Posts tagged "fraud"

BitInstant Criminal Complaint Highlights

According to Reuters, “Federal prosecutors in New York announced charges against Charlie Shrem and Robert Faiella, both operators of bitcoin exchange businesses, for attempting to sell $1 million in the digital currency to users of the underground black market website Silk Road, which was shut down by authorities in September.”

The entire complaint can be found here, but we’ve done the dirty work and dug up all the good bits:

CShrem01

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Posted by killhamster - January 27, 2014 at 12:58 pm

Categories: Buttcoin, Captains of Industry, Crime   Tags: , , , , ,

Easy Come, Easy Go

Let’s start the new year off right: with bitcoins! When last we heard from our long-suffering friends, they were waiting for CaVirtEx to complete a transfer to a bank account.

So more stuff on trying to cash out of bitcoins and how “simple” it is.

Virtex responded to my friends ticket, and said yesterday said that the transfer that was fucking requested on the 18th, was cleared. However today my friend’s bank has not received a anything. So he calls them and apparently they can’t deal with this over the phone and will only help him if he puts in a ticket. Even though he pointed out that it takes them a week to respond to tickets.

Also my friend decided to try and just sell 2 of his bitcoins on localbitcoins through their online escrow because apparently people keep telling him e-transfers are safe, because interac e-transfers cannot be reversed! So perfectly safe! Yesterday he accepted an e-transfer and was able to add the money to his account and release the escrow.

Then this morning apparently he was notified by his bank that his account and all associated cards are frozen, and he must come into his local branch and speak to someone. They apparently wouldn’t explain why over the phone. Apparently the person he spoke to had some idea of what bitcoins were (negativeman-55f), and after explaining how he sold them. The guy apparently explained that:

- Selling stuff online and using e-transfer for payment apparently violates some part of interac’s terms of service.
- The e-transfer he accepted was fraudulent so it was reversed (i thought it wasn’t reversible!)
- His account is to be unfrozen but he is permanently banned from ever using e-transfers again

It is funny because all the “low” risk methods of selling on localbitcoins, are terrible that nobody really uses. I love how many people messaged me about how safe localbitcoins are.

Nobody here is shocked in the least. More about the local bitcoin sales and the trustworthy individuals involved with them:

Pretty much all the methods of payment on localbitcoins are ether unsafe, or terrible from what i can tell. The two exceptions are cash (we know how well that worked out), or a cash deposit (pretty massive pain in the ass), which both are pretty inconvient.

However localbitcoins lists some other payment methods, and ranks them on “low”, “medium”, or “high” risk. The low risk includes well known and “trustworthy” payment services like EGOPay, OkPay, and Perfect Money. Ironically there is also Western Union, a service which bitcoiners declared bitcoin will kill off. The funny part is, nobody uses the low risk payment methods really, because they are all a massive pain in the ass.

Pretty much all the people on Localbitcoins (and there really is not very many in Canada, less than 200 including people who have not logged on in a month), want you to use something like e-transfers, wire transfers, paypal, etc. Which are all not safe at all. Since one party can cry fraud and boom, you loose your money and they walk off with the bitcoins. Well obviously the best solution is to let your feedback/reputation dictate if your a scammer or not. I see this everywhere:

quote:
If your LocalBitcoins profile has less than 10 confirmed trades or at least 1 negative feedback then you must send/release Bitcoins first.

quote:
Unless you have a feedback rating of 10 or higher, coins will be sent to me first direct to my receiving address. If you have a feedback of 10 or higher then we may use the escrow system (although I will pay 0.5% more if you send it direct).

quote:
Because of our established credibility, if you have a feedback score below 10 we’ll require the BTC to be sent first, either directly to our receiving address or released via trade request.

emot-smugdog Fuck you pleb, escrow is only for us captains of the industry emot-smugdog

OKPay: Does Localbitcoins even know that OKPay does not allow people to use their service for selling crypto-currencies?

quote:
Please note that due to the card issuer bank restrictions OKPAY Card order and funding becomes impossible if you perform operations related with crypto-currencies or crypto-currencies exchange.

Our financial provider for GBP bank transfers restricts further usage of funds for purchasing or exchanging crypto-currencies.

Link

If you look around there is some nice whining from people that OKPay has cancelled and closed their accounts for selling bitcoins. But you know, its “low risk”.

