Binance CEO: Bitcoin Price Drop is Business as Usual ...

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to BitcoinCA [link] [comments]

What Might Happen if Bitcoin Loses Its Dominance? – Crypto Disrupt

For the entire history of cryptocurrency, bitcoin has been the dominant coin almost entirely because it was the first fully functional cryptocurrency to go live and showcased the power of the blockchain. According to CoinMarketCap, Bitcoin has mostly had a 90% dominance over the market from 2013 to 2017. This means that for four years, 90% of the money within the cryptocurrency market was in the form of bitcoin. It also means that bitcoin had the highest market capitalization.
However, from March 10th 2017 to June 19th, 2017 its dominance fell to a mere 37%. In the space of just 101 days, bitcoin lost 53% of its dominance. Since then, it has never seen dominance beyond 65%. Bitcoin’s massive fall from grace was the first time that the market got a sense for its vulnerability, and if it wasn’t for such a drop in dominance, we might not have the same thriving and diverse market that we have today. This is because, on June 12th, 2017, Ethereum reached its highest market dominance of 33%. Bitcoin’s loss of dominance allowed for Ethereum’s network to grow and flourish, providing us with hundreds of ERC20 tokens.
At the moment, Bitcoin’s dominance is at 42%. This is still a massive number. In fact, it is absurdly massive. For comparison, there is nothing in the stock market that comes close to such dominance. While Bitcoin is a powerful force in the industry, it is perhaps not powerful enough to stay dominant forever. What would happen if it lost its dominance altogether? What if another coin held dominance?
Bitcoin could lose its relevance Bitcoin will always be remembered as the first cryptocurrency and the coin that brought us blockchain technology, but this alone is not enough to keep it relevant. Right now, bitcoin is used as a gateway into the world of cryptocurrency for investors. People mainly buy into it so that they can exchange it for other cryptocurrencies through services like Binance. This is partially because bitcoin is the most used trading pair, meaning that you need it to make trades with other more obscure coins. If bitcoin lost its dominance, it is likely that it would stop being used as the leading trading pair on exchanges.
No longer a viable store of value People who use bitcoin as a means of storing their wealth might think twice if it was to lose its dominance. At the moment, the most appealing aspect of using bitcoin for this function is that it is worth more than other cryptocurrencies. Without its dominance, people may start looking into other coins as a store of value. It is possible that they would come to the conclusion that a stablecoin is better suited for the job. Stablecoins are cryptocurrencies which are pegged to the price of something external (usually to legal tender or possibly gold). The most (in)famous example of this is Tether, which is pegged at $1.00, but investors are wary of using it as a store of value because of its shady handlings. New stablecoins like Dai are being developed that aim to take over from Tether.
The perk of storing your money in a stablecoin is that you can be confident that it will not fluctuate drastically like every other cryptocurrency.
Bitcoin’s price could drop significantly Not only does bitcoin have market dominance, but it is also the most expensive coin on the market. Technically, bitcoin could remain the most expensive cryptocurrency even with a minority dominance, but this is unlikely. Bitcoin’s price is arguably tied to people’s trust that it will stay dominant. Without its dominance, it loses its proof of relevancy, and therefore its price.
We would have a new dominant coin Naturally, if bitcoin lost its dominance, we would have a new dominant cryptocurrency. A reasonable guess would be that Ethereum would become the new dominant coin since it has the second largest market cap right now. If Ethereum gained market dominance, it is possible that all ERC20 tokens could rise significantly in price too as they rely on Ethereum’s blockchain. This would change the landscape of the market substantially. Ethereum dominance could mean that more Ethereum tokens enter the top ten on CoinMarketCap (currently only one token is there).
How likely is it that Bitcoin will lose its dominance? Bitcoin has only once come close to losing its dominance, which was on June 12th, 2017, when Ethereum’s dominance rose. Since then it has kept a comfortable distance from all other coins. The reason people think bitcoin will lose its dominance is that other coins, like Ethereum, are more functional. You can use this tool to see how close Ethereum is to overtaking Bitcoin in terms of dominance.
With that said, Bitcoin may never lose its dominance. While it does seem likely that one day another coin will be more valued, there is no reason to say that will ever happen. This was merely a discussion regarding what might happen should such a situation arise.
What are your thoughts?
Source: https://cryptodisrupt.com/what-might-happen-if-bitcoin-loses-its-dominance
submitted by pyro0049 to BitcoinMarkets [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to Anarcho_Capitalism [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to Bitcoin [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoCluster [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoPolice [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to btc [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to CryptoCurrencyTrading [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.” “This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to ICOAnalysis [link] [comments]

