NY Attorney General sues crypto trader NovaTech, claims $1B fraud

Two people took in $1 billion in crypto deposits and traded $26 million of it, the suit alleges.

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Texas Regulator Halts Alleged Crypto Cloud Mining Scheme

The Texas State Securities Board has taken action againstArkbit Capital, issuing a cease and desist order for its involvement in allegedfraudulent crypto cloud mining activities. Led by Financial Examiner AlexisCantrell, the board's investigation revealed purported deceptive practices byArkbit Capital and its associated entities.

Allegations of Deceptive Practices

Among the accusations, Arkbit Capital stands accused ofemploying deceptive image and video manipulation tactics to promote itsinvestment offerings. The company, along with its affiliates Arkbit CapitalHoldings, ABC Holdings LLC, and ABC Mining, allegedly misrepresented itsoperations, claiming to run Arkansas-based data centres for cryptocurrencycloud mining.

Investors were enticed with promises of significant dailyreturns ranging from 1.6% to 2.8% over a 120-day period on digital assetdeposits within a specific range. However, the board's order asserts that thesepromises were unfounded.

Furthermore, Arkbit Capital purportedly usedCoinPayments.Net, a payment processor, to handle transactions for itsinvestment plans, despite restrictions barring users from certainjurisdictions, including the United States. It was discovered that the accountholder linked to Arkbit's CoinPayments account was Paras Khivesara, located inHyderabad, India, rather than in Arkansas as claimed.

Additionally, the board highlighted instances of manipulatedmedia, including a video purportedly featuring the company's CEO and founderspeaking at a cryptocurrency conference in Austin, Texas. However, no evidencewas found to support the presence of Delmar Estabrook or Arkbit Capital at thesaid event.

Texas regulator orders Arkbit Capital to cease operations for alleged crypto scamThe Texas State Securities Board has issued a cease and desist order against crypto miner Arkbit Capital for engaging in fraudulent crypto cloud mining activities, Cointelegraph reported. The

Official Highlights Risks

In response to these findings, Joe Rotunda, Director of theEnforcement Division at the Texas State Securities Board, emphasized theimportance of vigilance when encountering social media investmentopportunities.

This is a common tactic we see in online crypto investmentscams. By appearing to be part of the cryptocurrency industry, bad actorsattempt to seem like legitimate contributors to the space. Dont be fooled,said Rotunda.

This incident adds to a series of Ponzi scheme casesinvolving cryptocurrency that have surfaced in the United States over the pastyear, reflecting challenges within the digital asset investment landscape.

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Arkbit crypto mining MLM fraud busted by Texas regulators

Arkbit falsely claimed to operate Arkansas-based data centers for cloud mining various cryptocurrencies.

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Australian Man Pleads Guilty to $3.6B Crypto Ponzi Scheme, Faces Sentencing in July

John Bigatton, a Sydney man, has admitte­d guilt to promoting a cryptocurrency Ponzi scheme that swindle­d investors out of a staggering $3.6 billion. Bigatton, from Carss Park in New South Wale­s, pleaded guilty in Sydney District Court to acting as an unlice­nsed financial advisor while spruiking BitConnect’s Le­nding Platform in late 2017 and early 2018. […]

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The Bitcoin Ponzi Scheme Paradox

Detractors claim Bitcoin to be a Ponzi scheme. A history of such schemes shows this to be untrue. Yet, paradoxically, Bitcoin is being used to perpetuate the largest Ponzi scheme in history. The second report in the "FUD Fighters" series powered by HIVE Digital Technologies LTD.

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SafeMoon LP Compromised

SafeMoon, a cryptocurrency project endorsed by celebrities, announced its liquidity pool was attacked, but gave no further details. Experts suggest a recent software upgrade may be to blame for the vulnerability that allowed an attacker to remove SafeMoon tokens and sell them at an inflated price. (Read More)

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Robert Kiyosaki Sees Bitcoin as Perfect Asset at the Right Time Calls US Dollar Giant Ponzi Scheme

Rich Dad Poor Dad author Robert Kiyosaki has answered multiple questions about bitcoin and the U.S. dollar. Declaring that he is a bitcoin bull, the famous author said the cryptocurrency “is the perfect asset at the right time.” While acknowledging the possibility of bitcoin “going to zero,” he countered by suggesting that fiat currencies like [...]

The post Robert Kiyosaki Sees Bitcoin as Perfect Asset at the Right Time Calls US Dollar Giant Ponzi Scheme appeared first on Crypto Breaking News.

