Finland is looking to hire a broker to sell 1,981 bitcoins seized in drug bust

A Bitcoin ATM machine, to buy or sell cryptocurrencies, is placed within a safety cage on January 29, 2021 in Barcelona, Spain.
A bitcoin ATM machine in Barcelona, Spain.

  • Finland is looking for a broker to sell 1,981 bitcoins seized in drug busts, Bloomberg reported.
  • The bitcoins, worth around $79 million at time of publication, are currently with Finnish Customs.
  • Hiring a broker, the government said, will allow for the safe and reliable selling of cryptocurrencies.
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Finland is looking to hire a broker to sell 1,981 bitcoins seized in drug busts to convert them into hard currency, Bloomberg first reported.

The bitcoins, worth around $79 million at time of publications, are currently with Finnish Customs.

According to Pekka Pylkkanen, the authority’s director of financial management, a broker will ensure the safe and reliable selling of cryptocurrencies.

The country’s customs authority is expecting to sign up to three brokers for a two-year agreement valued at roughly €250,000 ($297,000) and could reach as much as €2 million in the event of more seizures, Bloomberg reported. The range takes into consideration the volatile price movement of the assets.

Most of the seized bitcoins (1,666 out of 1,981) were confiscated in 2016 after the arrest of Finnish drug dealer Douppikauppa, according to The Block. The government, at that time, told authorities they were prohibited from storing the coins on virtual currency exchanges and must keep them off digital platforms.

The customs authority was reportedly looking to sell as early as 2018 but feared this might fall into the hands of criminals yet again, The Block reported.

The rocketing price of bitcoin, however, seems to have prompted Finnish authorities to liquidate.

Multiple countries in recent years have sold cryptocurrencies seized during criminal investigations with the US first taking the step in 2014.

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The Justice Department sentenced a Swedish man to 15 years in prison for a $16 million crypto-fraud scheme

DOJ
Brian Netter, a lawyer for the women’s soccer team in an equal pay case, will be a top defender of Biden policies at the Justice Department.

  • A Swedish man was sentenced to 15 years in prison for swindling $16 million from victims in a crypto scheme.
  • Roger Nils-Jonas Karlsson, 47, ran an investment fraud scheme from 2011 until 2019 from Thailand.
  • He lured victims to purchase shares from his company using cryptocurrencies but transferred the funds directly to his personal account.
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A Swedish national was sentenced to 15 years in prison after swindling thousands of victims out of more than $16 million in a cryptocurrency fraud, the Department of Justice said in a statement Thursday.

Roger Nils-Jonas Karlsson was arrested on June 17, 2019 in Thailand and was extradited to the US. He pleaded guilty on March 4, 2021.

According to the DOJ, the 47-year-old ran an investment fraud scheme from 2011 to 2019.

His scheme involved convincing victims to purchase shares of his company, Eastern Metal Securities, using cryptocurrencies such as bitcoin and promising them “astronomical returns” tied to the price of gold.

Karlsson used his website to lure potential investors to purchase shares of less than $100 a piece with an eventual payout of 1.15 kilograms of gold per share. On January 2, 2019, gold was worth more than $45,000 per kilogram.

Karlsson – known by several aliases including Steve Heyden, Euclid Deodoris, Joshua Millard, Lars Georgsson, Paramon Larasoft, and Kenth Westerberg – would then wire the funds provided by the victims to his personal bank accounts, which he used to fund his lavish lifestyle. This included snapping up expensive homes, a racehorse, and a resort in Thailand.

Karlsson’s fraud targeted financially insecure investors, the department said, causing many of them severe financial hardship.

The scheme, however, was not over once the funds were transferred.

To prolong his fraud, Karlsson would even update his victims with the state of their assets. In one instance, when he was trying to explain payout delays, he said he was working with the Securities and Exchange Commission.

As part of the sentence, Karlsson was ordered to forfeit his resort and other properties and accounts. He also issued a money judgment in the amount of $16,263,820.

The US is now seeking restitution on behalf of his victims.

Cryptocurrency fraud schemes have been on the rise ever since digital assets exploded in popularity in recent years. Fraudsters have also become creative in the ways they swindle people.

Some instances included fraudulent cryptocurrency domain registrations, blockchain scams, and criminals impersonating Elon Musk.

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Crypto scams are preying on vulnerable people, as cases surge. Many victims are deceived online, including an elderly woman who lost thousands.

A pile of bitcoin cryptocurrencies is seen.
Bitcoin scams are becoming more common.

Cryptocurrency scams are on the rise, with victims often being tricked out of thousands of dollars.

This is backed up by recent data from the FTC, which shows that since October 2020, consumers have reported losing more than $80 million to cryptocurrency scams. This represents an increase of more than ten-fold year-on-year.

In one such case, a 77-year-old woman lost more than $12,000 after being lured into a bitcoin scam, Chicago Tribune reported. The incident occurred after the Indiana-based woman received an email alert last month claiming to warn her of fraudulent activity on her PayPal account.

She was advised to buy $3,500 in bitcoin on the cryptocurrency trading platform, Coinbase, and was later instructed to share her bank information, the outlet reported. This led to six withdrawals totaling $8,800 and the scammer eventually stealing over $12,000 from her.

The incident forms part of a recent surge in cryptocurrency-related scams or accusations of wrongdoing.

On Thursday, members of esports organization FaZe Clan were suspended following allegations that their Save the Children cryptocurrency may have been a scam, per Insider’s Steven Asarch.

Kotatku reported that tons of fans “pumped money into this scheme, believing their investment was protected by the high profile of those endorsing it, only to see their money disappear almost overnight.”

