Bitcoin Used in SEC Market Manipulation Case

The Securities and Exchange Commission have charged day trader Joseph P. Willner with market manipulation and illegal use of brokerage accounts. It’s alleged that Willner managed to generate over $700,000 in profits from the scheme. He and an accomplice had access to more than 100 traders’ accounts and used them to manipulate the price of various stocks and securities. This allowed the pair to profit on from the advantageous conditions created using various accounts of Willner’s.

To pay his accomplice, Willner is reported to have used Bitcoin, stating over a private messaging service:

I know you wanted to make sure I btc [bitcoin] you but already impatient for 1450?

The SEC report claims that all profits were split between the two evenly and that Willner transferred cash generated during profitable trades to a “digital currency company that converts dollars to… cryptocurrency.”

The pair took advantage of the lower trading volumes before and after market hours. During this time they could be more ruthless with their manipulation. The commission allege that the defendant and his accomplice could generate some $6,000 during a single session through practice that violates SEC rule. As punishment, they seek the return of all funds plus interest and penalties. Understandably, there will also be an injunction against the pair, prohibiting them from attempting similar again.

The 42-year-old day-trader had used a pseudonym during conversations with his accomplice. However, he neglected to hide his IP address and committed most of the offence and communication about it using his home internet connection.

The SEC have recently launched a Cyber Unit to address a myriad of new digital issues facing investors, of which fraudulent account activity and cryptocurrency use are included. Stephanie Avakian, Co Director of the SEC’s Division of Enforcement commented:

Account takeovers are an increasingly significant threat to retail investors, and it is exactly the type of fraud our new Cyber Unit is focusing on. We are committing substantial resources to combating cyber-based threats to protect investors and our markets from intruders who manipulate the system for their own illicit gain.

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Speaking at an investor conference in New York on Tuesday, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon blasted Bitcoin in a series on damning statements. Calling the cryptocurrency a “fraud” that’s “worse than tulip bulbs”, he went on to say he’d fire any employee trading Bitcoin “in a second”. He gave the following concise reasons: “It’s against our rules” and “they’re stupid”. He concluded that both cases were “dangerous” to his bottom line.

When Dimon refers to tulips, he means the market crash that affected the horticulturists of Holland in the seventeenth century. Speculators drove the prices of tulip bulbs to astronomic levels, some scholars claim as much as ten times an annual skilled worker’s salary for a single bulb. The “bubble” eventually burst, largely due to the hugely dubious nature of trades occurring on the ramshackle effort at a futures market that had sprung up around the industry. The spectacular crash in the price of tulip bulbs in 1637 that followed is often cited as the history’s first economic bubble. It’s also trotted out by just about every vocal anti-crypto-type going.

However, Dimon had more for Bitcoin than just vague language (“fraud”?), and talk of inflated tulip bulbs. He went on to highlight his doubts about future regulatory measures against cryptocurrency. He spoke of concerns regarding the lack of state control over the asset and warns of government intervention. “Someone’s going to get killed and then the government’s going to come down.” He has cited the recent clampdown in China as evidence to back up his claims, concluding “governments like to control their money supply.”

Expressing sentiments that seem straight from 2015, the chief executive dismissed the huge legitimate economy that has emerged around Bitcoin since its early shadowy past:

“If you were a drug dealer, a murderer, stuff like that, you are better off doing it in Bitcoin than U.S dollars. So, there may be a market for that, but it’d be a limited market.”

Such a stance might come as a surprise to those familiar with the Enterprise Ethereum Alliance. The JPMorgan logo has been proudly displayed amongst the rest of the “who’s who” of global corporations making up the much-lauded group. However, Dimon did comment on blockchain technology more generally too. He confirmed that there will still be great use cases for the protocol, particularly in the banking sector but it “won’t be overnight”.

All that said, Dimon, did finish by saying that his “daughter” had purchased some Bitcoin…

Ref: Business Insider | Bloomberg | Image: Alexas_Fotos (License CC0)

An English businessman, Renwick Haddow has been charged by the United States Securities and Exchange Commission for securities fraud. According to reports, Haddow was promoting a fraudulent cryptocurrency trading platform, causing losses to unsuspecting investors.

Haddow, who has been living in the New York is said to have been running two businesses, Bitcoin Store — a cryptocurrency investment platform and a flexible workspace firm called Bar Works. During the course of their operations, he diverted the investments received by these businesses into overseas accounts created in Mauritius and Morocco.

A leading English daily quoted the director of the SEC’s New York Office, Andrew Calamari saying,

“Haddow created two trendy companies and misled investors into believing that highly qualified executives were leading them to profitability… In reality, Haddow controlled the companies from behind the scenes, and they were far from profitable.”

