BITCOIN, Heists, Thefts, Hacks, Scams, and Losses

[Vanadium 50]

but the billionaire keeps the money he payed himself?

As they say, nice work if you can get it.

 

[kyphysics]

 

[Astronuc]

NEW YORK (AP) — The founder and former CEO of the failed cryptocurrency lending platform Celsius Network was freed on $40 million bail Thursday after pleading not guilty to federal fraud charges alleging that he schemed to defraud customers by misleading them about key aspects of the business.

Alexander Mashinsky, 57, of Manhattan, was charged with securities, commodities and wire fraud in an indictment unsealed in Manhattan federal court. He was also charged with illegally manipulating the price of Celsius’s proprietary crypto token while secretly selling his own tokens at inflated prices.

https://apnews.com/article/cryptocurrency-celsius-mashinsky-arrest-4b4296d01e15d171e51ad5bd94c19c7a

Alex Mashinsky, the founder and former CEO of bankrupt cryptocurrency lender Celsius, has been arrested and charged with fraud, federal prosecutors said on Thursday.

Mashinsky was charged with seven criminal counts, including securities, commodities and wire fraud, according to the U.S. attorney's office in Manhattan. He is also accused of misleading Celsius customers about the company's business, including how it would use their money, while depicting the lender as a bank when in fact it operated as a risky investment fund, according to the indictment.

https://www.cbsnews.com/news/celsius-founder-alex-mashinsky-arrested-charged-with-fraud/

https://www.axios.com/2023/07/13/alex-mashinsky-former-ceo-of-crypto-lender-celsius-arrested

Former Celsius crypto CEO Alex Mashinsky arrested on fraud charges; company to pay $4.7 billion in settlement
https://www.yahoo.com/news/former-celsius-crypto-ceo-alex-213600528.html

 

[Vanadium 50]

$45M? Wow. His bail bondsman must have him Krazy Glued to his house.

The position of the government is a bit hard to grasp. Is Celsius a security and the price is being manipulated? Or is it not a security and being sold as one?

 

[nsaspook]

https://news.yahoo.com/sam-bankman-fried-thrown-jail-192149874.html

Sam Bankman-Fried Thrown in Jail Over Bail Shenanigans​

https://slate.com/technology/2023/08/sbf-jail-bail-judge-ftx.html

Sam Bankman-Fried Was the Most Annoying Defendant of All Time​

Shenanigans tanked his crypto empire. Now they’ve put him behind bars early.​

 

[Vanadium 50]

What's SBF's defense going to be? It seems like "He's just a big dumb puppy, and there is no way he could have come up with a slick caper like this." This just feeds into the legend.

 

[nsaspook]

https://www.404media.co/crypto-star...osing-password-to-38-9-million-crypto-wallet/

A buzzy startup offering financial infrastructure to crypto companies has found itself bankrupt primarily because it can’t gain access to a physical crypto wallet with $38.9 million in it. The company also did not write down recovery phrases, locking itself out of the wallet forever in something it has called “The Wallet Event” to a bankruptcy judge.

Prime Trust pitches itself as a crypto fintech company designed to help other startups offer crypto retirement plans, know-your-customer interfaces, ensure liquidity, and a host of other services. It says it can help companies build crypto exchanges, payment platforms, and create stablecoins for its clients. The company has not had a good few months. In June, the state of Nevada filed to seize control of the company because it was near insolvency. It was then ordered to cease all operations by a federal judge because it allegedly used customers’ money to cover withdrawal requests from other companies.

My guess would be that wallet is already empty or will be "mysteriously" accessed and the money taken away years from now.

 

[fluidistic]

https://www.404media.co/crypto-star...osing-password-to-38-9-million-crypto-wallet/

My guess would be that wallet is already empty or will be "mysteriously" accessed and the money taken away years from now.

Absolutely mindblowing, totally impossible to believe. They ''lost'' the steel plates that has written on them the seedphrase (i.e. the private key to the 38 M dollars wallet)?

Specialists in security losing all their steel plates which were very likely kept in different places. Not sure who they're trying to fool. Their own grandmothers I guess.

 

[Vanadium 50]

"Who was in charge of keeping track of our wallet?"
"Bob":
"Where is he today?"
"Out...something about the Cayman Islands"

 

[Vanadium 50]

An interesting legal question: Bob steals some ShadyCrypto from Bill. He then converts it to dollars by selling it to Sue.