“FaZe Clan had absolutely no involvement with our members’ activity in the cryptocurrency space and we strongly condemn their recent behavior,” a statement posted on Twitter by FaZe Clan said.

In another incident, an online dating user became embroiled in a cryptocurrency scam that lost him £20,000 in May, The Guardian reported on Saturday. The user, who was given the pseudonym James Evans by the outlet, said he had felt like he built a “genuine connection” with a man on Grindr but soon became aware he was manipulated into a scam.

Crypto scammers often go to great lengths to lure their victims. In the Indiana case, Chicago Tribune reported that the woman received an email that stated almost $500 had been drawn out of her account and that she would need to call a specific number to rectify the issue.

Once she was on the line, a man convinced her to invest in the currency. He offered to walk the woman through the complicated purchase by accessing her phone via a screen-sharing facility.

Upon instruction, she shared her bank information and even provided the scammer with a state photo ID of herself.

“It does seem that at a certain age, too many people can be susceptible to these type of scams,” Chesterton Police Sergeant Dave Virijevich told the Chicago Tribune. “These types of criminals prey on the genuine goodness of people. They’re preying on their trusting nature,” he added.

Eventually, her bank helped the woman retrieve a small fraction -$2,000 – of the money she had lost.

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South African regulator says it’s powerless over suspected $3.6 billion bitcoin scam, as crypto is out of its reach

Bitcoin Bubble
Bitcoin replica coins are seen on November 13, 2017

  • South Africa’s regulator said it’s powerless to act on a suspected $3.6 billion bitcoin scam.
  • Two brothers who founded Africrypt appear to have gone missing, along with bitcoin worth billions.
  • South Africa’s FSCA said the company appears to be a Ponzi scheme designed to defraud investors.
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South Africa’s financial services regulator has said it can’t take any action over a suspected scam that lawyers say has caused as much as $3.6 billion worth of bitcoin to go missing.

The country’s Financial Sector Conduct Authority said Thursday that Africrypt, the company linked to the lost holdings, looks like a Ponzi scheme set up to defraud investors.

Yet the FSCA said that as cryptocurrencies are not regulated financial products or services in South Africa, it is powerless to do anything in this case.

“At this stage we have only found evidence of crypto asset transactions,” it said in a statement. “Currently crypto assets are not regulated in terms of any financial sector law in South Africa and consequently the FSCA is not in a position to take any regulatory action.”

Africrypt was created by brothers Ameer and Raees Cajee in 2019, and based in Johannesburg in South Africa.

According to a police statement seen by Bloomberg, the company promised high returns of up to five times principal investments.

Yet Hanekom Attorneys, the lawyers for the affected investors, now say that the brothers – and as much as $3.6 billion of bitcoin – have vanished, in what they describe as a “heist”. Insider was unable to contact the crypto company, whose website is down.

The FSCA said: “This entity was offering exceptionally high and unrealistic returns akin to those offered by unlawful investment schemes commonly known as Ponzi’s.”

“The public is urged to understand that unrealistically high returns suggests that the investment scheme is likely to be fraudulent,” it added.

Africrypt’s apparent closure, and the inability of regulators to deal with it, raises fresh concerns about the safety of cryptocurrency investments around the world.

Crypto markets are currently largely unregulated. Watchdogs have routinely warned that investors should be prepared to lose all their money.

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Two South African brothers have vanished with $3.6 billion of bitcoin in what could be the biggest crypto heist in history

Bitcoin golden physical coin illustration on dark black background with reflection.

Two South African brothers recently vanished with $3.6 billion worth of bitcoin in what could potentially be the biggest cryptocurrency heist in history.

Local media, including Independent Online and ITWeb, were the first to report on the case.

In 2019, Ameer Cajee and his younger brother, Raees Cajee, founded crypto investment app Africrypt.

Not long after, the siblings, along with 69,000 bitcoins worth roughly $4 billion at their April peak, are nowhere to be found.

It all began in April when Ameer, who is the company’s chief operating officer, informed their clients that Africrypt was hacked, compromising their accounts, wallets, and nodes.

In an unusual step, 20-year-old Ameer told them not to report the incident to authorities as this would impede attempts to recover the funds.

A few suspicious customers, however, did report the hack. They contacted Hanekom Attorneys, according to Independent Online, who then tried to track the brothers down. When unsuccessful, Hawks, a police unit in South Africa that targets crime and corruption, was looped in.

“We were immediately suspicious as the announcement implored investors not to take legal action,” Hanekom Attorneys told Bloomberg over email. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”

The lawyers also told cryptocurrency exchanges around the world to sound an alarm if they noticed any suspicious conversion of coins.

FNB, which banked Africrypt, has also been questioned about the episode, according to documents seen by Independent Online. The local bank denied any involvement.

“FNB once again confirms that it does not have a banking relationship with Africrypt. Due to client confidentiality, FNB cannot provide any information on specific bank accounts,” Nadiah Maharaj, FNB risk spokesperson, told Independent Online.

As the brothers remain missing, some efforts to get to the bottom of things have hit roadblocks.

For instance, South Africa’s Finance Sector Conduct Authority, the country’s financial institutions regulator, said cryptocurrency-related matters do not fall under its jurisdiction, Independent Online reported.

Crimes involving crypto are a growing cause of concern for regulators and companies.

Most recently, the Bank for International Settlement criticized the digital asset for its role in illegal activities.

“By now, it is clear that cryptocurrencies are speculative assets rather than money, and in many cases are used to facilitate money laundering, ransomware attacks, and other financial crimes” BIS said.

US Treasury Secretary Janet Yellen, meanwhile, has also been a vocal critic of cryptocurrencies.

“To the extent it is used, I fear it’s often for illicit finance,” she said in February. “I do worry about potential losses that investors can suffer.”

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