Haddow, for a while successfully managed to cheat people of as much as $5 million. He came under the scanner after about 27 Chinese investors filed a complaint after they failed to get back their $3 million investment in Bar Works. They suspected Haddow of running a Ponzi scheme.

During the course of an investigation, the SEC found discrepancies in the accounts, where the inflow of funds into Bitcoin Store’s account was only $250,000 in 2015, which was way less that what investors had put in. More complaints followed the initial complaint, and eventually, it was discovered the company was selling leases and subleases functioning as investment notes instead of providing workspaces in old bars and restaurants as advertised.

The SEC claims that it has been unable to find records of any operations ever conducted by the Bitcoin Store, even though there have been millions in gross sales until now. While the SEC put an end to the Bitcoin Store’s operations, there are many similar fraudulent schemes out there that keep popping up. It is advisable for investors to conduct sufficient due diligence before making any significant investment.

Ref: The Guardian | Image: NewsBTC

India is an emerging Bitcoin market. As more people get to know about the cryptocurrency, the target audience for scammers is also on the rise. According to recent reports, cybercriminals are increasingly targeting the wealthy and affluent in the country, scamming them of their money by promising Bitcoin in return.

Bitcoin scams, like any other investment scam, is prevalent across the world. The ones who fall prey to these are generally those who are new to cryptocurrencies. Many Indian’s have taken an interest in Bitcoin following the recent demonetization move, which almost crippled the economy. Their lack of understanding of the cryptocurrency and a desire to be part of the movement, especially with Bitcoin’s performance in recent months have made them an ideal prey for criminals.

A leading Indian news outlet recently published the story of an Indian businessman who was defrauded of INR 8.5 lakhs by an alleged Bitcoin miner. According to the report, the miner promised to pay him ten bitcoins in return for the investment, assuring the investment to increase by two-fold in 6 months.

While the report is unclear about what happened later, it suggests that the person posing as a miner failed to transfer the ten bitcoins as promised. The publication also goes on to quote law enforcement officials stating an increase in bitcoin-related frauds in the country since the demonetization.

“Cases of fraud related to bitcoins are becoming more frequent. This [increased acceptance of Bitcoin among global companies] has attracted many new investors. However, cashing on its rising popularity, some scammers are also running fraud set-ups,” said a senior crime branch officer.

The article also states that the businessman decided not to file a complaint as Bitcoin is not a recognized currency according to the Reserve Bank of India. The Indian government and the Reserve Bank of India are hesitant to give the digital currency a legal status due to various reasons.

Instead of warning the users of the risks of associated with Bitcoin, people should be educated about the cryptocurrency and its uses. It will enable them to take informed investment decisions. The cryptocurrency companies in the region are already involved in creating awareness about the digital currency. They are also organizing meetups and conferences for that purpose. At the same time, the country’s exchanges have also formed an alliance to standardize self-regulations and to influence regulatory policies.

It is always advisable for the investors to do some background research and due diligence before investing in any asset. If anything sounds too good to be true, it often is. Once people start taking these precautions, they can avoid being scammed by criminals.

Ref: India Today | Image: NewsBTC

Online fraud is becoming the most popular development of the 21st century so far. A Nigerian individual is facing US charges for this involvement in multiple scams. By impersonating vendors and company executives, the managed to scam hundreds of victims. All victims made large wire transfers to fraudulent accounts, resulting in a total loss of close to US$3.1bn.

David Chukwuneke Adindu pleaded not guilty to these charges. However, prosecutors are still planning to charge him with wire fraud and deliberately defrauding customers. For now, it remains unclear when the sentence will be handed down, although it is doubtful the verdict will take place before the end of 2016.

Fraud Continues To Thrive Thanks To Wire Transfers

The FBI, together with other law enforcement agencies, identified Adindu’s involvement in this global online fraud ring. Between October 2013 and November 2016, over 22,000 complaints were made. All of these cases relate to business email compromise scams, requesting a total of US$3.1bn in transfers.

Together with other unknown criminals, these scams were mostly successful, resulting in hefty financial losses. Moreover, the investigation revealed the group shared information as to how they should proceed. Scripts for requesting wire transfers, as well as names and email addresses, were exchanged. In doing so, they could impersonate potential victims, making their claims more legitimate.

One of the victims of these fraud attempts is an undisclosed New York investment firm. This particular scam revolved around a US$25,500 wire transfer. Although that request was met, the company quickly discovered the second demand for money was fraudulent. They filed a complaint with the FBI to further investigate this scam, which ultimately caused the arrest of Adindu.

It is not the first, nor the least time cyber scams are gaining mainstream traction. Business email compromise is a favorite tool among criminals all over the world. Since targeted companies regularly execute foreign wire transfers, such requests are not out of the ordinary. This is also another example of how banks facilitate crime, rather than Bitcoin or cryptocurrencies.