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Crypto Ponzi Schemes vs. Legit Investments: How to Spot and Avoid Cryptocurrency Scams

Learn how to identify crypto Ponzi schemes and avoid cryptocurrency scams. Discover red flags, common fraud tactics, and key signs of legitimate investments.

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A $300M Ponzi Scheme That Targeted Latinos Falsely Claimed to Buy Crypto, SEC Says

The U.S. Securities and Exchange Commission sued 17 individuals tied to an alleged Ponzi scheme that took in $300 million from over 40,000 victims.Source: CoinDesk

The post A $300M Ponzi Scheme That Targeted Latinos Falsely Claimed to Buy Crypto, SEC Says appeared first on Crypto Breaking News.

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Jake Paul-endorsed SafeMoon gets hacked after introducing a bug in upgrade

SafeMoon, a project previously endorsed by A-list celebrities and social influencers such as Jake Paul and Soulja Boy, announced its liquidity pool (LP) was compromised. Without revealing further details about the attack, SafeMoon confirmed undertaking steps “to resolve the issue as soon as possible.” Just like many other crypto projects in 2021, SafeMoon was backed [...]

The post Jake Paul-endorsed SafeMoon gets hacked after introducing a bug in upgrade appeared first on Crypto Breaking News.

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Lawyer Seeks Reopening of Onecoin Case in Bulgaria, Seizure of Assets

A lawyer representing Onecoin victims has urged Bulgarian authorities to reopen an investigation into the crypto pyramid scheme and seize assets to compensate his clients. The attorney is asking officials in Sofia to take into account developments he considers related to the case, including the recent murder of a Bulgarian crime figure in South Africa. [...]

The post Lawyer Seeks Reopening of Onecoin Case in Bulgaria, Seizure of Assets appeared first on Crypto Breaking News.

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Onecoin Head of Legal and Compliance Charged for Role in Crypto Pyramid

Authorities in the U.S. have announced charges against a former Onecoin executive for her alleged role in the notorious crypto pyramid scheme. Bulgarian national Irina Dilkinska, who was extradited on Monday, may face up to four decades in prison if found guilty on counts of fraud and money laundering. Bulgarian Woman Handed Over to US [...]

The post Onecoin Head of Legal and Compliance Charged for Role in Crypto Pyramid appeared first on Crypto Breaking News.

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SEC Busts BKCoin for Running $100M 'Ponzi-Like Scheme'

<p>The US <a href="https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/" class="terms__main-term" id="3718b4df-fc5f-479a-861e-f52759439c15" target="_blank">Securities and Exchange Commission (SEC</a>) has received emergency relief from a Florida court to freeze and appoint a receiver of the assets of BKCoin and its Co-Founder, Kevin Kang. Announced on Monday, the Miami-based <a href="https://www.financemagnates.com/cryptocurrency/uk-sends-a-gang-of-four-to-prison-for-21m-crypto-fraud/" target="_blank" rel="follow">crypto hedge fund defrauded</a> at least 55 investors after raising $100 million.</p><p>Both BKCoin and Kang have allegedly violated the antifraud provisions of the federal securities laws.</p><p>The SEC Takes Action against BKCoin </p><p>The US securities market regulator filed a sealed complaint against BKCoin and Kang on 23 February, which was sealed until Monday. The complaint alleged that Kang and his company assured investors their money would be invested in <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/" class="terms__secondary-term" id="b091101e-6e02-4b36-aa0e-7c972dfdd6ed" target="_blank">cryptocurrencies</a>. In addition. the company guaranteed returns through separately managed accounts and five private funds.</p><p>However, in reality, commingled investor assets disregarding the fund's structure used more than $3.8 million for making <a href="https://www.financemagnates.com/forex/cftc-busts-145m-fx-ponzi-schemes-charges-masterminds/" target="_blank" rel="follow">Ponzi-like payments</a>. Fraudsters use the proceeds from the new investors to pay off old ones in Ponzi schemes.</p><p>Moreover, the regulatory complaint alleged that Kang misappropriated at least $371,000 of investor money for personal use, including paying for vacations, purchasing sporting event tickets, and even buying a New York apartment. Further, one of the affiliates, Bison Digital LLC, received around $12 million from BKCoin.</p><p>The hedge fund even provided altered documents with inflated bank account balances to the third-party administrator of certain funds to conceal its fraudulent activities. In addition, it falsely informed clients about the audit by a big-four audit firm. However, in reality, none of its books were audited at the time.</p><p>Recovery In Process</p><p>The SEC is now seeking to recover the BKCoin investors' proceeds and penalties from the company and its co-founder. It is also seeking a permanent injunction against BKCoin and Kang. </p><p>"As we allege, investors entrusted their money to the defendants to trade in crypto assets. Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct," said the Director of the SEC's Miami Regional Office, Eric Bustillo.</p><p>"This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena."</p><p>Recently, the SEC took action against several major crypto fraudsters. In January, the regulator brought charges against Neil Chandran for creating and <a href="https://www.financemagnates.com/cryptocurrency/news/us-sec-charges-individuals-behind-45m-blockchain-fraud-coindeal/" target="_blank" rel="follow">running CoinDeal</a>, a fraudulent investment scheme that raised $45 million by selling unregistered securities. It also charged algorithmic stablecoin issuer <a href="https://www.financemagnates.com/cryptocurrency/sec-charges-terraform-labs-and-ceo-do-kwon-for-securities-fraud/" target="_blank" rel="follow">Terraform Labs and its CEO, Do Kwon</a>, for running a "multi-billion dollar crypto asset securities fraud." Kwon is currently at large and wanted in South Korea.</p> This article was written by Arnab Shome at www.financemagnates.com.