The Biggest Scams In The Crypto History: Part 2

Here’s the sequel of our previous article. You wanted — you got it. Let’s roll!
OneCoin
OneCoin is a good example of a Ponzi scheme. In 2015, the Indian company One Coin Limited began to issue digital currency without a blockchain and decentralization. The old-school MLM (Multi-Level Marketing) strategy was used for the distribution of coins.
The company was selling a wide range of training packages on crypto trading, mining and successful life. There were textbooks, presentations, and other rubbish, among which were OneCoin tokens. They were supposed to allow users to get even more tokens. But the thing was that only One Coin Limited had exclusive rights to issue of coinage. So there were no other options for mining this coin.
On the international conference the founder of OneCoin, Ruja Ignatova, presents these tokens as the Bitcoin killer. See how easy it is to fool users?
Over the years, the company has spread its network globally. And only in 2017, the project gets into a number of investigations and restrictions. Owners and employees of the company more and more often could not answer questions from investors and carried on with the nonsense about “a bright crypto-future.”
Finally, regulators and banks in Italy, Germany, Hungary, Belize, Thailand and other countries have banned the trade of OneCoin and warned users not to get engaged with this company.
In early March 2019, the current OneCoin cryptocurrency leader Konstantin Ignatov, brother of Ruja Ignatova, was arrested at Los Angeles airport. He is accused of fraud and creating a financial pyramid.
According to the United States Attorney’s Office, Ignatov and his sister misled investors all over the world, and as a result, the people invested billions of dollars in a fraud scheme. They are accused of building a billion-dollar cryptocurrency company, based entirely on deception.
FBI Assistant Director-in-Charge William Sweeney, Jr. said:
“OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”
Despite all hardships, One Coin Limited continues to work. If you check out their website you will find everything there: a meaningless text about the benefits of a “revolutionary” token and other signs of a high-quality international project that deceives people.
QuadrigaCX
It’s not possible to take your savings to the grave, right? More than 100,000 clients of QuadrigaCX are ready to argue with that. So let’s try to recount the details of this strange story.
QuadrigaCX was created in 2013 and was Canada’s largest cryptocurrency exchange.
In December 2018, Gerald Cotten (founder and CEO of the QuadrigaCX) and his wife — Jennifer Robertson, were in India on their honeymoon. During this trip Cotten suddenly passed away from Crohn’s disease. After his death, it turned out that Gerald was the only one who had access to cold wallets of the exchange platform.
Changpeng Zhao (Binance CEO) comments this situation on Twitter:
“That’s sad. There are many solutions to split private keys or signing to achieve 3/5, 5/7 etc. Never neglect security. Also, never have CEO carry private keys. Bad on many levels.”
On January 25, 2019 (that is, almost two months after Cotten’s death) a special meeting was convened to appoint QuadrigaCX’s new directors. As a result, the inconsolable widow Jennifer Robertson, her stepfather Thomas Beazley and Jack Martel were elected to take charge of a company. By the way, this meeting was held by a conference call as the widow was very busy by hastily selling the property of her deceased husband. Indeed, there was something to deal with: a yacht, a plane, and several houses. Also, dearly departed managed to take care of his Chihuahuas by opening a special trust account for them in the amount of $100,000 (which is interesting, as Cotten did not show such forethought about the clients of his company).
It’s worth to mention that the clients of QuadrigaCX had problems with the exchange for a long time — mainly related to the withdrawal of funds. The first wake-up calls took place in March 2018, when press reports negatively about delays in the withdrawal of funds the total amount of which exceeded $100,000. But that’s all just moonshine compared to the fact that in June 2017 the exchange platform lost about 15 million Canadian dollars — as explained to the community, due to a bug in the smart contract. As a result, the Canadian Imperial Bank of Commerce (CIBC) froze about $22 million in QuadrigaCX accounts. This happened in November 2018, and for all users, it would have meant the end of a remarkable business but Mr. Cotten wasn’t explaining the problems to customers, wasn’t trying to solve them, and so on. He had just married and went on a honeymoon trip to pass away exactly two weeks after freezing the accounts.
As the inconsolable widow stated in her testimony:
“To the best of my knowledge, most of the businesses of these companies was being conducted by Gerry whenever and wherever he and his computer were located”.
In February 2019, the head of Coinbase — Brian Armstrong unveiled the results of an independent investigation into the QuadrigaCX. He reported on his Twitter account the following:
“Sequence of events suggests this was a mismanagement with later attempt to cover for it.”
“This implies that at least few people inside Qadriga knew that they were running fractional. If so, then it’s possible that untimely death of their CEO was used as an outlet to let the company sink”.
Brian Armstrong stressed that QuadrigaCX users started complaining about problems with withdrawing money long before Gerald Cotten’s death. Thus, the company management decided to invent a story about private keys on the laptop of the CEO to hide the financial insolvency, one of the reasons for which could be inefficient management.
Nowadays, the Canadian cryptocurrency exchange QuadrigaCX is officially bankrupt. Users of the closed Quadriga are now leading legal battles in order to recover their funds. The total amount of which is about $190 million in crypto. The exact circumstances of the disappearance of user deposits remain uncertain.
Do you think the story with QuadrigaCX was Exit Scam or Mismanagement?
Bitfinex
One of the largest crypto scandals of the year broke out on April 30, 2019. The New York State Attorney General’s Office has filed serious accusations against the biggest exchange platform — Bitfinex. According to Leticia James, the exchange platform used the reserves of Tether, an affiliated company to cover up a loss of $850 million.
Questions to Tether have been in the air for a long time. In January 2018, the critics of the main stablecoin assumed that the company, in fact, produced more coins than it actually could sustain. Some critics accused the Bitfinex in fraud and manipulation of Tether’s rate and influenced through it on the price of Bitcoin.
So what’s up with the Bitfinex? Investigators of the prosecutor’s office claim that the lost money belonged to the clients and iFinex corporation. That is why, back in October 2018, Bitfinex started having problems with the withdrawal of the funds: the clients complained about long response time and a delay in receiving currency. According to the authorities, Bitfinex transferred $850 million to Crypto Capital Corp., the payment company. The Tether reserves were used to fill the gap, but this information was not disclosed to the public. According to the first data, Tether provided funding in the amount of at least $700 million for this purposes. Withdrawing this amount of currency severely shook faith in the idea that Tether tokens are indeed fully backed by dollars.
And then Bitfinex had extraordinary difficulties in satisfying the withdrawal demands from the platform since Crypto Capital refused to process withdrawals or simply could not return any funds. One of the senior Bitfinex executives opened a can of worms by writing the following:
“Please understand all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k if we don’t act quickly.”
Soon after it was known about the serious accusations against companies, Bitfinex’s users began to panic. They started buying Bitcoin and trying to get rid of their assets in USDT. As a result, BTC was trading $350+ (6.75%) more expensive than the crypto market average.
Tether and Bitfinex published a joint statement on their official blogs in response to the allegations of missing funds. The posts allege that the companies did not receive any preliminary warnings, as well as that lawsuits from the New York Prosecutor General’s Office were “riddled with false assertions”.
According to the latest information, Bitfinex is supposed to release its own token and attract $1 billion in Tether through IEO.
What do you think about these scandals and scams? Tell us your thoughts in the comments below.
Like and share this article if you find it useful. Want more interesting articles on the crypto world? Follow us on Medium, Twitter, Facebook, and Reddit to get Stealthex.io updates and the latest news about the crypto world. For all requests message us at [[email protected]](mailto:[email protected]).
submitted by Stealthex_io to u/Stealthex_io [link] [comments]