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The banknote ban in India is causing some rather unexpected results. Axis Bank’s Noida branch suffered from a similar incident as what happened to Wells Fargo customer not took long ago. Bank employees opened fictitious bank accounts to deposit a lot of money, allowing them to bypass the current demonetisation plans. Banks remain the perfect partner in crime to get illegal funds into the formal system.

This news related to Axis Bank took quite a lot of people by surprise. Criminals are resorting to new means to make sure their “black money” gets laundered. Using regular banks to do so is nothing new under the sun, though. Forged documents have been used to open fake bank accounts.

Axis Bank And Wells Fargo Are Not That Different

To put that latter sentence into perspective, it is impossible to do without the bank officials knowing about this scheme. Wells Fargo did the same with 2 million accounts, and rest assured their officials were well aware of what was happening. Axis Bank is no different in that regard, or at least, where their Noida branch is concerned.

It is not the first time Axis Bank is mentioned in the same breath as money laundering either. Several dozen fake bank accounts were identified at a different branch a few days ago. Those accounts also saw can influx of illegal money. With these new accounts being added to the mix, a very dark future looms overhead for the bank.

The only way to convert illegal banknotes to legitimate currency is by going through a bank. This also makes these institutions the biggest culprit in money laundering efforts. After all, they can skew the numbers, create fake accounts, and even forge documents to make everything seem legitimate. Criminals rely on banks to facilitate money laundering, and will not go through the trouble of buying and selling Bitcoin to do so.

All of this goes to show the banking system remains the main facilitator of illicit activity. Particularly in countries where banknotes are banned or replaced by others, they are the only ones holding all of the power. It is only normal some illegal funds will slip through. But there is a big difference with facilitating money laundering by creating fake accounts. Both Wells Fargo and Axis Bank have a lot of explaining to do.

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During the 2016 holiday weekend, global online sales have seen a significant nudge upwards. At the same time, payment card fraud increased by a whopping 20%. Consumer’s financial details are always at risk when dealing with payment cards these days. Bitcoin is a far safer option, as there is no sensitive personal information leaked during the transaction process.

The rise in payment fraud during the 2016 holiday shopping season is not surprising. Both Black Friday and Cyber Monday saw an influx of global customers. However, this transaction volume makes it harder to determine which transactions are legitimate. But the concerns ago much deeper, as five types of fraud reports were filed.

First of all, there is credit card fraud. Everyone knows payment cards are inherently insecure, and provide significant risks to both owner and retailer. Very few companies perform thorough checks of payment card data when processing an order, making life easier for criminals shopping online.

Bitcoin Remains The Safe Way To Shop Online

Identity theft is another major concern, particularly during the holiday season. Vast amounts of personal information are floating around on the Internet, and criminals will sniff out sensitive details with relative ease. Thanks to email scams, which complete the top three, users are often tricked into giving up that type of information as well.

Promotion abuse is another popular trend, although its impact can often be negated. Users will experience annoyance through this type of fraud, but it should not affect them in a significant manner. Account takeover, on the other hand, is far more troublesome. Hacked social media profiles become far more common during the holiday season. Mostly due to consumers being more careless with their passwords.

During Black Friday and Cyber Monday, mobile transactions were on the rise as well. Although mobile devices are commonly used for payments, they are not secure. Malware, scareware, and remote access trojans are just a few of the looming threats. Consumers storing payment information on these devices are at risk at any given time.

In the end, it goes to show traditional payment methods suffer from a lot of security issues. Bitcoin is a more secure solution, as no sensitive information can be obtained by analyzing transactions. Unfortunately, cryptocurrency is not as widespread when it comes to online shopping. But that situation can change at any given moment.

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Banking woes can hit anyone in every country at any given time. Customers of Esto Bank have come to realize that fact, although there are dire consequences. Online payments for all account holders have been halted, and over 20,000 accounts are affected by an unspecified theft. Things aren’t looking all that good for these UK bank customers, to say the least.

Not having access to banking services is bad enough, but losing money is never a fun experience. Over 20,000 Tesco Bank users have fallen victim to bank theft, although specifics remain unknown. Moreover, nearly 40,000 users saw suspicious activity related to their banking accounts over the past few days.

While Tesco Bank is hopeful they can refund customers within the next few days, the incident raises a lot of questions. Affected customers can still use their cards for ATM withdrawals or regular payments, though. Online banking is accessible, but online transactions are prohibited until the matter is resolved.

Not A Great Weekend For Tesco Bank Customers

Money being withdrawn fraudulently from so many different accounts is quite worrisome. Customers started complaining about this strange activity over the weekend. Additionally, several Tesco Bank customers had their payment cards blocked for no apparent reason. It appears someone infiltrated core bank systems and wreaked all kinds of financial havoc.

