Bitcoin Era Scam: Colombian Police Issue Warning After President Appears to Endorse Bitcoin

Police in Colombia has issued a warning about a fraudulent bitcoin investment opportunity. The scam targets social media users, convincing them that Colombian President Ivan Duque endorsed a bitcoin-related money making system.

The Spanish-language scam website “announces” the news, claiming that Duque approves the investment system and officially endorses bitcoin. It’s designed to look like a genuine news announcement.

According to the page, Duque not only endorses the scam: he claims the investment deal will relieve the economic crisis triggered by the coronavirus pandemic.

In a photo at the top of the scam page, Duque is handing a package to a guard. The image seems to suggest Duque is handing a package of coronavirus relief money to the guard.

The sales page adds that the investment opportunity signed by Duque is “the largest deal of the century for Colombia”:

“Colombian business magnate, philanthropist, investor, and president of Colombia, has signed the largest deal of the century for Colombia. Taking a big step towards technology, the government of Colombia approved this agreement, and that is what it has been working to change the economy and the monetary system of Colombia while the alert state for the virus lasts.”

The Bitcoin Era platform purportedly allows citizens of Colombia to start generating income via cryptocurrency. Using an “algorithm,” the website will “take money” from the world’s billionaires and distribute it among the rest:

“Based on these trade exchanges, the system operates automatically on its own to produce an 80% profit rate…Bitcoin Era is an algorithm designed to take money from the richest people in the world and redistribute it among the common people of Colombia. This algorithm literally outperforms the stock market with an accuracy of 80%, which means that you will win 8 out of 10 transactions.”

Because the scam has spread across Colombian social media, police were forced to issue a warning on September 2.

The Bitcoin Era Scam Investment Opportunity

Colombia Check quotes a statement from the Cybernetic Police Center describing how the scam works. The post explains a bitcoin investment opportunity related to a platform called Bitcoin Era. The company is preparing to launch the platform, and investors who send money to the company today can “generate incomes via cryptocurrencies” as the platform launches.

The Bitcoin Era sales page contains other apparent signs of a scam, including an interview with Bitcoin Era’s CEO “Diego Garcia,” who explains how the bitcoin investment system works. The interview was copied and pasted from a similar scam from 2019 called Crypto Genius.

Others have noticed that another photo on the page is a shot of YouTuber and voice actor Pete Acceturo. Another image labeled as “Jose Ruiz,” who is a Mexican student named Adan Cortes, who rose to fame after breaking into Malala Yousafzai’s Nobel Peace Prize ceremony.

To be clear, the president of Colombia has not endorsed Bitcoin Era or any other bitcoin investment opportunity.

We’ve seen scams like this across the crypto space. Scams take a famous person, claim that person has endorsed the scam, and promote the page across social media. We saw it earlier this year with British TV presenter and former X-Factor star Rylan Clark-Neal. They appeared to claim he made “millions from bitcoin” with a unique investment opportunity. The star was later forced to tweet a warning about the scam.

Other notable names used in bitcoin scams include Hugh Jackman, Gordon Ramsay, and Martin Lewis, all of which sued Facebook after scammers used their likenesses in a bitcoin hoax and spread the campaign across Facebook.

Bitcoin has become increasingly popular in Colombia over the past few years. Although it’s not as popular as in neighboring Venezuela, Colombia has dozens of crypto ATMs and several popular online crypto exchanges. Colombia has also built a legal framework for crypto businesses, including crypto exchanges seeking to operate legally in the country.

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Author: Andrew Tuts

Cisco Systems Warns Cryptojacking Botnet Mining Monero (XMR) Is Also Stealing User Data

Cisco Systems threat intelligence team has released a warning regarding a newly discovered Monero Mining crypto-jacking botnet called “Prometei.” The notice stated that the botnet not only mines Monero using targeted computer’s resources but also steals data from the system.

The warning revealed that the botnet has been active since May and relies on 15 executable modules to steal administrator passwords from the targeted systems. Once the malware gets access to the system, it steals all available data from the computer system.

Cisco Systems also revealed that the malware is very much active today and has infected thousands of systems. The malware is capable of containing up to 10,000 systems at any given point, which is evident from the high hash generating a frequency of 1M Hash/sec (million hashes per second).