Perfect Money: A virtual wallet service, that nobody seems to use. You need to make an account, get verified, get the money into your account, then wait 3-5 days for the transaction to be approved they also apparently do not allow you to withdraw all your money in one shot and you must keep a minimum balance of 300$ at all times. Also from what i can gather the only way to send money is by sending someone an e-voucher. There is no way to verify the value of an e-voucher, nor is there a way to reverse it. So of course this means that all the buyers want you to send them the bitcoins first then they will send you the voucher and not disappear. Apparently only 3 people on localbitcoins is willing to use this method.

Ego Pay: Some sort of virtual online wallet service. Requires you to become verified to withdraw money from there. Also there is some really sketchy stuff in their terms and conditions:

quote:
EgoPay reserves the right to terminate accounts that act as unauthorized e-currency exchangers and all of the related accounts.

Would selling bitcoin count as an e-currency exchanger? I don’t know i can’t find a single post about someone using EGOPay. However the single most stupid thing about Ego Pay is:

quote:
EgoPay account holders can withdraw funds from EgoPay by using Payza or e-currency exchangers. Times to complete a withdrawal may vary due to security reasons, please visit our FAQ for current information.

So let me get this straight, Ego Pay doesn’t even let you withdraw money to your bank account. You need to withdraw it to another FUCKING SITE? Don’t forget no fees*(only 2.5% for deposit/withdrawal).

So? Bitcoin -> Localbitcoins -> Ego Pay -> Payza -> Bank -> Fiat

staredog.001

Western Union: Aside from the fact that all of the buyers expect you to be responsible for 7% fee even though they are already paying you much less than the “actual” price (aka whatever exchange has the highest price, bitcoiners claim thats the value of bitcoins). There are only 38 users willing to buy, and only 18 of them have logged into localbitcoins in the last 7 days. Furthermore, some of the buyers will not deal with you for western union UNLESS you send them the coins FIRST. Aka no escrow.

quote:
Unless you have a feedback rating of 10 or higher, coins will be sent to me first direct to my receiving address. If you have a feedback of 10 or higher then we may use the escrow system (although I will pay 0.5% more if you send it direct).

I am sorry i simply cannot trust people on localbitcoins when the entirety of their forum consists of users crying about getting scammed, by people who are supposed to be reputable. I love how bitcoiners dance between “DONT TRUST ANYONE”, to “trust me with your 20,000$ exchange, i swear i won’t scam you cause i have a whole 20 feedback”.

Don’t you guys see how great and simple these “low” risk methods are? Honestly buying and selling bitcoin has never been easier.

Clearly LocalBitcoins could benefit from BitcoinTalk’s big red “SCAMMER” tags. That way you’d know not to send your bitcoins directly to someone’s receiving address before they consider paying you real money for them.

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Posted by killhamster - January 6, 2014 at 8:00 am

Categories: Buttcoin, Crime, Editorial, Featured   Tags: , , , , ,

pirateat40 screwed, Bitcoin is real money as a result

In case you’re not following closely, pirateat40 (AKA Trendon Shavers) has been formally charged by the SEC, and a judge has given the case a green light. The filed a “show cause” that seized Shavers’ assets before trial, and this is his real, unedited response to this action:

 

 

Defendant’s preliminary response to show cause

The court does not have jurisdiction because it is not within the securities law.

1) freezing Defendants’ assets;
It’s ridiculous for the court to freeze my assets that are required to pay rent, utilities, food, etc and be able to pay for an attorney. My wife does not work and cares for our two children.

2) directing Defendants to provide verified accountings to the Commission;
The court has no authority to order this because it is not within the jurisdiction and does not show a need for it.

3) authorizing expedited discovery concerning the location and extent of Defendants’assets;
Three days is too short and there is no reason for it based on other orders. This should be revised based and agreed to.

Have we mentioned he is appearing pro se in court? This should be amazing.

In his ruling, judge Amos Mazzant made the mistake of saying “It is clear that Bitcoin can be used as money” and bitcoiners have taken this to mean that the US court system, along with the rest of the world governments, have declared Bitcoin to be a real currency that will soon destroy the US Dollar, Euro, various Pesos, and so on. Some have simplified it to the point that they are just shouting “Bitcoin is MONEY” at no one in particular.