US Tax Guide for Cryptocurrencies

Introduction:  
Greetings, cryptax! Tax season is upon us, and in the next couple of months, taxpayers across the US will be filing their 2017 tax returns. As a tax professional, an Enrolled Agent, and a cryptocurrency investor and enthusiast, I wanted to write up a brief guide on how your investments in cryptocurrencies are taxed in the US.
 
 
1. Are cryptocurrency realized gains taxable?
Yes. The IRS treats virtual currency (such as cryptocurrency) as property. That means if you sell BTC, ETH, or any other cryptocurrency that has appreciated in value, you have realized a capital gain and must pay taxes on this income. If you held the position for one year or less, it is a short-term capital gain which is taxed at your ordinary income tax rate. If you held the position for more than one year, it is a long-term capital gain which is taxed at your long-term capital gains tax rate. In most cases, this is 15%, but could also be 0% or 20% depending on your specific ordinary income tax bracket.
 
2. If I sell my BTC for USD on Coinbase but do not transfer the USD from Coinbase to my bank account, am I still taxed?
Yes. The only thing that matters is that you sold the BTC, which creates a taxable transaction. Whether you transfer the USD to your bank account or not does not matter.
 
3. If I use my BTC to buy another cryptocurrency (XMR for example), is this a taxable transaction?
Most likely yes. See #4 below for a more detailed explanation. If assuming crypto to crypto trades are not able to be like-kind exchanged, then continue on to the next paragraph here.
This is actually two different transactions. The first transaction is selling your BTC for USD. The second transaction is buying the XMR with your USD. You must manually calculate these amounts (or use a website such as bitcoin.tax or software to calculate it for you). For example, I buy 1 BTC for $8,000 on Coinbase. Later on, the price of 1 BTC rises to $9,000. I transfer that 1 BTC to Bittrex and use it to buy 38 XMR. I have to report a capital gain of $1,000 because of this transaction. My total cost basis for the 38 XMR I purchased is $9,000.
 