Talking about how impactful the Monero mining botnet is, Vanja Svajcer, a researcher at Cisco Talos, revealed that the botnet generates revenue of around 1500 USD per month for its owners. While this may not seem profitable to many, the amount is ten times more than the average monthly salary in many countries. Apart from that, it also costs a significant amount of time for the computer owners whose system is used to mine Monero. Svajcer explained how the botnet is harmful:

“Stealing credentials is the most dangerous part of the Prometei botnet. You could consider the attacker with its bot being a burglar in your home. Naturally, the burglar searches all the drawers and finds various keys. They take keys with them and ask somebody else (another infected system) to check if any of the keys work on your car, safe deposit box, etc. When criminals break into a house, it opens up a whole new set of opportunities. It is very similar to this botnet.”

The intelligence researchers at Cisco also believe the creator of the botnet is somewhere in Eastern Europe. For a single individual, the amount generated by the botnet should be enough as extra pocket money.

Cryptojacking malware attacks have been one of the long-running nuisances without any permanent solutions along with ransomware attacks. While ransomware attacks are quite aggressive where the hacker directly demands a ransom, cryptojacking is kind of a passive attack where the target computer owner, in most cases, won’t even realize that their system has been compromised.

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Author: Hank Klinger

The Malaysian Securities Commission Warns Investors Against Using Crypto ATMs

The Malaysian Securities Commission (SC) has issued a warning against the use of crypto ATMs in the country. The warning stated that crypto ATMs come under Digital Asset Exchange (DAX) and thus require a clearance license from the security commission to operate in the country. Still, the SC says it has not issued any such operating license.

Crypto ATMs are commonly used to buy digital currencies using cash and debit/credit card, and their popularity has soared in the past couple of years. The same is true in Malaysia, and there are multiple crypto ATMs installed around the country.

The SC says interacting with these ATMs could lead to fraud since they are not regulated or authorized to operate. The SC released a statement stating:

“As such, we wish to caution and remind members of the public not to deal with unlicensed or unauthorized entities or individuals. Those who do so are not protected under the Malaysian securities laws and are exposed to various risks, including fraud and money laundering.”

The SC also warned the operators of these ATMs to cease their operations or face the ire of the law. Under the current securities law, the operators of these ATMs could face ten years of imprisonment or RM10 million in fine for operating without the DAX license.

The SC also released a website link that shows the names and list of verified operators from whom the users can purchase digital assets. The agency also asked the citizens to be more aware of these operators and also inform the agencies if they come across any such suspicious service providers or get any phone calls or emails.

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Author: Rebecca Asseh

Three Strikes, You’re Out for BitLicense Applicants Under NYDFS’ New Guidelines

New York’s regulatory and financial agency has issued a warning to Crypto companies vying for the states Bitlicense. According to the watchdog, companies could see their applications terminated if they fail to adhere to feedback.

This was made public on Wednesday, 24 June, when New York’s Department of Financial Services announced that it would be implementing a new ‘three-strike’ policy for each application. Implementing such a policy would allow the agency to respond more effectively to applications that do not adhere to requested feedback.

According to the Department of Financial Services:

“If all deficiencies, involving a particular application requirement, or set of requirements have not been fully and effectively addressed by the end of the response period for the third deficiency letter… the DFS may, without further notice, deny the application.”

The introduction of this ‘three-strike’ rule comes as New York celebrates the fifth anniversary since the Bitlicense was introduced. Since its conception, the state has been continually updating its regulatory framework for crypto companies to do business in New York easily. While Bitlicense’s structure has been regularly updated and re-evaluated, the state has approved only 25 companies. Even now, only 19 of them have received physical licenses.

One of the most recent applicants under New York’s Bitlicense was the derivatives clearinghouse company – ErisX in May.

So what was the true motivation behind making these changes, and implementing this rule? The agency mostly cited that it sought to help improve the existing procedure of applying for the BitLicense. Implementing a three strike policy would allow more responsive applicants to have their applications expedited. Meanwhile, companies that don’t adhere to regulatory concerns would have their applications rejected. The note continues,

“DFS believes this policy will benefit the majority of applicants who diligently advance their applications once they are under substantive review, allowing for more effective use of DFS resources.”

