Alleged Multibillion-Dollar Crypto Pyramid Scheme OneCoin Sued by Former Investor

Alleged Multibillion-Dollar Crypto Pyramid Scheme OneCoin Sued by Former Investor

The notorious cryptocurrency investment scheme OneCoin, widely claimed to be a fraud, is being sued by a former investor over her losses. The lawsuit, filed in New York Tuesday by law firm Silver Miller on behalf of the investor, Christine Grablis, alleges that OneCoin fraudulently promoted cryptocurrency investments and violated federal securities laws. Grablis complains that she lost around $130,000 in the scheme and is seeking to have those funds returned, as well as damages. She is also seeking a class action on behalf of other investors who lost money through the scheme. Complaints about OneCoin have been ongoing since at least as far back as 2016, when Belgium’s financial regulator issued a warning about the scheme. OneCoin functioned as a multi-level marketing scheme and was founded by an individual called Ruja Ignatova. Given the huge amount said to have been lost to the scheme, various government authorities from across the world, including the U.K., Germany, India, Italy, Africa and China have also warned against or have moved to halt OneCoin’s operations. Prosecutors in China last year charged more than 100 individuals regarding the scheme, while Indian authorities arrested alleged promoters in 2017. Most recently, the U.S. Attorney for the Southern District of New York (SDNY) indicted the leaders of the scheme, Ruja Ignatova and Konstantin Ignatov, on charges of wire fraud, securities fraud and money laundering. Konstantin was arrested at the time, while Ruja remains at large, also facing charges in India for her role in the project. SDNY U.S. Attorney Geoffrey Berman said at the time that “these defendants created a multibillion-dollar ‘cryptocurrency’ company based completely on lies and deceit,” adding: “They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich.” Gavel image via Shutterstock 

India’s Complex Relationship with Crypto

India’s Complex Relationship with Crypto

A blow was struck to the crypto community in India in late April as reports circulated regarding a proposed ban on cryptocurrencies. India has a strong and passionate community of crypto enthusiasts, however, their steadfast belief in the value of cryptocurrency does not appeared to be mirrored in the diverse organs of the Indian state. Cointelegraph takes a deep dive into the latest developments in  the Indian crypto sector and speaks to the experts determined to stick out this turbulent period for investors. Ban rumor shakes Indian crypto community In a development set to further consolidate the Indian government’s reputation for a faltering approach toward cryptocurrency, rumors circulated in late April that various government divisions are considering tabling an absolute ban on crypto in all its forms, according to The Economic Times. The local publication reportedly contacted an official familiar with this latest attempt to ban cryptocurrency in the country. According to the official, the draft bill named “Banning Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019” is currently being discussed by several ministers from a number of government divisions. Although the draft bill has yet to be written into law, it appears that it is already garnering support from various groups attached to the government. A committee formed of — but not limited to — the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), the Central Board of Indirect Taxes and Customs (CBIC), along with the Investor Education and Protection Fund Authority (IEPFA) has allegedly aligned with the decision to outright ban the sale, purchase and the issuance of cryptocurrencies in all their forms. In addition to the 2019 draft bill, the committee is reportedly exploring options to ban digital currencies under the auspices of the Prevention of Money Laundering Act (PMLA)). Despite the reporting conducted by The Economic Times, not all members of the crypto community are convinced that the ban is likely to take place at all. Mohammed Danish, a lawyer representing crypto-fraud victims in Indian courts and legal advisor to the crypto news content site Crypto Kanoon, notes that there has not yet been any official government statement regarding the alleged bill: “The discussion about banning crypto in India’ finds its source in few news articles and…

