Tag Archives: cryptocurrency

Australian Watchdog Group Sues Meta Over Fake Crypto Ads on Facebook



The Australian Competition & Consumer Commission (ACCC) has sued Meta over its misleading conduct for publishing scam celebrity crypto ads on Facebook. The lawsuit includes Ireland Limited (which is also part of Meta).

The ACCC alleges that Meta “engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures.” It also alleges that that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by advertisers.

The ACCC alleges that the ads, which promoted investment in cryptocurrency or money-making schemes, were likely to mislead Facebook users into believing the advertised schemes were associated with well-known people features in the ads, such as businessman Dick Smith, TV presenter David Koch, and former NSW Premier Mike Baird. The schemes were in fact scams, and the people featured in the ads had never approved or endorsed them.

According to the ACCC: “The ads contained links that took Facebook users to a fake media article that included quotes attributed to the public figure in the ad endorsing a cryptocurrency or money-making scheme. Users were then invited to sign up and were subsequently called by scammers who used high pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes.”

Reuters reported a quote from ACCC Chair Rod Sims, who said: “The essence of our case is that Meta is responsible for these ads that it publishes on its platform. It is alleged that Meta was aware… scam ads were being displayed on Facebook but did not take sufficient steps to address the issue.”

The Guardian reported: The scam has likely raked in millions from unsuspecting people. One 77-year-old grandmother lost $80,000 in the investment, while the ACCC has said another person lost $650,000 through the scam.

The Sydney Morning Herald posted a response from a Meta company spokesman, who said the company did not want ads seeking to scam people out of money or mislead people on Facebook.

Personally, I do not believe the statement the Meta spokesperson gave. Meta is a huge company, and if it truly wanted to protect users from being harmed by fake crypto ads, it should have immediately acted to remove them. Meta left those ads up.


DOJ Seized $3.6 Billion in Stolen Cryptocurrency



The U.S. Department of Justice (DOJ) has arrested two individuals for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange. According to the DOJ, the cryptocurrency that was seized is presently valued at $4.5 billion. Law enforcement has seized over $3.6 billion in cryptocurrency linked to the Bitfinex hack.

“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”

The Wall Street Journal reported that the two people were both arrested without incident Tuesday morning in Manhattan. They have promoted themselves on social media as entrepreneurs with deep knowledge of tech and a love of travel.

According to The Wall Street Journal, at the couple’s appearance in Manhattan court, U.S. Magistrate Judge Debra Freeman set bond at $5 million for Mr. Lichtenstein and $3 million for Ms. Morgan, requiring that their parent’s homes be posted as security. The judge also ordered that they not have devices with internet access and prohibited them from conducting cryptocurrency transactions.

The two are facing charges related to conspiracy to commit money laundering and conspiracy to defraud the U.S. They were not charged with the hack of Bitfinex.

IBM explains that the blockchain has an immutable record of transactions. No participant can change or tamper with a transaction after it’s been recorded to the shared ledger. Transactions are recorded only once, eliminating the duplication of efforts that’s typical of traditional business records.

In short, the couple who allegedly attempted to launder a large amount of cryptocurrency left a trail of transactions that the Department of Justice used to discover the scheme. I’ve seen people on social media suggest that the blockchain is private and untraceable. However, the DOJ was very able to find the information they needed.


U.S. Department of Justice Unveiled Civil Cyber-Fraud Initiatives



The U.S. Deputy Attorney of the Justice Department, Lisa Monaco, unveiled two new enforcement initiatives aimed at targeting cryptocurrencies and government contractors who fail to report cyber breaches, Reuters reported. The U.S. Department of Justice website calls it the Civil Cyber-Fraud Initiative.

The initiative will combine the Justice Department’s expertise in civil fraud enforcement, government procurement and cybersecurity to combat new and emerging cyber threats to the security of sensitive information and critical systems.

Reuters reported that Deputy Attorney of the Justice Department, Lisa Monaco, gave a virtual speech at the Aspen Cyber Summit, about the new initiative. It includes a mix of anti-money laundering and cybersecurity experts. In addition, the initiative will focus on cryptocurrency.