Who is the victim here?

Now assume that ShadyCrypto falls in value by a factor 10. Bob, feeling remorse, buys some ShadyCrypto with his gains and puts it back. Bill never noticed it was gone.

Now who is the victim here?

 

[nsaspook]

Feeling remorse? Bob steals the rest of ShadyCrypto and sells it before the dollar value is zero.

Bob is the victim because he should have stolen it all the first time.

 

[nsaspook]

https://www.coindesk.com/policy/202...-of-collapsed-turkish-crypto-exchange-thodex/

Faruk Fatih Özer, the founder of the collapsed Turkish crypto exchange Thodex, his sister Serap Özer and his brother Güven Özer have been sentenced to 11,196 years, 10 months and 15 days in prison, according to local media. A judicial fine of 135 million liras ($5 million approx.) was also imposed.
Thodex was one of Turkey's largest crypto exchanges before it suddenly went offline in April 2021 and Özer went missing. Over 400,000 members were left in the dark without access to deposits of $2 billion in cryptocurrencies. Özer had fled to Albania but was arrested in August 2022 after an Interpol red notice against him.

11,196 years, 10 months and 15 days in a Turkish prison, seems like a just punishment.

 

[Vanadium 50]

It's the 15 days at the end that gets me. "Your honor, could you make it 13 days? I play golf on Thursdays."

I don;t know why Ozer didn't flee to the UAE or somewhere else without extradition and where money talks - and not too many questions are asked about where it came from.

Also, Turkey is special. They have had and continue to have horrific inflation (seems common to all currencies named the lira) so crypto may in fact be a better store of value than the national currency. So the people who were scammed probably are more ordinary citizens than get-rich-quick schemers. Also, politics may have played a factor - there were elections in Turkey and the number of victims is only 3-4x Ergodan's margin of victory.

If I did the math right, the sentence was 3 minutes per dollar. For bank robbery in the US, it's more like 15 hours. He got off easy.

 

[nsaspook]

https://news.yahoo.com/robbery-salvadorans-slow-adopt-bitcoin-191002188.html

But two years after El Salvador became the first country in the world to adopt Bitcoin as its currency, alongside the US dollar, "the goals that were pursued... have not been achieved, people hardly use it, they don't have much trust" in crypto, economist and former Reserve Bank governor Carlos Acevedo told AFP.

"The experiment has not worked, it is a crypto winter," he said.

There are no figures available on how many Salvadorans have taken up Bitcoin.

But a poll conducted in May by the Central American University found that 71 percent believed the cryptocurrency "has in no way helped to improve their family economic situation."

On the streets of San Salvador, the verdict is harsh.

"I don't see that money working, it's just propaganda. Where's the benefit? There's no benefit. It's a bad investment," newspaper vendor Juan Antonio Salgado, 65, told AFP.

"It's robbery," he added, in reference to the currency's volatility.

 

[Vanadium 50]

He's 65, so he clearly doesn't understand the New Economy. Like stonks, crypto only goes up!

 

[nsaspook]

https://www.cnbc.com/2023/09/12/cry...20-years-prison-in-4-billion-ponzi-fraud.html

The co-founder of the fraudulent OneCoin cryptocurrency, a massive pyramid scheme that amassed more than $4 billion from millions of investors worldwide, was sentenced Tuesday to 20 years in prison.

Karl Greenwood, 46, who orchestrated the multibillion-dollar multilevel marketing con, pleaded guilty in December to wire fraud and money laundering charges.

His partner, Ruja Ignatova, 43, known as the “Cryptoqueen” on the FBI’s Top 10 Most Wanted list, remains at large, the U.S. Department of Justice said.

Greenwood “operated one of the largest fraud schemes ever perpetrated,” U.S. Attorney Damian Williams said in a press release.

https://www.fbi.gov/wanted/topten/ruja-ignatova/@@download.pdf

The FBI is offering a reward of up to $250,000 for information leading to the arrest of Ruja Ignatova.

 

[nsaspook]

https://www.bleepingcomputer.com/ne...-million-worth-of-cryptocurrency-from-coinex/

Hackers steal $53 million worth of cryptocurrency from CoinEx​

Global cryptocurrency exchange CoinEX announced that someone hacked its hot wallets and stole large amounts of digital assets that were used to support the platform's operations.