While the three strike rule is the most catchy change introduced, regulatory changes include the introduction of a checklist feature. The purpose is to ensure that companies have clear guidelines on what steps need to be addressed or have already been completed.

While these new regulations presume to make the process easier, publications have since argued that it may make the whole process far harder.

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Author: James Fox

National Internet Finance Association of China Warns Against Manipulative Crypto Exchanges

The National Internet Finance Association of China(NIFA) has issued a warning for investors who have been associated with the crypto-verse about the growing risks of the investment in the field especially crypto exchanges who are known for manipulating trading volumes on a regular basis.

NIFA is among the major Chinese Financial watchdog and is affiliated with the Chinese Central Bank. The statement came on Thursday where it noted that the research from their committee has shown many foreign crypto exchanges indulge in faking trading volume and wash trading to show a heightened number to lure new customers.

Given, NIFA is China’s Central Bank affiliated watchdog, it is also trying to push back the narrative that digital assets like Bitcoin are safe haven.

NIFA noted that the recent crypto market crash is a piece of clear evidence that Bitcoin and cryptocurrencies are not safe-haven assets like Bitcoin and Gold. The agency said,

“In our sampling analysis based on trading data from some of the exchanges, the daily trading turnover rate for more than 40 coins is over 100 percent, while more than 70 coins’ rate exceeds 50 percent,” NIFA said.

“Despite the relatively low price and small market value, there have been massive trading volumes.”

NIFA claimed that its analysis report shows that foreign crypto exchanges have divulged in faking their trading volumes with the help of bots while quite a few have blatantly copied the trading volume data of other exchanges and tried to pass it off as their own. The agency further accused these exchanges of misguiding investors on the nature of these digital currencies. NIFA said,

“After tricking investors into investing in crypto, some exchanges will manipulate the market through a range of trading techniques to make the investors’ assets.”

Exchanges are known for abruptly shutting their service citing maintenance reasons to avoid traders from trading on several occasions. While not every exchange do that there have been many prominent ones who have been accused of following this business model to contain their losses.

China’s Regressive Stance on Crypto Getting Stronger?

China has banned foreign crypto exchanges back in 2017 and trading of digital assets has been illegal as long as one can remember. The world’s most populous country is also known for its propaganda though which has been quite evident ever since the prime minister called for increased blockchain adoption.

Right after the PM’s call the state media propaganda machinery cited that Bitcoin is the best use case of blockchain, which gave many crypto enthusiasts high hopes that China might finally recognize the growing influence of these crypto-assets and might regulate crypto trading.

However, these hopes were short-lived as the state machinery in the following days made it clear that despite Bitcoin being the best use-case of blockchain, it has many flaws that would be overcome by their CBDC.

In the following week, the government also witch-hunted many crypto service providers evaporating any ray of hope among crypto enthusiasts. Given China’s authoritarian regime it would be a shocker if they allow the decentralized form of economy to flourish without them having any control. The state machinery has been trying to build a narrative around why crypto is bad for quite some time now.

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Author: James W

SEC Warns Crypto Investors Initial Exchange Offerings Could Be Securities Like Some ICO’s

On Tuesday, the US Securities and Exchange Commission (SEC) released a warning on initial exchange offerings (IEOs).

As the notice says, IEOs are pretty much the same as initial coin offerings (ICOs). However, the agency has investigated many to be unregistered securities offerings, especially in the last few years. Whereas providers of IEOs say their sales differ from ICOs, they still may be in violation of the federal securities laws, SEC mentions. For this reason, the agency has told investors to be very careful if they’re thinking about investing in IEOs. This is what the notice says exactly:

“IEOs are being touted as an innovation on ICOs because they are offered directly by online trading platforms on behalf of companies – usually for a fee – to provide immediate trading opportunities for the digital assets.”

