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

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The discussion highlights significant security issues surrounding Bitcoin exchanges, particularly focusing on the infamous Mt. Gox, which suffered a major theft leading to its bankruptcy. The exchange's management ignored critical warnings about its software's security flaws, resulting in millions lost and a tarnished reputation for Bitcoin. Other exchanges like Flexcoin and Canadian Bitcoins also reported substantial losses due to hacks and social engineering attacks. The conversation underscores the ongoing risks associated with Bitcoin transactions and the need for improved security measures in the cryptocurrency space. Overall, these incidents illustrate the vulnerabilities within the Bitcoin ecosystem that can lead to significant financial losses for users.
  • #961


The media hordes can make the worst look good.
 
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  • #962


One last time for Ms. Fong.
 
  • #963
Ellison apparently received only $6M in total compensation, so scaling back the sentence, I would say about one week is what's fair for her.
 
  • #964
https://www.cnbc.com/2024/04/05/ter...on-found-liable-in-us-civil-fraud-trial-.html

Terraform Labs and founder Do Kwon found liable in U.S. civil fraud trial​

The SEC estimates investors lost more than $40 billion on the two tokens combined when the TerraUSD peg to the dollar could not be maintained in May 2022.

Their collapse also dragged down the value of other cryptocurrencies, including bitcoin, and caused wider havoc in the crypto market, leading several companies to file for bankruptcy in 2022.

Terraform itself filed for bankruptcy protection in January.
 
  • #965
Ah, Do Kwon. The man who put the"Doh!" in cryptocurrency.

Is he still in a Montenegrin jail for trying to travel on a forged Costa Rican passport? ("OK, which one of you guys is...umm....Javier Gonzales"?)
 
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  • #966
Vanadium 50 said:
Ah, Do Kwon. The man who put the"Doh!" in cryptocurrency.

Is he still in a Montenegrin jail for trying to travel on a forged Costa Rican passport? ("OK, which one of you guys is...umm....Javier Gonzales"?)
Don't we all have a fake driver's license?
1712505236539.png
 
  • #967
https://www.livemint.com/news/crypt...l-tests-code-is-law-claim-11712599101095.html
Crypto Trader’s Criminal Trial Tests ‘Code Is Law’ Claim
In the crypto world, where digital blockchains govern who owns what, the virtual ecosystem is built around the notion that “code is law." It means that if something isn’t explicitly forbidden by terms of a crypto platform, then government can’t intercede. But prosecutors say those rules can’t protect traders against possible criminal charges for market manipulation or fraud.

“It touches on the big argument within crypto — is code law?" said Chris Janczewski, head of global investigations at TRM Labs. “If the code allows somebody to do that, does the actual law? Obviously, the government took a different approach that code is not law. Just because there is an opportunity to exploit it does not mean that it’s legal."
Prosecutors charged Avraham Eisenberg with manipulating Mango Markets futures contracts on Oct. 11, 2022, to boost the price of swaps by 1,300% in 20 minutes. He then “borrowed" from the exchange against the inflated value of those contracts, a move the government claims was a theft.

Jury selection began Monday in New York federal court, where groundbreaking crypto cases have played out. FTX co-founder Sam Bankman-Fried was sentenced there last month to 25 years in prison for orchestrating a multibillion-dollar scheme, while Terraform Labs Pte. and co-founder Do Kwon were found liable Friday for fraud in civil trial over the firm’s 2022 collapse, which wiped out $40 billion in investor assets.

So if the Blockchain bank of the future accidentally leaves the front door (login loophole) and the vault open (cryptographic loophole), does that mean the money (cryptocurrency) you took that night wasn't stolen?
 
  • #968
I don't see this as a defense that will go anywhere.

If I take out a loan from my bank, and flee the country with it, I'm in trouble. Especially if I then fly back.

Eisenberg took out a loan from an exchange, fled the country and then flew back. Now he's in trouble. Did he manipulate the markets as part of this theft? It doesn't matter - it's a separate offense. He can be tried for that too. Did he get agreements not to prosecute from his victims by paying back half of what he stole? It seems so. Is this enforcable? My non-lawyer opinion is that it is not, on several grounds (and that the remedy would be that the victims have to re-return the stolen money - not a good position for Eisenberg).

The fact that "the code let me do it" is irrelevant in both cases.
 
  • #969
Bitcoin's once-every-four-years "halving," which took place late last week, was supposed to bring a steep cut in revenue for crypto miners, since their rewards for new data blocks would drop by 50%.