“Cryptocurrency exchanges want to be the banks of the future, well we need to make sure that folks can have confidence when they’re using these systems and we need to be poised to root out abuse,” Monaco said. “The point is to protect consumers.”

According to Reuters, Deputy Attorney of the Justice Department, Lisa Monaco, also announced the use of a cyber fraud initiative, which will “use civil enforcement tools to pursue companies, those who are government contractors, who receive federal funds, when they fail to follow recommended cybersecurity standards.”

Personally, I think the Civil Cyber-Fraud Initiative could be a good thing. It sounds like it will enact enforcement against companies that are aware a breach occurred – but don’t tell their customers about it. Cryptocurrency is relatively new, and should have some regulation attached to in order to prevent fraud.

Some things the Cyber-Fraud Initiative includes:

  •  Use of False Claims Act to pursue cybersecurity related fraud by government contractors and grant recipients.
  •  A False Claims Act is the government’s primary civil tool to redress false claims for federal funds and property involving government programs and operations.
  •  A whistleblower provision, which allows private parties to assist the government in identifying and pursuing fraudulent conduct and to share in any recovery and protects whistleblowers who bring these violations and failures from retaliation.

China Declares All Cryptocurrency Activities Illegal



The People’s Bank of China has declared all digital currency activities illegal, and has vowed to crack down on the market, CNBC reported. According to CNBC, the People’s Bank of China said services offering trading, order matching, token issuance, and derivatives for virtual currencies are strictly prohibited. Overseas crypto exchanges providing services in mainland China are also illegal.

It appears that this decision affected the price of cryptocurrency, which resulted in the stocks for at least some types of cryptocurrency falling. CNBC pointed out that this comes after Beijing announced a crackdown on crypto mining earlier this year, which caused a slump in bitcoin’s processing power.

The Wall Street Journal reported that the People’s Bank of China declared all cryptocurrency-related transactions illegal to prevent the risks surrounding crypto trading and to maintain national security and social stability. According to the Wall Street Journal, the People’s Bank of China said that cryptocurrencies are issued by non monetary authorities, use encryption technologies and exist in digital form, and shouldn’t be circulated and used in the market as currencies.

I’m no expert on cryptocurrency, but it is my understanding that one of the reasons why some people like cryptocurrency is because they think the transactions are anonymous. However, the Federal Trade Commission (FTC) points out that “depending on the cryptocurrency, the information added to the blockchain can include details like the transaction amount and the sender’s and recipient’s wallet addresses”. To me, that sounds like China could potentially discover which of their people are buying or selling cryptocurrency.

I understand that a country can make rules or laws that people who live in that country are required to comply with. I’m having difficulty understanding why China’s decision to call all digital currency illegal also requires people who live in other countries to comply with China’s new rules.


Senators File an Amendment About Cryptocurrency and “Brokers”



The U.S. Senate is facing backlash from the cryptocurrency industry over a portion of the Infrastructure bill that would require crypto brokers to report customer information to the Internal Revenue Service (IRS), CNBC reported.

The bill broadens the definition of a “broker” to include anyone who is “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” The definition does not exclude miners, software developers, stakers and other individuals in the crypto economy who don’t have customers.

The language does not effect centralized exchanges like Coinbase, or other public companies where consumers can buy cryptocurrencies like Robinhood, Square, and PayPal. These companies have clearly identified customers and work with them on reporting requirements due to the IRS.

Politico reported that a bipartisan group of lawmakers want to narrow down who would be subject to new tax reporting requirements that are intended to improve tax compliance among those trading digital currencies. There is an amendment that is supported by one Democrat and two Republicans Senators, all of whom are on the Senate Finance Committee.