 

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Posted by killhamster - August 8, 2013 at 10:32 am

Categories: Buttcoin   Tags: , , , , , ,

pirateat40 Charged by the SEC

Every bitcoiner’s favorite scam artist, the venerable pirateat40, has been formally charged with defrauding people with… a Ponzi scheme! Shocking news, bitcoins being involved with a Ponzi scheme, but here it is, laid out by the evil feds, who are OK this time since they’re punishing the wicked instead of holding down captains of industry.

Washington D.C., July 23, 2013 — The Securities and Exchange Commission today charged a Texas man and his company with defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online.

The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.” Shavers raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold. Today the value of 700,000 Bitcoin exceeds $60 million.

The SEC alleges that Shavers promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin “off the radar” in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments. Shavers also diverted investors’ Bitcoin for day trading in his account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses.

The SEC issued an investor alert today warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet.

“Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Shavers preyed on investors in an online forum by claiming his investments carried no risk and huge profits for them while his true intentions were rooted in nothing more than personal greed.”

According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Texas, Shavers sold BTCST investments over the Internet to investors in such states as Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania. Shavers posted general solicitations on a website dedicated to Bitcoin discussions, and he misled investors with such false assurances about his investment opportunity as “It’s growing, it’s growing!” and “I have yet to come close to taking a loss on any deal,” and “risk is almost 0.” Contrary to the representations made to investors, BTCST was not in the business of buying and selling Bitcoin at all.

The SEC alleges that Shavers, who lives in McKinney, Texas, paid 507,148 Bitcoin in investor withdrawals and purported interest payments. He transferred at least 150,649 Bitcoin to his personal account at an online Bitcoin currency exchange. Shavers suffered a net loss from his day trading, but realized net proceeds of $164,758 from his sales of 86,202 Bitcoin. Shavers transferred $147,102 from his personal account at the online Bitcoin currency exchange to accounts he controlled at an online payment processor as well as his personal checking account. He used this money to pay his rent, utilities, and car-related expenses as well as for food and retail purchases and gambling.

The SEC’s complaint charges Shavers and BTCST with offering and selling investments in violation of the anti-fraud and registration provisions of the securities laws, specifically Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5. The SEC is seeking a court order to freeze the assets of Shavers and BTCST in addition to other relief, including permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.

The SEC’s investor alert, prepared by the agency’s Office of Investor Education and Advocacy, recommends that investors be wary of so-called investment opportunities that promise high rates of return with little or no risk, especially when dealing with unregistered, Internet-based investments sold by unlicensed promoters.

“Ponzi scheme operators often claim to have a tie to a new and emerging technology as a lure to potential victims,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy. “Investors should understand that regardless of the type of investment, a promise of high returns with little or no risk is a classic warning sign of fraud.”

I hate to say we told you so, but we told you so.

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Posted by killhamster - July 23, 2013 at 9:42 am

Categories: Buttcoin   Tags: , , , , , ,

Bitcoin24 circles the drain

In case you haven’t heard the news, German Polish buttcoin exchange Bitcoin24 is no longer operating, due to “The Polish authority” closing their bank account in Poland.

BTC24Before we proceed, let’s take a moment to look at Bitcoin24′s long and untarnished history. Founded in May of 2012, Bitcoin24 was allegedly the largest buttcoin exchange in Europe, with only the mighty Mt. Gox surpassing it in terms of volume and profit. Apparently they also surpass the Magic: the Gathering Online Exchange in terms of utter incompetence and hilarity. Recently, people found the admins asking questions on StackOverflow about how MySQL works and how to round numbers when working with financial data.

This was followed by the site’s trading engine shitting the bed and started to give people more money or bitcoins than they deserved, like a faulty ATM spitting torrents of cash into the street. It then broke down even further, with trades randomly appearing and disappearing before the site’s functionality went down entirely.

A few days ago, the site made the above announcement, in even more broken English. Today, we find this PDF, outlining the following (thanks to SA forums goon Greyhawk for the translation):

Oh, boy. So first thing this is a very, very bad translation from Polish into German. Very bad. Half of it doesn’t even make sense.

