A California politician has become embroiled in a growing controversy surrounding an investment company, an alternative digital currency and investors who say they’ve been duped. According to reports by The Pasadena Star-News, state and federal regulators are investigating US Fine Investment Arts Inc (USFIA), a company backing a digital currency called Gemcoin. The Los Angeles Times reports that the US Federal Bureau of Investigation (FBI) is also speaking with investors who have accused the company of running a scam. An official with the California Department of Business Oversight confirmed that an investigation was underway, the Star-News reported, but declined to comment further. As a result of the growing controversy, Arcadia City Councilman John Wuo – who…
BitPay has filed suit against a Massachusetts insurance company after losing $1.8m during a phishing attack last December. According to documents obtained by the Atlanta Business Chronicle, the bitcoin payment processor was defrauded in mid-December by an unknown individual posing as BTC Media CEO David Bailey, whose computer was infiltrated prior to the attack. The attacker subsequently obtained email credentials for BitPay CFO Bryan Krohn, which were then used to prompt CEO Stephen Pair and executive chairman Tony Gallippi to authorize three payments totalling 5,000 BTC on 11th and 12th December, including one transaction from a wallet on the bitcoin exchange Bitstamp. BitPay filed a claim for the losses days after the event with Massachusetts Bay Insurance…
A judge has sentenced Florida LocalBitcoins user Pascal Reid to serves 90 days in jail in a ruling that closes a high-profile legal case dating back to February 2014. Originally charged with operating an unauthorized money transmission business and with money laundering, Reid plead guilty to a single count of operating as an unlicensed money transmitter. Reid will receive five years probation and must provide informational assistance to law enforcement and financial entities about bitcoin and digital currencies. As part of the deal, Reid has been tasked with completing “no less than 20 trainings” on digital currency and cybercrime, to be organized by Detective Ricardo Arias of the City of Miami Beach Police Department. Reid is also required to make…
Recent court documents show that one of the operators of bitcoin exchange Coin.mx is involved in discussions on a possible plea deal with US prosecutors. Assistant US Attorney Eun Young Choi asked the US District Court for the Southern District of New York last week to grant a 30-day continuance “to engage in further discussions with counsel about the disposition of the case” with defendant Anthony Murgio. Murgio was one of two Coin.mx employees arrested earlier this summer and later accused of money laundering and operating an illegal money services business out of Florida. The court granted the continuance, which will be in effect until 9th October. According to Bloomberg, Murgio is also suspected of being involved in a cyberattack on JPMorgan Chase last year…
Mark Karpeles, the CEO of failed bitcoin exchange Mt Gox, has been charged with embezzlement by Japanese prosecutors. Reports suggest Karpeles remains in the custody of Japanese police but has the option to request his release from the court while he awaits trial. The news comes after Karpeles was re-arrested in Tokyo at the end of August on allegations that he had embezzled ¥321m ($2.6m) from the company to fund his own personal projects. Karpeles was first arrested in Tokyo on 1st August amid allegations that he had manipulated volume on the now defunct bitcoin exchange. CrimeMark KarpelesMt…
The extortion group known as DD4BC has stepped up the number of attacks this year and is now targeting the financial services industry, according to a new report. Akamai Technologies, a content delivery network and cloud services provider which produced the report, has identified 114 attacks carried out by DD4BC since April 2015. Stuart Scholly, senior vice president and general manager at Akamai’s security division, said in a statement: “DD4BC has been using the threat of DDoS attacks to secure bitcoin payments from its victims for protection against future attacks … The latest attacks – focused primarily on the financial service industry – involved new strategies and tactics intended to harass, extort and ultimately embarrass the victim…