Crypto

FBI created a crypto token so it could watch it being abused

Published

2 hours ago

October 11, 2024

FBI created a crypto token so it could watch it being abused

The FBI created its own cryptocurrency so it could watch suspected fraudsters use it – an idea that worked so well it produced arrests in three countries.

News of the Feds’ currency, an Ethereum-based instrument named NexFundAI, appeared in a Wednesday Department of Justice announcement that eighteen individuals have been charged “for widespread fraud and manipulation in the cryptocurrency markets.”

The Feds allege some of the fraud involved “wash trades” – transactions conducted solely to increase the volume of trades in a security or other asset. Rising volumes of trades are often seen as an indicator that a stock is of increasing interest as it has good growth prospects – a signal that can see prices rise. But wash trades are often conducted by related entities, or even the same entity, to create a false market signal – an arrangement also known as “pump and dump.”

Or, as the US Securities and Exchange Commission put it, the alleged schemes are “intended to induce investor victims to purchase the crypto assets by creating the false appearance of an active trading market for them.”

Whatever you call this behavior, those behind it hope it will see an asset’s price rise beyond what they paid for it. They then sell their own holdings for a profit.

One of the orgs in this case, called Saitama, created its own tokens. Company leadership “allegedly made a variety of false public statements, including that Saitama’s business plan had been reviewed by regulators, that its leadership was not selling the Saitama tokens they owned, and that the Saitama token was coded in a way that prevented market manipulation.”

But charging documents alleged that “in reality Saitama’s leadership was actively manipulating the market for the Saitama token and secretly selling their Saitama tokens for tens of millions in profits.”

That concept – a paper corporation that creates and promotes its own cryptocurrency – was adopted by the FBI, which created a company and coin named NexFundAI.

The DoJ alleges the accused conspired to wash trade on behalf of NexFundAI – but of course the Feds were in a privileged position to watch everything.

“The FBI took the unprecedented step of creating its very own cryptocurrency token and company to identify, disrupt, and bring these alleged fraudsters to justice,” said Jodi Cohen, special agent in charge of FBI’s Boston Division.

“What the FBI uncovered in this case is essentially a new twist to old-school financial crime,” he added.

And because they’re old-school crimes, the US Securities and Exchange Commission has announced charges against five “crypto asset promoters.”

“Today’s enforcement actions demonstrate, once more, that retail investors are being victimized by fraudulent activity by institutional actors in the markets for crypto assets,” explained Sanjay Wadhwa, deputy director of the SEC’s Division of Enforcement. “With purported promoters and self-anointed market makers teaming up to target the investing public with false promises of profits in the crypto markets, investors should be mindful that the deck may be stacked against them.”

Arrests of those allegedly involved in these schemes were made in the UK, Portugal, and Texas this week. Four defendants have already plead guilty, and another intends to. ®

Crypto

The FBI made a cryptocurrency to catch scammers

Published

11 hours ago

October 10, 2024

Press Room

The FBI made a cryptocurrency to catch scammers

Illustration: franckreporter (Getty Images)

In This Story

U.S. authorities are cracking down on crypto scammers by turning their own tactics against them. For the first time, the Federal Bureau of Investigation has disclosed that it created a cryptocurrency to bait and capture fraudsters.

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The FBI claims the strategy worked, spurring market-manipulation and fraud charges against several crypto companies, including Gotbit, CLS Global, MyTrade, and ZM Quant, as well as 18 individuals. The agency says it seized more than $25 million in crypto, and several trading bots that were allegedly manipulating around 60 cryptocurrencies were shut down.

“What the FBI uncovered in this case is essentially a new twist to old-school financial crime,” said Jodi Cohen, the special agent in charge of the FBI’s Boston division.

As part of “Operation Token Mirrors,” the FBI created an Ethereum-based (ETH) cryptocurrency called NexFundAI Token to target fraudulent token developers, promoters, and market makers. The defendants allegedly lured investors with false claims and engaged in wash trading, a deceptive practice where trades are made to create the illusion of heightened market activity and demand. The manipulation inflated token prices, allowing the scammers to sell their holdings at artificially elevated prices. These market manipulators were unaware that the FBI created the token as part of the sting operation.

“This investigation, the first of its kind, identified numerous fraudsters in the cryptocurrency industry. Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception,” said Acting U.S. Attorney Joshua Levy. The news comes more than two years after the FBI announced the formation of a cryptocurrency unit within the agency.

The Securities & Exchange Commission has also filed civil complaints against Gotbit, CLS, ZM Quant, Saitama, and other companies, accusing them of securities law violations. NexFundAI token trading has been disabled, but its price was up by over 1,558% when fraudsters were active.