Crypto Exchanges Aren’t Typically Registered with the SEC

SEC also says in the note that crypto exchanges aren’t typically registered with the agency, so they improperly call themselves exchanges. It warned that platforms may say they’re registered, but this doesn’t mean they actually are, not to mention IEO’s approved by the SEC don’t exist. It continued with:

“It is common for a fraudster to make false and misleading statements or exaggerated claims about regulatory approvals and oversight to lure potential investors. It pays to independently investigate these claims for yourself.”

According to the agency, investing in an IEO conducted by an offshore trading platform is risky because companies that decide to run their business offshore usually attempt to avoid regulations. More than this, it can be difficult to discover important information about them.

IEO Investors Using Offshore Platforms Won’t Find Legal Remedies in US Courts

The note mentions in the end that US courts can’t offer legal remedies to investors who use offshore trading platforms to be issued IEOs. While cases may be won in courts, US judgment can’t be collected against companies, entities or persons that operate in foreign countries, so the laws in those countries are the one to be applied.

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Author: Oana Ularu

40% Of Hedera Hashgraph Council Nodes Drops Offline, HBAR Price Down 54% In Last 30 Days

  • 4 of Hedera Hashgraph’s nodes have gone offline without any warning, indicating the network is perhaps more centralized than it was believed to be.

The closing of 4 nodes out of a total of 10 allows Sybill attacks to happen in an open network. Hedera Hashgraph is known to run public nodes, yet the Council Nodes are the ones that decide resources and software updates for the network. Hedera Hashgraph’s nodes should be run by the project’s largest platforms, like Boeing, IBM, Deutsche Telekom, and others.

Hedera Hashgraph Was the Big Sensation of 2019

Since it was a sensation in 2019, Hedera Hashgraph got immediately listed on Binance. Its CEO and co-founder, Mance Harmon, presented the project’s traditional business structure and organized a token sale that gained a lot of hype and many important buyers in the pre-sale periods.

The HBAR Token Failed

Soon after the exchange’s launch, the HBAR token began to unravel itself. The news on the node shutdown has caused the asset to go down by 9% once more, reaching the $0.011 value, after the initial $0.40 trading levels. HBAR has been made available for early buyers, last time on December 31, making retail token holders become reluctant bagholders.

Hedera Hashgraph had an attempt to manage the price slide of the token by offering ICO buyers who haven’t invested too much in HBAR future rewards if they held onto their pre-launch tokens and gave up on getting active HBAR. This is how the HBAR price is expected to change in 2020, according to distribution:

Every distribution almost coincides with immediate selling and causes the price to go down without any hope of stopping. Binance is the main liquidity source as it liquidates HBAR:

hedera-hashgraph hbar charts

hedera-hashgraph hbar charts

hedera-hashgraph hbar charts

Hedera Hashgraph Among the Biggest ICO’s in 2019

Hedera Hashgraph is a project that became one of the biggest ICOs in 2019. It has raised an impressive sum of $100 million in spite of having its token sales mostly frozen. However, its community soon discovered the technology behind it is not enough, also that misleading tokenomics were presented to insider buyers, which lead to crypto players who were enthusiastic about the project to suffer losses.

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Author: Oana Ularu

Shenzhen City Authorities Warns Against Illegal Crypto Activities After Recent Blockchain Hype

According to Eastmoney, Shenzhen, the tech capital of china recently issued a warning against illegitimate dealings taking place in the cryptocurrency industry. The report released by Eastmoney indicated that the Leading Group for Remediation of Internet Finance Risks, a regulatory body in the city, is investigating all illegal dealings in the crypto space.

According to the Leading Group, the illegal activities are more rampant in Initial Coin Offerings (ICOs), issuance of cryptocurrency assets, use of fiat to fundraise, crypto exchanges and fictional use of crypto and blockchain technology.

The officials claim that the ban on crypto is aimed at improving safety in the industry. According to the regulatory body, the illegal activities had reduced since China’s ban on ICOs and local exchanges in 2017. Ever since the ban, financial risks associated with the industry also significantly reduced.

However, after the recent official endorsement of the blockchain technology and crypto industry by president Xi Jinping, the speculation of cryptocurrency has been rejuvenated. The public interest in blockchain tech and cryptocurrency greatly increased, leading to a gain in the crypto market. This has, unfortunately, been followed by an increase in illegal activities in the industry.