4. If I use my BTC to buy another cryptocurrency, could that be considered a tax-free like-kind exchange?
Probably not. The new tax law says that like-kind exchanges only pertain to real estate transactions. This was done with Section 13303, which replaced “property” with “real property” for all of Section 1031 (page 72 near the bottom). My personal interpretation:
In 2018 and going forward, cryptocurrencies can definitely not be like-kind exchanged.
In 2017 and before, it is a very gray area. I personally am not taking the position that they can be like-kind exchanged, because if the IRS went after a taxpayer who did this, the IRS would probably win and the taxpayer would owe taxes, interest, and probably penalties on every single little gain made from trading one cryptocurrency for another.
Here is a great interpretation of why trading cryptocurrency for cryptocurrency is probably not a like-kind transaction.
In my opinion, the biggest factor is that like-kind exchanges must be reported on Form 8824 and not just ignored. Therefore, if a taxpayer is claiming like-kind exchanges on crypto to crypto exchanges, he or she would have to fill out a Form 8824 for each individual transaction of crypto to crypto, which would be absolutely cumbersome if there are hundreds or thousands of such trades.
Another is that there has to be a Qualified Intermediary that facilitates a like-kind exchange. So, it's a more involved process, and that's why I think cryptocurrency cannot be like-kind exchanged.
Here is another article about like-kind exchanges.
Here is the American Institute of CPAs' letter to the IRS, dated June 10, 2016, asking them to release guidance on whether crypto to crypto can be like-kind exchanged or not. The IRS has not responded to the letter.
 
5. How do I calculate the realized capital gain or loss on the sale of my cryptocurrency?
The realized gain or loss is your total proceeds from the sale minus what you purchased those positions for (your cost basis). For example, you bought 1 BTC for $3,000 in June of 2017. In December of 2017, you sold that 1 BTC for $18,000. Your realized gain would be $18,000 - $3,000 = $15,000. Since you held it for one year or less, the $15,000 would be a short-term capital gain taxed at your ordinary income tax rate.
 
6. Which BTC's cost basis do I use if I have multiple purchases?
The cost basis reporting method is up to you. For example, I buy my first BTC at $3,000, a second BTC at $5,300, and a third BTC at $4,000. Later on, I sell one BTC for $8,000. I can use:
FIFO (first in first out) - cost basis would the first BTC, $3,000, which would result in a gain of $5,000.
LIFO (last in first out) - cost basis would be the third BTC, $4,000, which would result in a gain of $4,000.
Average cost - cost basis would be the average of the three BTC, $4,100, which would result in a gain of $3,900.
Specific identification - I can choose which coin's cost basis to use. For example, I can choose the second BTC's cost basis, $5,300, which would result in the lowest capital gains possible of $2,700.
The IRS has not given any guidance on cost basis accounting methods for cryptocurrency, but I am taking the position that any method can be used, and that you can change your method at any time as you please (e.g. FIFO for one year, LIFO for another. Or, FIFO for the sale of a specific lot, then LIFO for the sale of another lot on the same day).
 
7. If I end up with a net capital loss, can I claim this on my tax return?
Capital gains and capital losses are netted on your tax return. If the net result of this is a capital loss, you may offset it against ordinary income on your tax return, but only at a maximum of $3,000 per year. The remaining losses are carried forward until you use them up.
 
8. What is the tax rate on my capital gains?
If long-term, the tax rate is 0%, 15%, or 20%, depending on your ordinary income tax bracket. If short-term, the tax bracket you’ll be in will depend on your total income and deductions. The ordinary income tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% in 2017 and 10%, 12%, 22%, 24%, 32%, 35%, and 37% in 2018 and going forward.
Here are the 2017 and 2018 ordinary income tax brackets.
Here are the 2017 and 2018 long-term capital gains tax brackets.
Here is a detailed article on how the calculation of long-term capital gains tax work and how you can take advantage of the 0% long-term capital gains rate, if applicable.
 
9. If I mine BTC or any other cryptocurrency, is this taxable?
Yes. IRS Notice 2014-21 states that mining cryptocurrency is taxable. For example, if you mined $8,000 worth of BTC in 2017, you must report $8,000 of ordinary income on your 2017 tax return. For many taxpayers, this will be reported on your Schedule C, and you will most likely owe self-employment taxes on this income as well. The $8,000 becomes the cost basis in your BTC position.
 