Bitfinex Releases Official White Paper for $1 Billion Exchange Token Offering

Bitfinex Releases Official White Paper for $1 Billion Exchange Token Offering

Cryptocurrency exchange Bitfinex has released the official white paper for its $1 billion exchange token sale, revealing it will also launch a dedicated platform for projects to raise funds via similar initial exchange offerings (IEOs) starting from next month. Bitfinex published the white paper Wednesday, confirming recent reports that it’s aiming to raise up to $1 billion worth in the tether (USDT) stablecoin by selling its own exchange token, dubbed LEO, in a private sale. However, the white paper indicated the private sale will end on May 11, not the previously reported May 10. Further, it appears Bitfinex may not necessarily conduct a public sale if it fails to raise $1 billion during the private phase. “If fewer than 1 billion USDT tokens are sold by private token sale, the Issuer may thereafter sell remaining tokens at times and in a manner it deems appropriate in its sole discretion, consistent with applicable law,” the white paper reads. Bitfinex said it will launch its first IEO allowing other projects to raise funds in June. “Qualified” persons with a Bitfinex or Ethfinex account may contribute to pre-vetted token sales directly from their personal exchange wallet. The paper states: “Projects that successfully raise capital on this platform are subsequently listed on the two exchanges, as permitted by applicable law, and token sale participants receive their subscribed tokens in their exchange wallets. The first token sale is scheduled for June 2019.” Further, Bitfinex claimed it will also be launching a licensed and regulated security token exchange, which will not be available to U.S. customers. Bitfinex’s own LEO token will be issued by Unus Sed Leo Limited, a new company owned by Bitfinex’s parent company iFinex, as previously stated in a marketing document. Bitfinex and Tether Ltd., the stablecoin issuer affiliated with the exchange, are currently being sued by the state of New York for allegedly covering up a $850 million loss in customer funds. Bitfinex later claimed that the funds had been “seized” by various authorities and that it was working to retrieve the funds. Elsewhere in the white paper, the exchange also lists forthcoming projects, including a derivatives product. “The product will have USDT-based collateral (unavailable in the rest of the market), up to 100x leverage and isolated margin…

Keys4coins Lets You Buy Digital Video Game Licenses With Bitcoin Cash

Keys4coins Lets You Buy Digital Video Game Licenses With Bitcoin Cash

Video gaming is the biggest entertainment industry in the world right now and as most PC games are sold online to a young and tech-savvy demographic, they are a perfect fit for cryptocurrency payments. One platform taking advantage of this by selling digital game licenses for bitcoin cash is Keys4coins. Also Read: How to Pay for Flights on Your Next Business Trip With Bitcoin Cash How to Buy Video Game Keys With Cryptocurrency If you are looking to expand your video games library using crypto, make sure to check out Keys4coins. This Norway-based online store offers digital licenses for games on several platforms such Valve’s Steam, EA’s Origin and Ubisoft’s Uplay. The service is meant to offer cheaper prices than the official stores while also being faster and safer thanks to the use of cryptocurrency. Beyond BCH, other payment options include doge, monero and dash. Last June the online game store announced the acceptance of zero-confirmation transactions with BCH. This means as soon as the bitcoin cash network broadcasts the transaction, Keys4coins users are allowed to claim their digital game licenses right away rather than waiting for multiple confirmations. For more spending options with BCH, check out the Bitcoin.com Store’s gift cards section, which offers hundreds of premium branded cards to various top retailers including the Nintendo eshop, the Sony Playstation store and Xbox Live Gold. What do you think about buying video games with BCH? Share your thoughts in the comments section below. Images courtesy of Shutterstock. Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com. Avi Mizrahi Avi Mizrahi is an economist and entrepreneur who has been covering Bitcoin as a journalist since 2013. He has spoken about the promise of cryptocurrency and blockchain technology at numerous financial conferences around the world, from London to Hong-Kong.

Staking, Ethereum’s Mining Alternative, Will Be Profitable – But Barely

Staking, Ethereum’s Mining Alternative, Will Be Profitable – But Barely

The Takeaway Ethereum is soon to abandon bitcoin-style proof-of-work (PoS) mining in favor of a long-in-development alternative system called proof-of-stake (PoS), but the economics are still being worked out. Under a proposal by creator Vitalik Buterin, computer operators who validate transactions would be able to earn 5 percent annual on a minimum 32 ETH (~$5,500) investment, or roughly $260, at present prices. The profitability of computer operators who validate transactions is deemed by some analysts to favor those who run their own hardware as opposed to relying on cloud services. Computer operators helping to validate transactions in a forthcoming version of ethereum – dubbed ethereum 2.0 – will see positive returns on their investment but not much, according to new data. According to newly proposed numbers by ethereum creator Vitalik Buterin, validators – which are what miners are called in ethereum 2.0 – are projected to earn around 5 percent annually on their 32 ether (ETH) investment. At present ether prices, this would be an annual return of roughly $260. However, factor in hardware, electricity and other additional overhead costs of running a validator on ethereum 2.0 and the annual profit margin drops down to roughly $41 or a net yield of 0.80 percent. Assuming ether prices at $160, under the old issuance schedule, the net yield would have been -1.87 percent, according to global token strategist for Consensys Collin Myers. “When you include the expenses of running your own machine in your own home, the net yield is 0.80 [percent],” said Myers to CoinDesk. “So, it’s low but it’s positive compared to the last time it was not positive.” Validators under a different reward issuance schedule proposed as recently as two weeks ago would have only turned over a profit if they were the first 300,000 or so in the network to stake their tokens. This is because ethereum 2.0’s code would attempt to dynamically incentivize the number of people staking their ether and taper reward issuance as more ether is staked. Now, under the new issuance schedule, the first one million validators will turn over a profit on their investment. This, according to director of Consensys Capital Tanner Hoban, is a significant improvement to the anticipated design of ethereum 2.0. “I think it provides stronger security…