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Forsage Founders Indicted for Alleged $340 Million "Global Ponzi" Scheme on Ethereum Blockchain

Oregon's federal grand jury indicted Forsage's founders. "Global Ponzi and pyramid scam" investors lost $340 million on the site. (Read More)

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Forsage Platform Founders Indicted in $340 Million Ponzi Scheme

The founders of a DeFi crypto investment platform, Forsage, have been indicted by the federal grand jury in the District of Oregon for running a [...]

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US Indicts Four Co-Founders of $340M Forsage Ponzi Scheme

<p>The United States authorities have charged four co-founders of the cryptocurrency <a href="https://www.financemagnates.com/terms/p/ponzi-scheme/" class="terms__main-term" id="43e13ed7-9295-4761-824f-9d9c98eb15a5" target="_blank">Ponzi scheme</a> Forsage, which raised around $340 million by running the decentralized finance (DeFi) investment platform.</p><p>Forsage C-Founders Face Charges</p><p>Announced on Wednesday, the indictment brought by a federal grand jury in the District of Oregon named four Russian nationals: Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov. They promoted Forsage as a legitimate system with “low-risk and lucrative investment opportunity” on social media, but in reality, it was a <a href="https://www.financemagnates.com/cryptocurrency/uk-sends-a-gang-of-four-to-prison-for-21m-crypto-fraud/" target="_blank" rel="follow">fraudulent scheme</a>.</p><p>They were charged with conspiracy to commit wire fraud, which contains a maximum prison sentence of 20 years.</p><p>The court documents detailed that the four defendants coded and deployed smart contracts with malicious codes that systemized the process of transferring the funds deposited by new investors to the existing ones, making it a classic Ponzi scheme. They even combined the Pyramid scheme on three blockchains: <a href="https://www.financemagnates.com/terms/e/ethereum/" class="terms__secondary-term" id="230aa7bc-daf7-4523-af41-90671a2e79de" target="_blank">Ethereum</a>, Binance Smart Chain, and Tron.</p><p>“While advancements in the virtual asset ecosystem bring new opportunities to investors, criminals are also finding new ways to orchestrate illicit schemes,” said Luis Quesada, the Assistant Director of the FBI’s Criminal Investigative Division.</p><p>Blockchain analysts confirmed that over 80 percent of Forsage investors received less Ethereum than they invested in the scheme, while over 50 percent never received a single payout. Further, at least one account on the Ethereum smart contract controlled by the scheme founders siphoned investors’ funds out of the Forsage investment network.</p><p>Several Agencies Bust the Forsage Scheme</p><p>The latest indictment came after the US <a href="https://www.financemagnates.com/cryptocurrency/us-sec-charges-4-co-founders-7-others-in-cross-country-300m-crypto-scheme/" target="_blank" rel="follow">Securities and Exchange Commission (SEC) charged 11 individuals</a> connected to the Forsage scheme, including the four co-founders named in the latest lawsuit, for running the fraudulent Ponzi scheme.</p><p>Forsage operated for more than two years and even paid members to recruit others into the scheme. The scheme faced its <a href="https://www.financemagnates.com/cryptocurrency/news/philippines-sec-calls-forsage-a-pyramid-scheme-warns-investors/" target="_blank" rel="follow">first cease-and-desist order</a> in July 2020 by the securities market regulator in the Philippines, which labeled it as a Ponzi scheme. The <a href="https://www.financemagnates.com/cryptocurrency/news/us-state-issues-cease-and-desist-order-against-dapp-forsage/" target="_blank" rel="follow">US State of Montana also issued a cease-and-desist order</a> against the scheme in 2021, but Forsage founders kept denying the charges on YouTube videos.</p><p>“Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies,” said US Attorney Natalie Wight for the District of Oregon.</p><p>Regulators around the world are busting Ponzi and other fraudulent schemes that are defrauding investors. Recently, the former director of a <a href="https://www.financemagnates.com/forex/another-director-of-180m-fx-ponzi-scheme-faces-10-years-in-jail/" target="_blank" rel="follow">$180 million FX Ponzi scheme Courtenay House </a>is facing jail time of up to 10 years in Australia after a guilty plea, along with a heavy monetary penalty.</p> This article was written by Arnab Shome at www.financemagnates.com.