10. How do I calculate income for the cryptocurrency I mined?
This is the approach I would take. Say I mined 0.01 BTC on December 31, 2017. I would look up the daily historical prices for BTC and average the high and low prices for BTC on December 31, 2017, which is ($14,377.40 + $12,755.60) / 2 = $13,566.50. I would report $13,566.50 * 0.01 = $135.67 of income on my tax return. This would also be the cost basis of the 0.01 BTC I mined.
 
11. Can I deduct mining expenses on my tax return?
If you are reporting the income from mining on Schedule C, then you can deduct expenses on Schedule C as well. You can deduct the portion of your electricity costs allocated to mining, and then you depreciate the cost of your mining rig over time (probably over five years). Section 179 also allows for the full deduction of the cost of certain equipment in year 1, so you could choose to do that if you wanted to instead.
 
12. If I receive BTC or other cryptocurrency as a payment for my business, is this taxable?
Yes. Similar to mining, your income would be what the value of the coins you received was. This would also be your cost basis in the coins.
 
13. If I received Bitcoin Cash as a result of the hard fork on August 1, 2017, is this taxable?
Most likely yes. For example, if you owned 1 Bitcoin and received 1 Bitcoin Cash on August 1, 2017 as a result of the hard fork, your income would be the value of 1 Bitcoin Cash on that date. Bitcoin.tax uses a value of $277. This value would also be your cost basis in the position. Any other hard forks would probably be treated similarly. Airdrops may be treated similarly as well, in the IRS' view.
Here are a couple more good articles about reporting the Bitcoin Cash fork as taxable ordinary income. The second one goes into depth and cites a US Supreme Court decision as precedent: one, two
 
14. If I use BTC or other cryptocurrency to purchase goods or services, is this a taxable transaction?
Yes. It would be treated as selling your cryptocurrency for USD, and then using that USD to purchase those goods or services. This is because the IRS treats cryptocurrency as property and not currency.
 
15. Are cryptocurrencies subject to the wash sale rule?
Probably not. Section 1091 only applies to stock or securities. Cryptocurrencies are not classified as stocks or securities. Therefore, you could sell your BTC at a loss, repurchase it immediately, and still realize this loss on your tax return, whereas you cannot do the same with a stock. Please see this link for more information.
 
16. What if I hold cryptocurrency on an exchange based outside of the US?
There are two separate foreign account reporting requirements: FBAR and FATCA.
A FBAR must be filed if you held more than $10,000 on an exchange based outside of the US at any point during the tax year.
A Form 8938 (FATCA) must be filed if you held more than $75,000 on an exchange based outside of the US at any point during the tax year, or more than $50,000 on the last day of the tax year.
The penalties are severe for not filing these two forms if you are required to. Please see the second half of this post for more information on foreign account reporting.
 
17. What are the tax implications of gifting cryptocurrency?
Small gifts of cryptocurrency do not have a tax implication for the gift giver or for the recipient. The recipient would retain the gift giver's old cost basis, so it could be a good idea for the gift giver to provide records of the original cost basis to the recipient as well (or else the recipient would have to assume a cost basis of $0 if the recipient ever sells the cryptocurrency).
Large gifts of cryptocurrency could start having gift and estate tax implications on the giver if the value exceeds more than $14,000 (in 2017) or $15,000 (in 2018) per year per recipient.
Here's a good article on Investopedia on this issue.
An important exception applies if the gift giver gives cryptocurrency that has a cost basis that is higher than the market value at the time of the gift. Please see the middle of this post for more information on that.
 
18. Where can I learn even more about cryptocurrency taxation?
Unchained Podcast: The Tax Rules That Have Crypto Users Aghast
IRS Notice 2014-21
Great reddit post from tax attorney Tyson Cross from 2014
 
19. Are there any websites that you recommend in helping me with all of this?
Yes - I have used bitcoin.tax and highly recommend it. You can import directly from an exchange to the website using API, and/or export a .csv/excel file from the exchange and import it into the website. The exchanges I successfully imported from were Coinbase, GDAX, Bittrex, and Binance. The result is a .csv or other file that you can import into your tax software.
I have also heard good things about cointracking.info but have not personally used it myself.
 
20. If I move my BTC from one exchange to another, or into a hard wallet, is this a taxable event?
No - you are not selling anything, so no gains are realized.
 
21. Where do I report cryptocurrency sales on my tax return?
The summary of your sales would reported on Schedule D on line 3 and/or line 10 depending on short-term or long-term. Supplemental Form 8949 must also be included with Box C or Box F checked depending on short-term or long-term. Form 8949 is where you must list each individual sale.
 