But the gist of it is:
- The German prosecution knows everything there is to know about bitcoin-24 right from when they began operating. And I do mean everything. Current bank accounts, old bank accounts. Who the money was coming from, who it was going to. Everything. In total over 500000 Euro were transferred via these accounts mostly from Germany towards Poland, Romania and Bulgaria
- German prosecution sees bitcoin-24 as a massive money laundering operation and are proceeding against the owner
- German prosecution has evidence that the owner is involved in phishing attacks and is proceeding against him about that too. Apparently the owner was retarded enough to send the “pure profit” of those attacks to the polish bitcoin24 bank account.

Furthermore, we find that his home was raided and he is no longer free.

jail

Meanwhile, MtGOX is suffering from yet another “DDoS” and having a slew of issues with banks and Bitfloor is gone again. Just another day in the life of the currency of the future!

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Posted by killhamster - April 18, 2013 at 11:43 am

Categories: Buttcoin   Tags: , , ,

Known haven for pedophiles, racists, and misogynists now accepting Bitcoin as payment for subscriptions

Reddit, bastion of free speech (as long as it’s speech with which they agree,) is now accepting payment for their pointless “Reddit Gold” service through Buttcoin processor Coinbase.

Of course, reddit CEO Yishan Wong has clarified that they don’t really accept buttcoins, but instead rely on another company to convert them into real money that a major company can use and report on tax records.

Inquiries on when reddit will be accepting Monopoly bills, chocolate coins, and replica Confederate dollars have gone unanswered.

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Posted by killhamster - February 14, 2013 at 4:15 pm

Categories: Buttcoin   Tags: , , ,

bASIC overheats, releases magic smoke

Last night Tom from bASIC, “Next generation Bitcoin mining hardware” built in his garage, blew a gasket:

these type of threads are BULLSHIT

we have always honored our refund requests but a thread like this basically just kills my business

Ask yourself this question:

Do you want a nice friendly refund as we have been giving or do you want to completely put me out of business?

because if you completely put me out of business than you are going to have to come to NY to take me to small claims court.

ask yourself this question, do you really want to come to NY to take me to small claims court? or do you just want to wait your turn and quietly get your requested refund as hundreds of people already have. Keep with the mob mentality its only going to keep you separated from your money longer.

this thread is bad for anyone seeking a refund, and the mods need to take notice and remove threads such as this.

HELLO CUSTOMERS
this is not good for you. Please stop.

im reporting this to the mods myself – I encourage others to do the same.

-Tom

This occurred throughout multiple threads on the Bitcointalk forums.

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Posted by killhamster - January 23, 2013 at 10:38 am

Categories: Buttcoin   Tags: , , , , ,

Can my imaginary currency loss claim real tax dollars?

bitcoin-tax-question

 

I lost a buttload on my fake money, can the US government bail me out with real tax dollars?

 

Oh, the irony.

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Posted by Buttcoin - January 21, 2013 at 12:33 pm

Categories: Buttcoin   Tags: , , , , , ,

Has Bruce Wagner pulled off the biggest financial scam on the bitcoin community? UPDATE2 (A long fucking post.)

Bruce Wagner is the host of OnlyOneTV and the organizer of the Buttcoin Conference, and he’s a bit of a character. He seems to hate women and blames them for being victims of rape. He had vehemently advocated moving the buttcoin conference to Pattaya, Thailand, which just so happens to be the underage prostitution capitol of the world. Hell, he’s even posted about tips on how to pickup boys for sex.

But Bruce is also a convicted scammer and con man. He’s even fled the state and still owes thousands of dollars in outstanding debts and restitution. He’s had a mortgage fraud scheme backfire on him and been estimated to have stolen over a million dollars from people losing their homes in foreclosure.

And he may have pulled off one of the most successful scams on the buttcoin community.

 

Mah Bit Con!

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Posted by Buttcoin - August 31, 2011 at 8:00 am

Categories: Buttcoin, Captains of Industry, Editorial, Featured   Tags: , , , , , , , , , , , ,

Users are revolting, want to find Mt. Gox owners to “sort something out”.

Uh-oh, looks like all the buttcoin miners with hundreds of bitcoins and thousands of dollars trapped in Mt. Gox aren’t happy with the endless delays and the murmurs of them waiting until the weekend to close up shop, take take the money and run.

At least one guy is being pro-active about the sitution.

yous gots some problems, see?

Looks like someone’s gonna get got.

Forums member c-rock can read between the lines though.

offer he can't refuse

This is going to get real ugly real fast folks.

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Posted by Buttcoin - June 24, 2011 at 10:13 pm

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