According to a report recently issued by Cointelegraph, the Chinese state media claims that over 32,000 Chinese companies claim to be using the blockchain technology. However, after research, it was found out that only 10% of the companies claiming to be using the technology actually use it. Most of the firms have been taking advantage of the blockchain hype to sell their businesses.

The Chinese regulator plans to take enforcement actions after the accumulation of the requisite evidence against such malicious activities in accordance with the Announcement on Preventing the Risk of Subsidy Issuance of Financing.

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Author: Denis Miriti

SEC, CFTC and FinCEN Tells Crypto Industry to Abide By Existing US Financial and Banking Laws

Three major US financial regulators are warning the crypto industry players to adhere to the country’s banking laws.

The warning was given in a joint communique issued on Friday and signed by the heads of Commodity Futures Trading Commission (CFTC) Heath Tarbert, Financial Crimes Enforcement Network (FinCEN) Kenneth Blanco and Securities and Exchange Commission (SEC) Jay Clayton.

The three regulatory bodies are reminding players in the crypto industry that they must adhere to different banking and financial services legislations irrespective of how they describe their digital coins or tokens.

The regulatory agencies pointed out at the Bank Secrecy Act (BSA) that stipulates how various financial services enterprises should be licenced or registered by the relevant regulators. Of importance, the regulators stated that the ‘form of digital asset-related activities’ that an individual engages in will define the regulator that such an individual should register with and which other legislations they must adhere to.

The three heads explained the mandate of their agencies when it comes to cryptos and related services. They addressed such aspects like futures commission merchants, brokers, crypto exchanges, mutual funds, among others. They went ahead to describe the types of companies each of the agency oversees.

The statement also reminded crypto users and handlers of their mandate when it comes to anti-money laundering (AML) and countering the financing of terrorism (CFT).

The regulators reminded individuals and organizations dealing with crypto trading that they have an obligation of reporting as per the Bank Secrecy Act (BSA) emphasizing on illicit use of cryptos, that has been a key focus for the regulators in the recent past.

In regards to AML and CFT, the regulators reminded the crypto players in the market that they have a duty to keep updated records of transactions as well as reporting requirements comprising of suspicious activities.

Apart from the rare joint statement from the three financial regulatory agencies, Cointelegraph reports that earlier today, a draft of a new IRS questions 1040 form for the current fiscal year surfaced and contains a section with a new duty to report crypto assets. It reads:

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

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Author: Joseph Kibe

Canadian Investors Using Bitcoin ATMs to Purchase BTC are Warned of a New Scam by Authorities

In a report released by one of the Canadian dailies, authorities in the country are warning potential Bitcoin investors to beware of the ATM scams, which are becoming more rampant. Winnipeg police brought to light a recent scam intended to part gullible investors with their Bitcoin (BTC) as leaflets spread across Bitcoin ATMs in the state.

“Beware of Bitcoin ATMs scams”

A report from Manitoba Post warns users of an ongoing scam whereby posters and flyers are plastered across Bitcoin ATMs asking users to send their Bitcoin from their address once bought. The leaflets (an example shown below) asks buyers to scan a QR Code and send already bought Bitcoins to an account – “CoinBTC”.

A fake Bitcoin ATM poster  

A fake Bitcoin ATM poster  

Posters are plastered across Bitcoin ATMs in Canada to scam gullible investors (Source: Manitoba Post)

While the scam looks obvious for experts in the field, it can easily confuse early adopters of the pioneer cryptocurrency. The instructions look believable such as the statement, “Due to the inconvenience, the commission was temporarily reduced to 3%.”

Investors are cautioned against sending BTC to these addresses as it will result to loss of your tokens.

Regulations against Bitcoin ATM scams

On Aug 15, the state of Nevada official, Julie Hanivold, asked all ATM owners across the state to follow the regulations set for money transmitters. These owners will need to meet all of the statutory requirements that have been publicly posted on the state’s official website to be able to operate within the state.

As the number of Bitcoin ATMs across the globe crossed the 5,000 mark earlier in the year, regulations and vigilance will be needed for these ATMs to flourish.

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Author: Lujan Odera