Crypto

Discover Smart Crypto Gaming With Fairspin: Rich Bonuses, Top Features and Passive Income Streams – Press release Bitcoin News

Published

21 hours ago

October 10, 2024

Press Room

PRESS RELEASE. Fairspin Casino is revolutionizing the online gaming landscape with its innovative approach to cryptocurrency gambling. Since its inception, Fairspin has become one of the most innovative crypto gaming hubs globally. With over 9,400 options to bet, blockchain transparency, a myriad of lucrative bonuses, and passive income opportunities, the platform represents the best all-in-one […]

Crypto

Cryptocurrency exchange introduces privacy coins and decentralized finance solutions to enhance user privacy and digital asset protection.

Published

1 day ago

October 10, 2024

Press Room

Cryptocurrency exchange introduces privacy coins and decentralized finance solutions to enhance user privacy and digital asset protection.

Beta Global Finance, a prominent cryptocurrency exchange, has launched a series of innovative products aimed at improving user privacy and enhancing the security of its digital financial services. These new offerings include advanced privacy coins and decentralized finance (DeFi) solutions, developed to meet the rising demand for secure, private, and efficient digital transactions. With its focus on driving innovation in the global financial ecosystem, Beta Global Finance continues to introduce cutting-edge services to protect users’ digital assets and safeguard sensitive information.

Reinforcing Privacy in Digital Transactions

Founded in 2014, Beta Global Finance has built a strong reputation for providing secure and efficient digital asset trading services across its global platform. With the integration of privacy coins, the exchange has taken a significant step toward ensuring that users can protect their financial transactions and personal data. Privacy coins like Monero and Zcash have been incorporated into the platform, allowing users to perform transactions with enhanced anonymity and confidentiality. These coins utilize advanced technologies such as zero-knowledge proofs and ring signatures, which prevent tracking and ensure that transaction details remain private.

In an increasingly interconnected world, protecting personal information is one of the most pressing concerns for users of digital currencies. Traditional cryptocurrencies often expose transaction data to public scrutiny, leaving sensitive information vulnerable. Privacy coins address this issue by concealing the identities of the parties involved in transactions, offering an additional layer of protection for users. This is particularly valuable for those conducting high-value transactions or operating in regions where privacy is essential.

Expanding Decentralized Finance Offerings

In addition to the introduction of privacy coins, Beta Global Finance has also expanded its decentralized finance services. The company has introduced BetaLend, a decentralized platform that enables users to borrow and lend digital assets without relying on intermediaries, enhancing the efficiency and security of financial transactions. The platform, currently in its testing phase, offers users the opportunity to engage in lending and borrowing activities with greater autonomy and control.

Another significant addition to Beta Global Finance’s portfolio is BetaStake, a staking service that allows users to earn rewards by staking Betacoin, the company’s native cryptocurrency. Users can participate in network governance and generate passive income by contributing to the security and functionality of the network. These DeFi services reflect the growing trend toward decentralized solutions in the digital finance space, offering users more control over their assets and financial interactions.

Enterprise Solutions and Security Enhancements

Beta Global Finance is also focused on delivering blockchain solutions for enterprises through its proprietary platform, BetaChain Solutions. The company provides consulting and development services to help organizations integrate decentralized technologies into their operations. These solutions are designed to improve transparency and efficiency in areas such as secure data sharing and supply chain management.

Security remains a top priority for Beta Global Finance, with the company implementing multiple layers of protection for its users. The platform’s trading engine is built to process millions of transactions per second, ensuring low-latency and efficient trading. Additionally, the platform utilizes state-of-the-art encryption technologies, including cold wallet storage for safeguarding digital assets, biometric verification, and two-factor authentication (2FA), ensuring users’ funds and data remain secure.

Future Developments and Commitment to Innovation

Looking ahead, Beta Global Finance is preparing to expand its services with the development of BetaWallet and BetaPay. BetaWallet will serve as a secure digital wallet for storing multiple cryptocurrencies, while BetaPay will provide a blockchain-based payment gateway for online and offline merchants. These services are expected to further enhance the company’s offerings and provide users with additional tools for managing and utilizing their digital assets securely.

Beta Global Finance’s continued focus on innovation and security solidifies its position as a leader in the digital finance sector. The introduction of privacy coins, decentralized finance solutions, and enterprise blockchain services underscores the company’s commitment to delivering secure, user-centric solutions. As the digital asset market continues to evolve, Beta Global Finance’s new products reflect its dedication to promoting privacy, security, and efficiency in the global financial ecosystem.