22. If coins become lost or inaccessible (e.g. lost or forgotten passphrase or thrown away hard drive), can I claim that as a loss? What about coins that have gotten stolen? What about losing money in investment or ICO scams (e.g. Bitconnect or Confido)?
These are really tricky questions. Unfortunately, the potential to claim such a loss against ordinary income is very low, especially with the new tax law. At the very least, capital losses can be claimed, but the deduction is capped at $3,000 per year against ordinary income with the rest carrying forward indefinitely.
The new tax law changed the casualty and theft loss to only apply to presidential disaster areas, so at least in the case of a loss passphrase, I think the answer is no for 2018 and going forward. For 2017, the answer is possibly yes. Here is an article on the subject if you are interested in reading more.
 
23. Taxation is theft!
Sorry, I can't help you there.
 
 
That is the summary I have for now. There have been a lot of excellent cryptocurrency tax guides on reddit, such as this one and this one, but I wanted to post my guide on cryptax which hopefully answers some of the questions you all may have about US taxation of cryptocurrencies. Please let me know if you have any more questions, and I’d be happy to answer them to the best of my ability. Thank you!
Regarding edits: I may make many edits to my post after I originally post it. Please refresh to see the latest edits to my guide. Thank you.
 
Disclaimer:
The information contained within this post is provided for informational purposes only and is not intended to substitute for obtaining tax, accounting, or financial advice from a professional.
Any U.S. federal tax advice contained in this post is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.
Presentation of the information via the Internet is not intended to create, and receipt does not constitute, an advisor-client relationship. Internet users are advised not to act upon this information without seeking the service of a tax professional.
submitted by Nubboi to cryptax [link] [comments]

Evolution of Exchanges

Swap.Online delves into the background of centralized and decentralized cryptocurrency exchanges. As decentralization is our name for the game, we would primarily like to find out whether it was inevitable or not.

From Childhood to the Golden Age: DCEs and CEXs

The first centralized cryptocurrency exchanges had two main pre-historical roots of origin. Ideologically, they originated from the e-commerce exchange services of the early 2000s. Digital Currency Exchanges, or DCEs, were particularly popular in the U.S. and Australia. GoldAge Inc., E-Gold Inc., Liberty Reserve were frequently seen in the headlines mostly due to legal issues, as the U.S. SEC, as well as the Australian ASIC failed many times over to figure out whether the e-gold exchange was a form of banking, money laundering, non-licensed remittances or illegal entrepreneurship. These services exchanged fiat money on different digital currencies (1MDC, E-Gold, eCache etc.) and, in a way, fulfilled the demand of New World and EU citizens for anonymous transactions of digital and fiat money.
But, in fact, the first significant cryptocurrency exchange arose from a surprising source… The website of the online game “Magic: The Gathering Online”. This game’s name refers to a magical world, where the currency system is represented in the form of cards. Jed McCaleb, the programmer from San Francisco and future contributor for Ripple and Stellar, developed the Mt.Gox project with the purpose of trading these cards like traditional stocks. In January 2007, he purchased the domain name mtgox.com, but in 2008, he abandoned the project as a premature venture. One year later, he used this domain to advertise his own online game. In the year of 2010, he read about the concept of Bitcoin and decided to launch the Mt.Gox exchange and exchange rate service allowing to trade Bitcoin freely. The project was released on July 18, 2010.
Rapid commercial growth started when the product was sold to the French-Japanese developer Mark Karpeles in January 2011. It was the year 2011 when Mt.Gox demonstrated the main security challenges that traditional centralized exchanges will encounter all along their development path in the future. These included direct thefts from the platform’s wallets, attacks with multiple ‘ask’ orders, malefactor invasions resulting in price drops (one day, in the spring of 2011, 1 BTC was worth less than 0.01 USD) etc. By the way, the dramatic collapse of February 2014, with more than 750K BTC lost and the $65M civil suit in Tokyo court were still to come. During the years 2012–2013, every 3 of 4 Bitcoins in the world was sold via Mt.Gox, and it was a real success story.
The years 2011–2012 gave birth to the bulk of top centralized cryptocurrency exchanges. BTCC was founded in June 2011 as the first exchange for the Chinese market. At the same time, American developer Jesse Powell had spent a month visiting Mt.Gox offices to offer assistance in the aftermath of the first hack. He was unsatisfied with the level of business organization, and that was how Kraken was founded in July 2011. The infamous BTC-e platform for exchanging rubles for BTC was also launched in July 2011. In late 2011, the largest American exchange BitInstant was founded and started selling Bitcoin via WalMart and Walgreen. 2012 became the year of origin for Bitfinex, Coinbase (first Ethereum marketplace) and LocalBitcoins.