Binance Considered Pushing for Bitcoin Rollback Following $40 Million Hack

Binance Considered Pushing for Bitcoin Rollback Following $40 Million Hack

UPDATE: After this article was published, Changpeng Zhao, CEO of Binance, said in a follow-up tweet that after speaking with various parties, the exchange decided not to pursue the rollback approach. After speaking with various parties, including @JeremyRubin, @_prestwich, @bcmakes, @hasufl, @JihanWu and others, we decided NOT to pursue the re-org approach. Considerations being: — CZ Binance (@cz_binance) May 8, 2019 Binance CEO Changpeng Zhao and his team earlier today said they were considering pushing for a rollback on the bitcoin network after hackers stole 7,000 bitcoin. Zhao hosted an Ask-Me-Anything live session at 3:00 UTC on Wednesday to address various questions from the community including the hack that stole some 7,000 bitcoin from the exchange just a few hours ago. Answering questions on whether the firm considers rolling back bitcoin network transactions, which would require pushing for consensus from major miners and mining pools to gather over 51 percent of the network’s total hashing power, Zhao said: “To be honest, we can actually do this probably within the next a few days. But there’re concerns that if we do a rollback on the bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin.” However, to try and roll back the network without an agreement between the entire industry and community would most likely be seen by many as effectively an attack on the bitcoin network, which is intended to be immutable. He added that he has also seen a lot of people objecting to rollbacks since there are the “ethical and reputational considerations for the bitcoin network.” “The team is still deciding that, and we are running through the numbers and checking everything,” he said. “It’s interesting that it’s a tech solution [suggested] to us by the community, including some of the core members of the bitcoin development team. We will consider that very, very carefully, with the feedback we are receiving.” Zhao added the company is now focusing on rebuilding and recovering the system, and has hence suspended all withdrawal and deposit, which he said is estimated to “take about a week” to resume. So far, Binance has not found any other of its hot wallet addresses that are compromised. Zhao said the hackers…

Binance May Consider Pushing for Bitcoin Rollback Following $40 Million Hack

Binance May Consider Pushing for Bitcoin Rollback Following $40 Million Hack

UPDATE: After this article was published, Zhao said in a follow-up tweet that after speaking with various parties, the exchange decided it will not pursue the rollback approach.  Crypto exchange Binance founder and CEO Changpeng Zhao said the team is deciding on whether it will push for a rollback on the bitcoin network following a $40 million hack on the exchange earlier Wednesday. Zhao hosted an Ask-Me-Anything live session at 3:00 UTC on Wednesday to address various questions from the community including the hack that stole some 7,000 bitcoin from the exchange just a few hours ago. Answering questions on whether the firm considers rolling back bitcoin network transactions, which would require pushing for consensus from major miners and mining pools to gather over 51 percent of the network’s total hashing power, Zhao said: “To be honest, we can actually do this probably within the next a few days. But there’re concerns that if we do a rollback on the bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin.” He added that he has also seen a lot of people objecting to rollbacks since there are the “ethical and reputational considerations for the bitcoin network.” “The team is still deciding that, and we are running through the numbers and checking everything,” he said. “It’s interesting that it’s a tech solution [suggested] to us by the community, including some of the core members of the bitcoin development team. We will consider that very, very carefully, with the feedback we are receiving.” Zhao added the company is now focusing on rebuilding and recovering the system, and has hence suspended all withdrawal and deposit, which he said is estimated to “take about a week” to resume. So far, Binance has not found any other of its hot wallet addresses that are compromised. Zhao said the hackers used sophisticated methods to gain access to users’ accounts and orchestrated the hack patiently, in the sense that “they don’t move as soon as they have one account but have waited until they have a large number of high net worth accounts.” Elsewhere in his session, Zhao said Binance has enough resources from its Secure Asset Fund for Users (SAFU fund) for recovering the…

