of processing more than $900 million in transactions linked to criminal networks.

Statements from Deutsche Bank and other financial banks have said that the incidents that have come to light in the documents have already been investigated and resolved with Deutsche Bank’s complete cooperation.

Cryptos Confiscated from $4.2 Billion PlusToken Scam Likely Sold by Chinese Police, says Journalist Colin Wu

Chinese cryptocurrency and blockchain journalist, Colin Wu, has revealed that the huge amounts of Bitcoin and Ethereum seized by the Chinese government from the ongoing PlusToken Scam have been converted to fiat currency and reserved in the Central Treasury managed by the China’s central bank.

The reporter has disclosed that an official announcement appears to indicate that the government has sold the cryptocurrencies and kept the funds in the Central Treasury owned by the People of Bank of China.

Colin Wu shared screenshots of official documents of the huge amounts of Ether and Bitcoin confiscated from the PlusToken crypto scam, which is regarded as one of the largest Ponzi schemes in the cryptocurrency industry.

He said that China’s police confiscated about 190,000 Bitcoins and 830,000 Ethereum that worth $3,213,109,000 and $423,474,300 respectively.

Furthermore, crypto and Bitcoin market analyst, David Puell, tweeted that a similar kind of such sell-off was executed in 2019. This was the incident when Chinese authorities arrested Chen Bo, the mastermind of PlusToken Ponzi scheme in June 2019. Chinese police confiscated cryptocurrencies, sold them, and kept the funds in the country’s national treasury. Puell also mentioned particular cryptocurrency exchanges (OKEX and Huobi) that the government authorities used to dump the cryptocurrencies into the open market while cashing out fiat currencies.

Puell believes that the government has sold the cryptocurrencies confiscated currently via OKEX and Huobi exchanges and kept the funds in the national treasury.

Puell’s tweets also revealed to the crypto community that the current sell-off of the seized Ethereum and Bitcoin have had an impact on the cryptocurrency markets by pushing their exchange rates down.

Meanwhile, Thomas Silkjaer, the CEO and founder of blockchain analytics, forensics and AML compliance company, xrplorer.com, has also revealed that huge amounts of XRP were among the cryptocurrencies confiscated by the Chinese authorities. He disclosed that the government has sold all the XRP coins via the HBTC exchange, and now only a few tokens are left in the shuffle pool.

On November 19, a court ruling indicated that China’s police confiscated more than $4.2 billion worth of crypto assets during a massive PlusToken Ponzi scheme crackdown. The total amount of crypto assets seized include the following: 213,724 Tether, 6 billion Dogecoin, 74,167 Dash, 27.6 million EOS, 1.4 million Litecoin, 79,581 Bitcoin Cash, 487 million XRP, 833,083 Ether, and 194,775 Bitcoins. Chinese law enforcement confiscated the cryptocurrencies from seven culprits during the crackdown. The court ruling directed all the seized crypto assets to be processed and funds kept in the national treasury. The court document stated that the PlusToken scam might have taken more of such enormous funds from victims.

PlusToken Scheme Targeting Million of Investors

Authorities in China have arrested many bad actors who have been responsible for conducting PlusToken Ponzi scams. Such arrests have been made as a result of extensive investigations by local agencies including China’s Ministry of Public Security, which is the main police force agency in the country. So far, Chinese investigators have taken over 100 culprits behind the multi-billion-dollar cryptocurrency scam into custody.

Since 2019, the PlusToken scam had expanded to over 3,000 pyramid scheme type layers. The fraudulent scheme targets over 2 million investors in the country by attracting them with lucrative crypto investments. Scammers ask for payment in Bitcoin in exchange for an opportunity to invest in lucrative tokens. However, it always turns out to be a huge scam.