Pros and Cons of Centralized Exchanges

We are now six or seven years away of those days. Today, hundreds of centralized exchanges are offering the services of exchanging BTC, ERC-20 and another cryptos. We can even hardly classify them. Usually, specialists speak about three mainstream types of centralized exchanges.
Trading platforms. They connect buyers and sellers to each other, allowing them to publish trading orders and take some transactional fees (most commonly 0,3 per cent from the taker of the liquidity). For example, Cex.io, BitFinex, BitStamp belong to this group. Usually, these platforms are characterized by a complicated interface, which is not suitable for newbies.
Cryptocurrency brokers. If a trading platform is a local market where you buy goods from their producers, the broker is a small player on the market. They sell coins at definite prices while setting high fees, but allow acquiring cryptos in a simpler manner. Moreover, most of them support a broad range of payment tools. Coinbase, Coinmama, Coinhouse are among the most popular brokers.
Peer-to-peer-services. They simply allow their users to publish announcements about operations with cryptos. The buyer and the seller directly negotiate the prices. It is even possible to find one selling crypto for cash in your neighborhood. The most remarkable example here is LocalBitcoins.
As one can see, now the range of services offered is truly broad. By the way, there is a list of common complaints regarding centralized exchanges both from traders and crypto theoreticians.
Safety. Even a single point of centralization can lead to the massive theft of users’ funds and keys. More than a million BTCs have been stolen by the time of writing of this article.
Regulation. If the center (or even one of the centers) of a CEX is physically located in some country, the position of this country’s government on ICOs and crypto related issues becomes crucial for the future of the project. Legal restrictions in this sector are now imposed in the U.S., China, South Korea, India etc. When your exchange is centralized, the officials can arrest your cryptos for no reason. Moreover, the administration of the exchange can be involved in fraud with your private information and money.
Speed. We have conducted some particular research on the speed of popular CEXs (Binance, Huobi, Poloniex, see p. 11). The results are sad: you can wait dozens of minutes waiting for the pending of your transaction.
KYC/AML. There is nothing to talk about in this regard, we suppose. If you must send someone your photo, a scanned copy of your ID or even proof of income wanting nothing in return but to withdraw your own funds, it is not OK.

Decentralization: The Solution

Decentralization, as the initial meaning and internal essence of blockchain, smart-contracts and cryptocurrencies, was first italicized by Satoshi Nakamoto and even Nick Szabo in 1990–2000-s. The rise of CEXs resulted in an obvious contradiction, because blockchain-based currencies are being operated via centralized mechanisms just like Visa or MasterCard, but much slowly. Is it normal? Where is the next stage of evolution or, does it even exist in the first place?
The answer was the main point of arguments in the crypto community during the year of 2017. In February, Vitalik came out with the suggestion about the nature of blockchain’s decentralization: “Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure), but they are logically centralized (there is one commonly agreed state and the system behaves like a single computer)”.
The only possible expression in the commercial implementation of ‘architectural decentralization’ is the decentralized exchange of cryptocurrencies.
And the most advanced technology in this case is that of the Atomic Swaps — the direct peer-to-peer instant cross-chain transaction.
CEXs were the natural and inevitable stage of development for cryptocurrency exchanges. By the way, the DEXs are coming: we found them (namely IDEX, EtherDelta and Waves DEX) on the list of the top-100 exchanges on Coinmarketcap.
So, the Swap.Online team is on the right track. Get ready for ERC-20 ⇔ BTC, ETH ⇔ BTC, USDT ⇔ BTC, EOS ⇔ BTC trading directly from your browser with neither middlemen nor a centralized infrastructure.
See you on the mainnet on August 27, 2018,
Swap.Online Team
submitted by noxonsu to SwapOnline [link] [comments]

Why Did Bitcoin Drop In Price, VPN Necessity, Litecoin Summit, TRON Lunch & No Voice For Me Future Markets Plummet, Global Recession, Bitcoin Drops $1200, Mt Gox Selloff & Stockpiling Ethereum BITCOIN $380K END GAME!! BINANCE LIBRA FORK? - Programmer Explains Binance With Credit Card, Coinbase New York Coins, Bitcoin Hash Rate & Bitcoin Price Recovery Bitcoin Price Dropping! Here Is Why  YOU ARE BEING LIED TO On Twitter! WATCH ENTIRE VIDEO Bitcoin Price Plummets Below $4,000 To 1-Year Low  BTC Under $1K Is Possible Warns Peter Brandt Why did Bitcoin drop 10% again...? Bitcoin Crash  Binance Hack and SEC Bitcoin ETF Withdrawn, Bitcoin Price Drop, FED Cash Pump & New Interest Rate Cut KIK SEC Shut Down, Binance + Tezos, Crypto Stock Exchange & Bearish Bitcoin Price Prediction