Binance May Consider Bitcoin Rollback Following $40 Million Hack

Binance May Consider Bitcoin Rollback Following $40 Million Hack

Crypto exchange Binance founder and CEO Changpeng Zhao said the team is deciding on whether it will do a rollback on the bitcoin network following a $40 million hack on the exchange earlier Wednesday. Zhao hosted an Ask-Me-Anything live session at 3:00 UTC on Wednesday to address various questions from the community including the hack that stole some 7,000 bitcoin from the exchange just a few hours ago. Answering questions on whether the firm considers rolling back bitcoin network transactions, which would require consensus from major miners and mining pools to gather over 51 percent of the network’s total hashing power, Zhao said: “To be honest, we can actually do this probably within the next a few days. But there’re concerns that if we do a rollback on the bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin.” He added that he has also seen a lot of people objecting to rollbacks since there are the “ethical and reputational considerations for the bitcoin network.” “The team is still deciding that, and we are running through the numbers and checking everything,” he said. “It’s interesting that it’s a tech solution [suggested] to us by the community, including some of the core members of the bitcoin development team. We will consider that very, very carefully, with the feedback we are receiving.” Zhao added the company is now focusing on rebuilding and recovering the system, and has hence suspended all withdrawal and deposit, which he said is estimated to “take about a week” to resume. So far, Binance has not found any other of its hot wallet addresses that are compromised. Zhao said the hackers used sophisticated methods to gain access to users’ accounts and orchestrated the hack patiently, in the sense that “they don’t move as soon as they have one account but have waited until they have a large number of high net worth accounts.” Elsewhere in his session, Zhao said Binance has enough resources from its Secure Asset Fund for Users (SAFU fund) for recovering the loss of $40 million for users, though “it does hurt very much.” Binance started allocating 10 percent of its trading fees every month since July last year to the SAFU fund.…

Hackers Steal $40.7 Million in Bitcoin From Crypto Exchange Binance

Hackers Steal $40.7 Million in Bitcoin From Crypto Exchange Binance

Hackers stole more than 7,000 bitcoin from crypto exchange Binance, the world’s largest by volume, the startup reported Tuesday. Binance announced that a “large scale security breach” was discovered earlier on May 7, finding that malicious actors were able to access user API keys, two-factor authentication codes and “potentially other info,” the exchange’s CEO, Changpeng Zhao, said in a letter. As a result, they were able to withdraw roughly $41 million in bitcoin from the exchange, according to a transaction published in the security notice. The disclosure comes hours after Zhao tweeted that the exchange was undertaking “some unscheduled server maintenance,” writing that “funds are #safu.” After the disclosure announcement, Zhao tweeted that the exchange would “provide a more detailed update shortly.” The exchange may not yet have identified all impacted accounts, he said. And according to Binance’s statement, the breach only impacted Binance’s hot wallet, which contains roughly 2 percent of the exchange’s total bitcoin holdings. “All of our other wallets are secure and unharmed,” he said, adding: “The hackers had the patience to wait, and execute well-prepared actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.” The withdrawal triggered internal alarms after it was executed, and Zhao said the exchange froze withdrawals following the discovery. While deposits and withdrawals will remain suspended for the next week, trading will be re-enabled, though he cautioned that “the hackers may still control certain user accounts.” Binance will conduct “a thorough security review” encompassing its systems and data during the next week. The exchange will use its Secure Asset Fund for Users (SAFU fund) to cover the loss, which won’t impact users, according to the notice. The fund consists of 10 percent of all trading fees absorbed by the exchange, and was initially launched to protect Binance’s users “in extreme cases,” according to a previous notice. It is stored in its own cold wallet. “In this difficult time, we strive to maintain transparency and would be appreciative of your support,” Zhao said Tuesday. He concluded the note by saying he would participate in a previously scheduled…

Hackers Withdraw 7,000 Bitcoins in Binance Crypto Exchange Security Breach

Hackers Withdraw 7,000 Bitcoins in Binance Crypto Exchange Security Breach

Binance, one of the largest cryptocurrency exchanges by daily trade volume, has experienced a major security breach on May 7, according to a statement shared with Cointelegraph on May 7. Per Binance, hackers employed a variety of tactics including phishing and viruses to obtain a large number of 2FA codes and API keys in addition to other information. According to the exchange, there was one affected transaction, wherein hackers were able to withdraw 7,000 bitcoins (BTC) worth $40,705,000 at press time. This story is developing and will updated in the future.