Tag: Crypto Scam

Ronaldinho’s Crypto Scam: A Deep Dive into the $61 Million Controversy

by Blockchain News

The cryptocurrency landscape in Brazil is currently overshadowed by a high-profile investigation involving football icon Ronaldinho Gaúcho. The former Paris Saint-Germain, F.C Barcelona, and AC Milan player is facing legal scrutiny over his alleged ties to a cryptocurrency scam, casting a shadow on celebrity endorsements in the volatile crypto market.

At the heart of the matter is Ronaldinho’s venture, ’18kRonaldinho’. The company is under the lens for promising clients daily returns of over 2% through cryptocurrency investments. A significant lawsuit, intertwined with a broader probe into crypto frauds in Brazil, is seeking damages exceeding $61 million, citing the company’s failure to deliver on its promises.

The intrigue deepened when Ronaldinho missed a congressional hearing on August 24, marking his second such absence. While “adverse weather conditions” were cited as the reason, the missed appearance has only intensified the legal spotlight on him. Congressman Aureo Ribeiro has indicated that another opportunity for testimony has been set for August 31. If Ronaldinho remains absent, the situation could escalate with potential law enforcement intervention.

In a twist to the narrative, Ronaldinho’s legal representatives have positioned him as merely an “ambassador” for ’18kRonaldinho’. They argue that his image and name were leveraged without proper consent, painting him as another victim of the alleged scam rather than a perpetrator.

Further complicating the situation is Ronaldinho’s brother, Roberto de Assis, who attended a recent hearing. Assis conveyed that Ronaldinho has been actively cooperating with ongoing investigations and has previously provided clarifications to Brazil’s Public Ministry. However, lawmakers are insistent on hearing directly from Ronaldinho.

This isn’t the first time Ronaldinho has been embroiled in legal controversies. A 2020 incident saw him and his brother arrested in Paraguay over counterfeit passports, resulting in a 170-day jail term. The current crypto investigation, with Assis’s involvement, adds another layer to the unfolding story.

As the events continue to unfold, they underscore the potential pitfalls of celebrity endorsements in the crypto sector. Both the football and crypto communities are keenly awaiting further developments, seeking clarity on Ronaldinho’s involvement and the broader implications for the crypto industry.

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Investment Fraudsters Sentenced to Over Six Years for Telecoin Crypto Scam

by Blockchain News

According to City of London Police Website, two individuals, Ross Jay, 33, and Michael Freckleton, 37, have been sentenced to six years and three months and six years and six months in prison, respectively, for their roles in a fraudulent crypto scheme. The sentencing took place at Southwark Crown Court following a five-week-long trial.

The duo was found guilty of conspiracy to defraud, orchestrating a scam revolving around a fictitious crypto called “Telecoin.” Operating under the company name Digi Ex, they targeted potential investors through cold-calling, convincing them to invest in non-existent digital assets.

Between 2015 and 2017, a total of £509,599 was deposited into Digi Ex accounts, with £409,493 traced back as payments from investors. The scam exploited the allure of the emerging cryptocurrency market, deceiving victims, and siphoning their money without providing any credible investment services.

Jay and Freckleton paid themselves salaries amounting to over £139,000 from investors’ money and withdrew an additional £145,000 in cash from the Digi Ex business account. They even set up a shell company under the name “Telecoin” to cover their tracks, but no money was ever used to acquire the promised crypto.

Detective Chief Inspector Lee Parish, from the Fraud Operations team at City of London Police, emphasized the risks of investing in emerging and potentially unstable currencies. He urged potential investors to conduct thorough research and consult with accredited financial advisors or invest with FCA registered companies.

The sentencing of Jay and Freckleton serves as a stark reminder of the risks associated with crypto investments, particularly in unregulated or fictitious assets.

The case highlights the importance of due diligence and the need for investors to be cautious and well-informed. The City of London Police’s successful pursuit of justice in “Operation Curry” sends a strong message against investment fraud and the exploitation of the cryptocurrency market.

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Latvian National Extradited to the U.S for Crypto and Wire Fraud

by Blockchain News

Ivars Auzins, a Latvian citizen, accused of committing securities and wire fraud using eight companies that were alleged to mine or invest in crypto assets, was extradited to the United States to face a six-count indictment charge.

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Breon Peace, the United States Attorney for the Eastern District of New York, pointed out:

“Auzins perpetrated a brazen scheme in which he fleeced investors who funneled millions of dollars into fraudulent cryptocurrency.”

He added:

“This office will continue to vigorously investigate and prosecute those who lie and steal from investors, including those like the defendant who operate from abroad.” 

The indictment noted that Auzins concealed his identity through aliases. As a result, he operated “Auzins Entities,” which advertised crypto mining and investments through websites, social media, and email campaigns. Per the announcement:

“Some of the Auzins Entities – Denaro and Bitroad Limited – purported to raise funds from investors through initial coin offerings (ICOs).  Other Auzins Entities purported to be cryptocurrency investment platforms that provided investors with different investment plans and profit rates.”