In 2011, Bitcoin’s price dropped from $32 on the 8 th of August to $2 on the 17 th of November, marking another 94% blow. On the 30 th of November in 2013, it traded for $1166 only to drop down to $170 more than a year later on the 14 th of January, 2015, marking another substantial 85% decrease. Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange in terms of trading volumes, said that the recent decline in Bitcoin’s price is classically normal. Bitcoin, the world’s largest cryptocurrency by market capitalization, has recently reached its’ three-month low. At press time, Bitcoin is trading at the $6,400 level according to CoinMarketCap. Despite the… Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, has reached recently reached its’ three-month low. At press time, Bitcoin was trading at $6,795.30 according to CoinMarketCap, which marks 6.38% decline in the last 24 hours.. Despite the price drop, the CEO of the largest cryptocurrency exchange remains calm, noting that there’s nothing abnormal about the ... Binance CEO: Bitcoin Price Drop is Business as Usual. by admin Posted on June 12, 2018 June 13, 2018. Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange by means of trading volumes, said that the recent decline in Bitcoin’s price is historically normal. Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, has reached recently reached its ... Since June, price correlations between BNB and other top assets have decreased dramatically. Source: CoinMetrics. The Binance exchange opened in July 2017, with founder and CEO Changpeng Zhao at ... Bitcoin Recovers Strength, But Breakthrough Above $ 13,700 . The bitcoin price is up more than 3% and has strengthened with support at $ 13,000 against the US dollar. Bitcoin is now facing strong resistance around the $ 13,650 and $ 13,700 levels. He has already made two attempts to gain strength above $ 13,650, but to no avail. A recent high was formed around $ 13,672 and is currently ... Bitcoin, which quickly recovered from the blow and rose above $ 1,000 in November, was facing another test – at the end of 2013, the People’s Bank of China banned BTC transactions for financial institutions, which led to a natural drop in the price of cryptocurrency, which amounted to more than $300 in a few days. Thanks to the Chinese ban, Bitcoin ended 2013 at $840. If you took a chance on bitcoin early on, just a few years ago, your investment could have paid off in a big way. According to digital-currency website CoinDesk — whose Bitcoin Price Index tracks prices from digital currency exchanges Bitfinex, Bitstamp, Coinbase and itBit — the value of bitcoins was volatile in 2013, particularly toward the end […]

[index] [1258] [15196] [7735] [22926] [22784] [22153] [9881] [5507] [6877] [18247]

Why Did Bitcoin Drop In Price, VPN Necessity, Litecoin Summit, TRON Lunch & No Voice For Me

Facebook Coin Dividends, Crypto Custody, VeChain Hack, Binance Gateways & Bitcoins Wacky Price - Duration: 25:49. The Modern Investor 12,341 views. 25:49 . Make a Living in 1 Hour a Day Trading ... BITCOIN PRICE PLUMMETS TO $3,858 ON COINBASE On Friday morning, many crypto exchanges saw the BTC price tumbling to a daily low at around $3,800, after which it quickly returned to above $4,000 ... #Bitcoin #Crypto #Invest #TheFed #News #Litecoin #Cardano #Ethereum #DigiByte #Litecoin #Invest #Binance #Elastos #PundiX #Tron #IOTA #Ripple #XRP #Starbucks #StellarLumens #Google #Vechain #Bakkt ... Why Did Bitcoin Drop $1700? Price Drop Speculation, Fed Pump, ... Bitcoin + JP Morgan, Binance Surge, Crypto Research, Worst Economic Crash & New Investments - Duration: 31:03. The Modern Investor ... Bitcoin Crash Binance Hack and SEC On March 7 2018 Bitcoin crashed from almost $11,000 down to under $9,600. This crash happened in a matter of minutes, and many are wondering why the Bitcoin ... Future Markets Plummet, Global Recession, Bitcoin Drops $1200, Mt Gox Selloff & Stockpiling Ethereum The Modern Investor. Loading... Unsubscribe from The Modern Investor? Cancel Unsubscribe ... Robert Kiyosaki interview: Blockchain technology, AI, Crypto, Bitcoin BTC Halving 2020 Robert Kiyosaki 58,261 watching Live now BITCOIN VS WORLD DICTATORSHIP + Cypherium Review (Stack vs Register ... Support Me On Patreon! https://www.patreon.com/TheModernInvestor ----- Protect And Sto... 🔄https://twitter.com/sunnydecree/status/1215570057658540032 Bybit $90 Bonus: https://www.bybit.com/app/register?ref=RPyME Bybit Tutorial: https://www.youtu... This video is unavailable. Watch Queue Queue. Watch Queue

#