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EminiFX CEO Pleads Guilty to $248M Ponzi Scheme

EminiFX CEO changed his plea to guilty and could face up to ten years in prison for involvement in scam.

Continue reading at DailyCoin.

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Elizabeth Warren Wants SEC to Double Down on Crypto Enforcement

Warren wants the SEC to "double down" on crypto enforcement. The U.S. senator said that the previous SEC administration "basically gave the green light" to a cryptocurrency market "full with trash tokens". (Read More)

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US Court Orders $17M Restitution Distribution to 800 BitConnect Victims

<p>The wait for some of the victims of the crypto <a href="https://www.financemagnates.com/terms/p/ponzi-scheme/" target="_blank" id="43e13ed7-9295-4761-824f-9d9c98eb15a5_1" class="terms__main-term">Ponzi scheme</a> BitConnect looks to be over, as a San Diego federal district court on Thursday ordered the distribution of over $17 million in restitution. The proceeds will be distributed among 800 Bitconnect victims across over 40 countries.</p><p>Some BItConnect Investors to Receive Restitution</p><p>However, the restitution will cover only a fraction of the Bitcoinnect victims, as the scheme defrauded around 4,000 investors from 95 countries. It was one of the <a href="https://www.financemagnates.com/cryptocurrency/news/sec-settles-charges-against-three-bitconnect-promoters/" target="_blank" rel="follow">largest cryptocurrency Ponzi schemes</a> that swindled about $2.4 billion from investors riding the craze of the crypto market in 2017. The scheme was launched in 2016 and collapsed in 2018.</p><p>A viral video from a promotional event of BitConnect.</p><p>BitConnect Was a Classic Ponzi Scheme</p><p>The Department of Justice elaborated that the promoters of BitConnect fraudulently marketed its <a href="https://www.financemagnates.com/terms/i/initial-coin-offering-ico/" target="_blank" id="86e11299-89d2-4c19-86f6-8bafb301e8c6_1" class="terms__secondary-term">initial coin offering (ICO</a>) and digital currency exchange as a lucrative investment. They even <a href="https://www.financemagnates.com/cryptocurrency/news/something-not-right-bitconnect/" target="_blank" rel="follow">mislead investors</a> with BitConnect’s lending program, claiming to use proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” to generate “substantial profits and guaranteed returns.”</p><p>The scheme promised investors to return 1 percent daily compounded interest in investments that make an annual return of 3,700 percent.</p><p>However, BitConnect operated a classic Ponzi scheme: the promoters paid earlier investors with proceeds brought in from newer investors. Additionally, the operators of the fraudulent scheme endured keeping 15 percent of the incoming customers’ investments into a slush fund for its owners and promoters.</p><p>The court order for restitution came with the guilty plea of BitConnect’s US-based promoter, <a href="https://www.financemagnates.com/cryptocurrency/news/sec-obtains-judgment-against-lead-us-bitconnect-promoter/" target="_blank" rel="follow">Glenn Arcaro</a>, for conspiracy to commit wire fraud. Last October, he was sentenced to 38 months in prison and was ordered to pay $24 million to BitConnect victims. Furthermore, the US prosecutors <a href="https://www.financemagnates.com/cryptocurrency/news/federal-grand-jury-in-san-diego-indicts-bitconnects-founder/" target="_blank" rel="follow">indicted Satish Kumbhani</a>, the Founder of BitConnect, last year for his role in the massive fraud. However, his whereabouts are unknown. On top of that, he is facing a police investigation in India.</p> This article was written by Arnab Shome at www.financemagnates.com.

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$4B OneCoin scam co-founder pleads guilty, faces 60 years jail

The co-founder of the fraudulent scheme is set to be sentenced in April 2023 on charges relating to wire fraud and money laundering.

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