Instead, the simultaneous launch of Casey Rodarmor's new Runes protocol – for minting digital tokens on top of the oldest and largest blockchain – has proven so popular that it's caused massive network congestion, sending transaction fees to record levels and showering Bitcoin miners with a windfall like never before.
https://news.yahoo.com/finance/news/bitcoin-miners-reap-windfall-runes-201843783.html

https://www.coindesk.com/markets/20...ng-fees-soaring-as-users-rush-to-mint-tokens/


Meanwhile, Sam Bankman-Fried Agrees to Help FTX Investors Go After Celeb Promoters
https://www.coindesk.com/policy/202...-help-ftx-investors-go-after-celeb-promoters/
Sam Bankman-Fried has inked a settlement agreement with a group of FTX customers who have agreed to drop their class action lawsuit against him in exchange for his help going after celebrity promoters of the collapsed exchange.
The agreement, filed in a Miami court on Friday, has not yet been approved by a judge. If approved, the settlement would release Bankman-Fried from both current and future civil liability tied to the collapse of FTX.
 
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  • #970
https://www.cnbc.com/2024/04/30/bin...o-cz-sentenced-to-four-months-in-prison-.html
Binance founder Changpeng Zhao sentenced to 4 months in prison after plea deal
The U.S. ordered Binance to pay $4.3 billion in fines and forfeiture. Zhao agreed to pay a $50 million fine.

Binance has separately been sued by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission over the alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the U.S.
 
  • #971
Four months? He barely has time to get settled.

Zhao practically fell over himself trying to cooperate, and I presume the Feds wanted to showcase the difference in outcomes if you cooperate and if you don't. My understanding of the federal system is that you spend the last six months typically in a halfway house.

And people still argue "No, crypto is not shady at all!"
 
  • #972
Vanadium 50 said:
Zhao practically fell over himself trying to cooperate, and I presume the Feds wanted to showcase the difference in outcomes if you cooperate and if you don't.

The prosecution asked for 3 years so I'm skeptical of this interpretation. I assume the bigger element is that he could afford to pay the massive fine, or just generic judges don't like sending rich people to prison syndrome.

Either way the thing he's charged with is pretty different from what most crypto crimes are accused
 
  • #973
nsaspook said:
https://www.cnbc.com/2024/04/30/bin...o-cz-sentenced-to-four-months-in-prison-.html
Binance founder Changpeng Zhao sentenced to 4 months in prison after plea deal
How ridiculous it looks, 4 months in prison. For him, it is just an official vacation
+ yeah crypto is not shady at all:D
Vanadium 50 said:
Four months? He barely has time to get settled.

Zhao practically fell over himself trying to cooperate, and I presume the Feds wanted to showcase the difference in outcomes if you cooperate and if you don't. My understanding of the federal system is that you spend the last six months typically in a halfway house.

And people still argue "No, crypto is not shady at all!"
 
  • #974
https://www.coindesk.com/policy/202...xey-pertsev-found-guilty-of-money-laundering/

Tornado Cash Developer Alexey Pertsev Sentenced to 64 Months in Prison by Dutch Court​

Alexey Pertsev was first jailed in the Netherlands in August 2022.​

The 31-year old Russian was escorted after the session by police to the cells under the court. This is where he will remain until the public prosecutor finds a prison in the Netherlands that is appropriate for his crimes.
“Tornado Cash does not pose any barrier for people with criminal assets who want to launder them,” according to the translated verdict seen by CoinDesk. “That is why the court regards the defendant guilty of the money laundering activities as charged.”
 
  • #975
US brothers arrested for stealing $25m in crypto in just 12 seconds [inside the article it points out that this took months of study and planning, so the 12 seconds is just sensationalism, but still ...]

"The defendants' scheme calls the very integrity of the blockchain into question," US Attorney Damian Williams said in a statement on Wednesday, referring to the public ledger that records crypto payments.

https://www.bbc.com/news/world-us-canada-69018575
 
  • #976
https://www.reuters.com/technology/...ypto-investors-panic-bitcoin-boom-2024-05-15/

Wallet recovery firms buzz as locked-out crypto investors panic in bitcoin boom​

Recovery services provided by firms do not come cheap. ReWallet and WRS charge a 20% fee on the wallets' contents, with the caveat being they get paid only upon retrieval.
INVESTORS' WALLET RECOVERY ATTEMPTS
"I was simply worried that I would no longer have access (to my wallet) and thus lose my bitcoins forever," said an investor living in Germany, who declined to be named. "Of course, the high bitcoin price was an incentive to finally tackle this."
Another Switzerland-based investor, who also requested anonymity, said, "I had secured the wallet with passphrases and couldn't remember it. I tried again and again and created various lists with possible alternatives, but unfortunately without success."
 