The Blockchain Association posted what amounts to an open letter titled: “More Than 100 Crypto Ecosystem Stakeholders Support Wyden-Lummis-Toomey Amendment in Infrastructure Bill”. Those who signed this open letter support the bipartisan amendment. From the letter:

“The Wyden-Lummis-Toomey Amendment addresses significant concern raised by the bill as currently drafted by removing the obligation to report from those participants who don’t have – and shouldn’t have – access to customer information. It does so without affecting the reporting obligations placed on brokers and traders of digital assets”.

According to Politico, the Biden administration feels that the cryptocurrency industry is “using scare tactics to water down the requirements” in the bill. CNBC reported including the requirement for crypto companies to report customer information to the IRS is part of how the Infrastructure bill will be paid for.


Nvidia Nerfs GeForce Cards to Deter Cryptocurrency Miners



Nvidia announced a change to their RTX 30 series cards. The purpose is to nerf them so that the cards will be less desirable to people who use them for mining cryptocurrency. To me, it sounds like this could make it easier for gamers to not only obtain Nvidia’s cards, but also to use them for their intended purpose – playing video games.

…To help get GeForce in the hands of gamers, we announced in February that all GeForce RTX 3060 graphics cards shipped with a reduced Ethereum hash rate.

Today we’re taking additional measures by applying a reduced ETH hash rate to newly manufactured GeForce RTX 3080, RTX 3070, and RTX 3060 Ti graphics cards. These cards will start shipping in late May…

Nvidia clarifies that because these GPUs originally launched with a full hash rate, they want to ensure that customers know exactly what they’re getting when they buy GeForce products. To help with his, Nvidia pointed out that their GeForce partners are labeling the GeForce RTX 3080, RTX 3070, and RTX 3060 Ti cards with a “Lite Hash Rate” or “LHR,” identifier. The identifier will be in retail product listings and on the box.

The reduced has rate does not apply to cards that have already been purchased. It will apply to newly manufactured cards with the LHR identifier.

The purpose of this change is to reinforce that GeForce is made for gaming. Nvidia says it believes this additional step will get more GeForce cards at better prices into the hands of gamers everywhere.

My hope is that this change will deter people who want to use GeForce cards for mining Ethereum cryptocurrency. It is abundantly clear that the Nvidia doesn’t want its cards used by crypto miners, especially as it appears that the result is that gamers can’t access the cards.

That said, The Verge reported that Nvidia tried to nerf mining with the RTX 3060, and accidentally released a beta driver that unlocked hash rates and increased performance. The Verge said that’s been reinstated with more recent drivers, but the beta drivers are “out in the wild now.”

The Verge also reported that Nvidia’s move to nerf new cards will drive up the prices for existing 30-series GPUs that don’t have those restrictions in place.


FTC Warns About Cryptocurrency Investment Scams



The Federal Trade Commission posted a warning about cryptocurrency investment scams. The information includes descriptions of how crypto scammers work – and how to avoid being scammed.

According to the FTC, “scammers are taking advantage of people’s understanding (or not) of cryptocurrency investments, and how they work. And younger people are losing big.”

The FTC’s new data spotlight shows that since October 2020, nearly 7,000 people reported losses to bogus cryptocurrency investments, adding up to more than $80 million. People ages 20-49 were more than five times more likely than other age groups to report losing money on those scams.

Cryptocurrency investment scams can happen in many ways, but they’re all full of fake promises and false guarantees. Scammers might post investment sites that look real, but you’ll find you can’t withdraw the money you’ve “invested”. Other pretend to be celebrities – like a would-be Elon Musk – doing giveaways with claims of multiplying any cryptocurrency you send. Scammers also use online dating sites to sweet-talk people into bogus crypto investments in the name of love.

The FTC stated that people in their 20s and 30s have lost more money on investment scams than on any other type of fraud. And more than half have reported investment scam losses – $35 million – were in cryptocurrency.

Personally, I think these scammers are disgusting people who intentionally take advantage of those who aren’t very knowledgable about cryptocurrency. It is even worse when they go on dating websites for the purpose of scamming a lonely person out of their money. The FTC points out that if you need to report a cryptocurrency scam you can visit Reportfraud.ftc.gov.