The Auzins Entities were able to siphon more than $7 million in crypto assets from investors in the U.S. and other places. This happened between November 2017 and July 2019, and soon after, the Auzins Entities went underground. 

 

Meanwhile, a recent report by blockchain analytic firm Chainalysis pointed out that crypto scams had nosedived by 65% in 2022. 

 

The drop in scam revenue was linked to Bitcoin’s bearish momentum, which has seen the leading cryptocurrency decline by at least 70% from its all-time high (ATH) price of $69K recorded in November last year. 

 

The Chainalysis report highlighted that people falling for crypto scams had declined. 

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Percentage of Crypto Transaction Volume Used for Crime is Reducing: CipherTrace

by Blockchain News

The growth of the broader cryptocurrency ecosystem is not reflected in the percentage of crypto transaction volumes being used for illicit or fraudulent criminal activities.

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This fact was corroborated by blockchain security firm, CipherTrace in a recently published survey report.

According to the CipherTrace data, the nascent digital currency ecosystem recorded a 1,456% growth from January 2019 when the industry was valued at $135 billion to March 2022 when it was pegged at $2.1 trillion. In between, the industry attained an all-time high in terms of its combined market cap which almost topped $3 trillion.

 

Amidst this growth, the rate at which scammers utilized crypto as a tool for their activities notably declined from 0.62 – 0.65% in 2020 to 0.1 – 0.15% in 2021. This comes on the back of a total of $590 million paid as payment to ransomware attackers in 2021, a figure that stands at 42% above the figure recorded within the same time frame in 2020.

 

The insight from CipherTrace also revealed that there is a gradual shift in the modalities being employed by cybercriminals. The security outfit said its data showed that illicit activities are now gradually moving into the decentralized finance (DeFi) space as well as into mixing services and digital collectables or non-fungible tokens (NFTs).

 

This year alone has seen a lot of attacks on DeFi protocols, one of which is the $625 million breach of the Ronin Bridge, Axie Infinity’s main bridge. The Lazarus Group from North Korea was linked to this crime by US authorities and Blender, a privacy mixing tool was indicted as being used by the hackers to launder the proceeds of the hack. 

 

This corroborates CipherTrace’s observation that mixing services are now being featured in criminal activities. In stemming the activities of Blender.io, the US Treasury Department has placed a sanction on the protocol.

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Buyer Beware: Crypto Scammers Raked In $14 Billion In 2021

by NEWSBTC

According to blockchain research firm Chainalysis, scam involving crypto reached an all-time high of $14 billion last year, a record that comes as regulators demand for more power over the fast-growing sector.

Growing Interest In Crypto Fueled Most Scams

Cryptocurrency crime set a new high in 2021, according to a recent analysis, with scammers stealing $14 billion worth of cryptocurrency.

According to the “2022 Crypto Crime Report” released by blockchain data firm Chainalysis on Thursday, Jan. 6, that’s nearly double the $7.8 billion stolen by fraudsters in 2020.

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The findings come amid heated debates over how to regulate cryptocurrency, with regulators keen to protect the growing class of small investors who are flocking to digital currencies.

With the recent surge in cryptocurrency interest, it’s no surprise that “Olympic-level scammers” have seen new chances for illegal conduct, according to William E. Quigley, a notable investor and co-founder of the WAX blockchain. Quigley stated during a panel discussion held by blockchain firm Light Node Media last month that the high-tech aspect of crypto will continue to attract clever crooks.

Consider the recent “Squid Game” scam, in which investors claim that a new SQUID cryptocurrency token and associated immersive online game were nothing more than a con. According to investors, the creators vanished when the currency’s value soared and they seemed to pay out with more than $3 million.

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“By absolute numbers, crime is still growing but the ecosystem is becoming safer. Of course, there [are] a lot of caveats to that,” said Kim Grauer, Chainalysis’ director of research.

Related article | Knowledge is Power: How To Stay Protected From Crypto Scams

Newcomers have been lured in by the promise of quick returns claimed by crypto proponents, as well as the notion that bitcoin may be used to hedge against rising inflation. Despite this, cryptocurrencies are still subject to inconsistent regulation, leaving investors vulnerable to fraud.

The majority of criminal earnings has always come from financial scams, according to the firm’s findings during the last five years. However, as bitcoin has grown at a breakneck pace, overall economic activity across all blockchains has increased from $2.3 trillion to $15.8 trillion, diminishing the importance of criminal activities.

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BTC/USD continues to nosedive. Source: TradingView

DeFi Transactions Had A Lot Of Scam

According to Chainalysis data, DeFi transactions increased by 912% in 2021. Decentralized tokens like shiba inu have had impressive gains, which has fueled a feeding frenzy among DeFi tokens.

When it comes to dealing in this immature crypto economy, however, there are a number of red signs.