Customers who lost money are reporting vast sums being withdrawn from their bank account. One user lost £600 during this attack, which is quite a lot of funds. Tesco was unable to offer him emergency funds but was willing to add £25 to his account total. Some users even had multiple accounts affected at the same times.

It is of the utmost importance Tesco bank comes clean regarding this hack. Fraudsters somehow obtained critical customer information and abused it on a large scale. Not disclosing specific details regarding this attack will reduce the trust between company and consumers. Speculation is running wild, as some people wonder if this was an inside job by a Tesco Bank employee.

According to the Financial Conduct Authority, Tesco Bank needs to refund unauthorized payments immediately. They will also have to pay for any charges or interest added to user accounts as a result of fraud. This news is another great example of how consumers need to control their own money at all times, rather than rely on third-party service providers.

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Just like in life, scammers and fraudsters in binary options industry are naturally attracted to anywhere money is. Binary options, being an alluring prospect to so many people, used to attracted scammers in droves. A lot of people have fallen prey to cheap binary option scams in the past, and they are still being conned to this date. While scamming is not exclusive to binary options, binary options have had it fair share. However, it is important to note that a lot of progress has been made in this aspect.

Ever since Binary Options trading hit the mainstream market around the year 2008, traders and interested folks have had it tough avoiding the plethora of binary options scamming brokers out there. Then, people believed binary option trading is the magic wand that will solve all their financial straggles.  However, things began to change as soon as traders realized the presence of scam binary options brokers everywhere. Gone are the days when folk believe account managers who promise to double accounts within few days.

Those days when traders believed binary options brokers when they say there is no risk involved in binary option trading are long gone. Now, unregulated brokers do not have the same freedom and ability to lure new traders like it used to be. Moreover, there are many more regulated brokers so that any unregulated broker will have hard time convincing new traders to join their platform.  

Finally, while it is obvious that a lot of remarkable progress have been made over the years to curtail binary options scam, there is still a lot of improvement to be made in the industry.  The binary options industry is no longer a haven for scam artist like it used to be, but that is not to say they are completely gone.  

As long as binary options continue to exist, there will be scammers. What is most important is for traders to know their way round and avoid these scams as much as they can. As a trader, your job is to never stop questioning everything you hear or read from brokers, signal providers and software sellers. Being on alert for scam will surely help you avoid a whole lot of them.

As a trader, your job is to never stop questioning everything you hear or read from brokers, Binary Signals providers and software sellers. Being on alert for scam will surely help you avoid a whole lot of them. As a trader, your job is to never stop questioning everything you hear or read from brokers, Binary Signals providers and software sellers. Being on alert for scam will surely help you avoid a whole lot of them

Cover Image via Mark Mathosian

Bank ATMs have always been a valuable target for criminals. In most cases, they would use malware to steal card information and defraud users. However, it looks like a more dangerous trend is taking place over in Europe right now. The number of cash machines being blown up with explosives has increased by 80% in the first half of 2016. A very worrisome trend, to say the least.

One of the more obvious questions is why criminals would decide to blow up cash machines in the first place. With nearly 500 machines becoming subject to these violent attacks in the first half of 2016, it is hard to deny this new trend. For some reason, Europe seems to be the main base of operations for this type of activity.

Bank ATMs Get Blown Up Over In Europe

To blow up a bank ATM, one needs a particular set of skills and tools. In most of the attacks, criminal masterminds used gas, which is far less dangerous to handle. However, nearly four in ten attacks used solid explosives. It is not unlikely the tools required were purchased from the darknet, albeit that not been officially confirmed just yet.

Despite taking these rather thorough methods of attack, the average loss per ATM was “only” 16,600 EUR. Do keep in mind this is only the amount of money stolen and does not include any damages caused. In most cases where explosives were used, equipment and nearby buildings were damaged in the process.

Given the mounting number of blown up bank ATMs in Europe, the “profits” only rose by 3%. This goes to show that, while being a lucrative market, it is not a get rich quick scheme by any means. Blowing up a cash machine requires some initial investment, albeit the costs are recuperated easily when the process is completed successfully.

Looking over the first half of 2016, a total of 27m EUR has been lost due to these attacks. However, that number remains smaller compared to burglary attacks and robberies. However, if the number of blown up bank ATMs continues to increase in Europe – and other parts of the world – that situation may change in the years to come.

Unfortunately, blowing up cash machines is not the primary concern for banks right now. With ATM fraud rising by 28% in the first half of 2016, it goes to show these machines are vulnerable in many different ways. Most of the fraud stems forth from transaction reversal, whereas card skimming has seen a significant decline of 21%.

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