  • #977
https://www.justice.gov/usao-sdny/pr/former-ftx-executive-ryan-salame-sentenced-90-months-prison

Former FTX Executive Ryan Salame Sentenced To 90 Months In Prison​


Damian Williams, the United States Attorney for the Southern District of New York, announced that RYAN SALAME was sentenced today to 90 months in prison. SALAME previously pled guilty to conspiracy to make unlawful political contributions and defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business before U.S. District Judge Lewis A. Kaplan, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law. Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system. Today’s sentence underscores the substantial consequences for such offenses.”
 
  • #978
The prosecution asked for 5-7 years. Do we know why the jidhe gave him more?
 
  • #979
Vanadium 50 said:
The prosecution asked for 5-7 years. Do we know why the jidhe gave him more?
As an incentive to rat maybe.
https://www.ussc.gov/sites/default/...ations/research-publications/2016/Rule35b.pdf
Offenders may also receive credit for substantial assistance
after they have been sentenced. Federal Rule of Criminal Procedure
35(b) permits a court, upon the government’s motion, to impose a
new, reduced sentence that takes into account post-sentencing
substantial assistance, and that new sentence may go below the
recommended guideline range and any statutory mandatory
minimum penalty. These Rule 35(b) reductions are, in most respects,
identical to §5K1.1 departures, as both require substantial assistance
and both require a government motion. The only significant
difference between the two types of motions is timing: Rule 35(b)
motions are made after the original sentencing and so require a
resentencing if granted, and §5K1.1 motions are made before
sentencing and are granted at the time of the original sentencing.
 
  • #980
Usually if one provides testimony against one's partners...i.e. "to rat", they get shorter sentences, not longer.

Usually the defense asks for a low number, the prosecution asks for a high number, and the judge picks something in that range. Its rare that they go outside it.
 
  • #981
Vanadium 50 said:
Usually if one provides testimony against one's partners...i.e. "to rat", they get shorter sentences, not longer.

Usually the defense asks for a low number, the prosecution asks for a high number, and the judge picks something in that range. Its rare that they go outside it.
It can happen after the fact of initial sentencing (Federal Rule of Criminal Procedure 35(b)) so they get to think about being a "rat" to make that that long jail sentence become a shorter one.
 
  • #983
So whatever happened to the FTX executives who pled guilty? What is holding up their sentencing?
 
  • #986
morrobay said:
How worrisome is this for the US dollar?
How worrisome is what? The national debt? Depends on who you ask. It is a fact that the dollar is worth less than it used to be relative to goods and services (this is just saying there has been inflation) and it is true that servicing the debt is expensive (one-sixth of the federal budget last I checked). How troublesome this is depends on your personal financial situation and your politics.

If BTC were an actual asset, and treated as a stock, the effect on the economy if it were zeroed out completely would be about the same as Monday's bad day at the stock market. Those companies actually make things: McDonalds still makes hamburgers, Exxon still makes gasoline, and Boeing still makes mistakes...er...airplanes. Bitcoin doesn't make anything, so zeroing it out would likely have a smaller effect than Monday at the market.

A Chicago-school economist might argue that this would help the economy: if you can't sit on you butt and get rich off Bitcoin, you need to produce goods and services that other people want.
 
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  • #987
My personal financial situation is based on the exchange rate: Thai baht/ $ . I have direct deposits from federal service in to Citibank. Then I just go to ATM and withdrawal Thai baht. Otherwise I would not be that worried. So rather a different situation for those overseas.
 
  • #988
I can fairly well say with certainty that neither the US Treasury Department nor the vast majority of BTC speculators are asking themselves "yes, but what will this do to the USD/THB exchange rate".
 
  • #989
Ok can I ask you what this will do to the exchange rate? That is USD/All others
 
  • #990
What will what do? A putative zeroing out of BTC? After Monday's stock market loss (post hoc ergo propter hoc) the USD relative to the rest of the XDR basket of currencies fell about ¼%. For the reasons I have above, I would consider this an upper bound.

BTC is just a pimple on the overall economy.
 
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