According to Kim Grauer, Chainalysis’ head of research, one issue with DeFi is that many of the new protocols being introduced have coding weaknesses that hackers can exploit. In 2021, these code exploits were used in 21% of all hacking attempts.

Related Article | Dangers of DeFi Hype Surface Following One-Hour Crypto Scam

In 2021, criminals stole $3.2 billion in cryptocurrencies, with DeFi protocol hacks or exploits accounting for 72%.

SEC Chair Gary Gensler told Yahoo Finance in October that DeFi “will end badly” unless investor protections are strengthened.

The Commodities and Futures Trading Commission fined DeFi protocol Poly Market $1.4 million earlier this week for operating a “unregistered binary options market,” and ordered the protocol to “wind down” its operations.

Featured image from Unsplash, Charts from TradingView.com

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Department of Justice To Sell $56,000,000 in Crypto Assets Seized From BitConnect Fraud Scheme

by Dailyhodl

The U.S. Department of Justice (DOJ) is selling confiscated proceeds from the BitConnect high-yield investment program, the biggest crypto fraud scheme to be criminally charged in the United States.

According to a press release published on Tuesday, U.S. District Judge Todd W. Robinson just approved the request of the DOJ and the U.S. Attorney’s Office for the Southern District of California to liquidate $56 million worth of cryptocurrency seized from Glenn Arcaro, the top promoter and director of the Bitconnect high-yield investment program.

On September 1st, Arcaro pleaded guilty to the criminal charges filed against him. He admitted to misleading investors regarding BitConnect’s supposed proprietary technology for trading in order for them to invest in the program. Arcaro is due for sentencing on January 7th, 2022, and faces up to 20 years of jail time.

BitConnect defrauded investors for over $2 billion before it shut down in 2018. The proceeds of the sale will be used to compensate the victims.

“The government will maintain custody of the seized proceeds in cryptocurrency wallets and intends to use these funds to provide restitution to the victims pursuant to a future restitution order by the court at sentencing.”

The FBI and IRS criminal investigations are still ongoing. The DOJ encourages victims to identify themselves and submit a statement by visiting the U.S. Department of Justice webpage.

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Game over! Squid Game-inspired crypto scam collapses as price crashes from $2.8K to zero

by Cointelegraph

A cryptocurrency inspired by Netflix’s internationally hit TV show Squid Game scammed investors in what appears to be a $3.38-million “rug pull” scheme.

Dubbed SQUID, the cryptocurrency plunged to almost a fraction of a cent minutes after crossing over $2,850 at 09:35 UTC on Nov. 1. The deadly drop oed following a 75,000% bull run, showcasing a greater demand for SQUID among traders after its debut on Oct. 26.

At the core of the retail craze lay the popularity of Squid Game. The scammers promoted SQUID as a play-to-earn cryptocurrency inspired by the South Korean TV fictional show in which people put their lives at risk to play a series of children’s games for the opportunity to win 45.6 billion won (~$38.7 million).

The marketing ploy helped push SQUID prices from $0.01 on Oct. 26 to over $38 on Sunday. The cryptocurrency then jumped to $90 on Nov. 1, ushering in a massive pumping round that pushed its price further to over $2,850, only to crash all the way down to $0.002 minutes later.

SQUID price pump and dump. Source: CoinMarketCap

Red flags

In the days leading up to the massive crash, traders had complained that they could not sell their SQUID holdings in the only available market, a decentralized exchange called PancakeSwap. In their defense, SQUID founders said they had deployed an innovative “anti-dumping technology” that limits people from selling their tokens against lower demand.

“The more people join, the larger reward pool will be (sic),” the Squid Game white paper read, adding: 

“Developers will take 10% of the entry fee with the remaining 90% given to the winner.”

Major news network CNBC also published the Squid Game cryptocurrency founders’ claims without omissions, insofar that it called SQUID the “very own brand” of the Netflix show.

The Squid Game cryptocurrency founders also said they were affiliated with the Netflix show as its official token partner. They also claimed that they had entered a strategic partnership with CoinGecko, a crypto data provider. However, in an interview with Cointelegraph, CoinGecko co-founder Bobby Ong refuted the claims, saying:

“[SQUID] did not meet our listing criteria, hence it will not be listed on CoinGecko. It’s most likely a scam.”

CoinMarketCap, a rival of CoinGecko, listed SQUID on its platform but warned visitors about the cryptocurrency’s dubious nature in a notice that read:

“There is growing evidence that this project has rugged. Please do your own due diligence and exercise extreme caution. This project, while clearly inspired by the Netflix show of the same name, is NOT affiliated with the official IP.”

Related: YouTube channels hacked and rebranded for livestreaming crypto scams

Meanwhile, analysts also noted that the Squid Game token founders had no profiles on LinkedIn, with Twitterati Crypto Tyrion ruling SQUID as a “100% rug pull.”

It now appears like a “game over” scenario for the SQUID bag holders. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.