The incident occurred on September 12 and preliminary results of the investigation show that the unauthorized transactions involved Ethereum ($ETH), Tron ($TRON), and Polygon ($MATIC) cryptocurrency.

 

[Vanadium 50]

The FBI is offering a reward of up to $250,000 for information leading to the arrest of Ruja Ignatova.

Payable in crypto?

 

[Vanadium 50]

The NYT is publishing Bankman-Fried's latest scribblings. "Sam Bankman-Fried speaks out" is not news. "Sam Bankman-Fried shuts up" would be.

 

[nsaspook]

https://www.cnbc.com/2023/09/19/sbf...ions-of-dollars-in-misappropriated-funds.html

The suit goes on to allege that as early as 2019, Sam’s father directly participated in efforts to cover up a whistleblower complaint which threatened to “expose the FTX Group as a house of cards.” The filing also details emails written by Bankman in which he complained to the FTX US Head of Administration that his annual salary was $200,000, when he was “supposed to be getting $1M/yr.”

That grievance was ultimately elevated to his son in an email, according to the lawsuit: “Gee, Sam I don’t know what to say here. This is the first have heard of the 200K a year salary! Putting Barbara on this.”

The filing characterizes the correspondence as Bankman lobbying his son to “massively increase his own salary.” Within two weeks, the suit claims that Bankman-Fried had collectively gifted his parents $10 million in funds coming from Alameda, and within three months, the couple was deeded the $16.4 million property in The Bahamas.

 

[russ_watters]

https://www.cnbc.com/2023/09/19/sbf...ions-of-dollars-in-misappropriated-funds.html

Uh oh, looks like dad and kid may end up cellmates.

 

[Vanadium 50]

"So, don't think of me as your father. Think of me as you fence."

 

[nsaspook]

https://www.bnnbloomberg.ca/stanfor...entirety-of-gifts-received-from-ftx-1.1973605

Stanford University plans to return millions of dollars it received from bankrupt crypto exchange FTX and related entities, a university spokesperson said in an emailed statement.

“We have been in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety,” the spokesperson said.

 

[Vanadium 50]

Getting a university to return a gift is a big deal. They do not like doing that.

Stanford is in the midst of a search for a new president. I bet the canididates are asked some interesting...er...hypotheticals on this.

 

[Haborix]

I weep for battered old Stanford.

 

[Vanadium 50]

Stanford will do OK. I mean, they could have SBF's parents co-teach a class in Business Ethics and have students lining up to take it!

 

[Astronuc]

Alameda had by mid-June 2022 borrowed 77% of the $13 billion of customer U.S. dollar deposits into FTX, according to an internal FTX spreadsheet introduced by prosecutors and authenticated by Ellison. Ellison said she asked FTX executives Gary Wang and Nishad Sing to gather the data for her when she grew concerned about the size of Alameda’s borrowings from FTX.

By this point in June, the data showed Alameda had borrowed 52% of all ETH deposits, 44% of USDT deposits and 25% of BTC deposits into FTX – as well as all of the Australian dollar and BRZ deposits into the exchange. (BRZ is an Ethereum token backed by Brazil’s currency, the real.)

When Genesis, a major Alameda lender, asked Ellison if she could provide documentation of Alameda’s financials, Ellison said she and Bankman-Fried worried that providing accurate financials would “show that Alameda was risky,” so the pair devised strategies to improve the look of Alameda’s financial position. (Genesis, now defunct, is a subsidiary of Digital Currency Group, which also owns CoinDesk.)

https://finance.yahoo.com/news/caroline-ellison-alameda-kept-using-134226709.html

 

[phinds]

Stanford will do OK. I mean, they could have SBF's parents co-teach a class in Business Ethics and have students lining up to take it!

Might have to be on a work-release program

 

[Vanadium 50]

Ethereum token backed by Brazil’s currency, the real

Couldn't they have used Dutch tulip futures or diseased cattle? You know, something more solvent?

 

[Vanadium 50]

Following up on the parents. They hired separate lawyers, which is...interesting. They received a $16M villa and at least $10M in cash as "gifts" from the company. Which, it seems, they do not want to return.

The "just a big dumb puppy that got in over his head" story is not likely to fly for two Stanford professors.