Bitmex CEO Hayes Steps Down Following U.S. Criminal Charges

Bitcoin Exchange CEO Charlie Shrem Arrested on Money Laundering Charge

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Bitcoin Exchange CEO Charlie Shrem Arrested on Money Laundering Charge

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Meet Brock Pierce, the Presidential Candidate With Ties to Pedophiles Who Wants to End Human Trafficking

thedailybeast.com | Sep. 20, 2020.
The “Mighty Ducks” actor is running for president. He clears the air (sort of) to Tarpley Hitt about his ties to Jeffrey Epstein and more.
In the trailer for First Kid, the forgettable 1996 comedy about a Secret Service agent assigned to protect the president’s son, the title character, played by a teenage Brock Pierce, describes himself as “definitely the most powerful kid in the universe.” Now, the former child star is running to be the most powerful man in the world, as an Independent candidate for President of the United States.
Before First Kid, the Minnesota-born actor secured roles in a series of PG-rated comedies, playing a young Emilio Estevez in The Mighty Ducks, before graduating to smaller parts in movies like Problem Child 3: Junior in Love. When his screen time shrunk, Pierce retired from acting for a real executive role: co-founding the video production start-up Digital Entertainment Network (DEN) alongside businessman Marc Collins-Rector. At age 17, Pierce served as its vice president, taking in a base salary of $250,000.
DEN became “the poster child for dot-com excesses,” raising more than $60 million in seed investments and plotting a $75 million IPO. But it turned into a shorthand for something else when, in October of 1999, the three co-founders suddenly resigned. That month, a New Jersey man filed a lawsuit alleging Collins-Rector had molested him for three years beginning when he was 13 years old. The following summer, three teens filed a sexual-abuse lawsuit against Pierce, Collins-Rector, and their third co-founder, Chad Shackley. The plaintiffs later dropped their case against Pierce (he made a payment of $21,600 to one of their lawyers) and Shackley. But after a federal grand jury indicted Collins-Rector on criminal charges in 2000, the DEN founders left the country. When Interpol arrested them in 2002, they said they had confiscated “guns, machetes, and child pornography” from the trio’s beach villa in Spain.
While abroad, Pierce had pivoted to a new venture: Internet Gaming Entertainment, which sold virtual accessories in multiplayer online role-playing games to those desperate to pay, as one Wired reporter put it, “as much as $1,800 for an eight-piece suit of Skyshatter chain mail” rather than earn it in the games themselves. In 2005, a 25-year-old Pierce hired then-Goldman Sachs banker Steve Bannon—just before he would co-found Breitbart News. Two years later, after a World of Warcraft player sued the company for “diminishing” the fun of the game, Steve Bannon replaced Pierce as CEO.
Collins-Rector eventually pleaded guilty to eight charges of child enticement and registered as a sex offender. In the years that followed, Pierce waded into the gonzo economy of cryptocurrencies, where he overlapped more than once with Jeffrey Epstein, and counseled him on crypto. In that world, he founded Tether, a cryptocurrency that bills itself as a “stablecoin,” because its value is allegedly tied to the U.S. dollar, and the blockchain software company Block.one. Like his earlier businesses, Pierce’s crypto projects see-sawed between massive investments and curious deals. When Block.one announced a smart contract software called EOS.IO, the company raised $4 billion almost overnight, setting an all-time record before the product even launched. The Securities and Exchange Commission later fined the company $24 million for violating federal securities law. After John Oliver mocked the ordeal, calling Pierce a “sleepy, creepy cowboy,” Block.one fired him. Tether, meanwhile, is currently under investigation by the New York Attorney General for possible fraud.
On July 4, Pierce announced his candidacy for president. His campaign surrogates include a former Cambridge Analytica director and the singer Akon, who recently doubled down on developing an anonymously funded, $6 billion “Wakanda-like” metropolis in Senegal called Akon City. Pierce claims to be bipartisan, and from the 11 paragraphs on the “Policy” section of his website it can be hard to determine where he falls on the political spectrum. He supports legalizing marijuana and abolishing private prisons, but avoids the phrase “climate change.” He wants to end “human trafficking.” His proposal to end police brutality: body cams.
His political contributions tell a more one-sided story. Pierce’s sole Democratic contribution went to the short-lived congressional run of crypto candidate Brian Forde. The rest went to Republican campaigns like Marco Rubio, Rick Perry, John McCain, and the National Right to Life Political Action Committee. Last year alone, Pierce gave over $44,000 to the Republican National Committee and more than $55,000 to Trump’s re-election fund.
Pierce spoke to The Daily Beast from his tour bus and again over email. Those conversations have been combined and edited for clarity.
You’re announcing your presidential candidacy somewhat late, and historically, third-party candidates haven’t had the best luck with the executive office. If you don’t have a strong path to the White House, what do you want out of the race?
I announced on July 4, which I think is quite an auspicious date for an Independent candidate, hoping to bring independence to this country. There’s a lot of things that I can do. One is: I’m 39 years old. I turn 40 in November. So I’ve got time on my side. Whatever happens in this election cycle, I’m laying the groundwork for the future. The overall mission is to create a third major party—not another third party—a third major party in this country. I think that is what America needs most. George Washington in his closing address warned us about the threat of political parties. John Adams and the other founding fathers—their fear for our future was two political parties becoming dominant. And look at where we are. We were warned.
I believe, having studied systems, any time you have a system of two, what happens is those two things come together, like magnets. They come into collision, or they become polarized and become completely divided. I think we need to rise above partisan politics and find a path forward together. As Albert Einstein is quoted—I’m not sure the line came from him, but he’s quoted in many places—he said that the definition of insanity is making the same mistake or doing the same thing over and over and over again, expecting a different result. [Ed. note: Einstein never said this.] It feels like that’s what our election cycle is like. Half the country feels like they won, half the country feels like they lost, at least if they voted or participated.
Obviously, there’s another late-comer to the presidential race, and that’s Kanye West. He’s received a lot of flak for his candidacy, as he’s openly admitted to trying to siphon votes away from Joe Biden to ensure a Trump victory. Is that something you’re hoping to avoid or is that what you’re going for as well?
Oh no. This is a very serious campaign. Our campaign is very serious. You’ll notice I don’t say anything negative about either of the two major political candidates, because I think that’s one of the problems with our political system, instead of people getting on stage, talking about their visionary ideas, inspiring people, informing and educating, talking about problems, mentioning problems, talking about solutions, constructive criticism. That’s why I refuse to run a negative campaign. I am definitely not a spoiler. I’m into data, right? I’m a technologist. I’ve got digital DNA. So does most of our campaign team. We’ve got our finger on the pulse.
Most of my major Democratic contacts are really happy to see that we’re running in a red state like Wyoming. Kanye West’s home state is Wyoming. He’s not on the ballot in Wyoming I could say, in part, because he didn’t have Akon on his team. But I could also say that he probably didn’t want to be on the ballot in Wyoming because it’s a red state. He doesn’t want to take additional points in a state where he’s only running against Trump. But we’re on the ballot in Wyoming, and since we’re on the ballot in Wyoming I think it’s safe—more than safe, I think it’s evident—that we are not here to run as a spoiler for the benefit of Donald Trump.
In running for president, you’ve opened yourself up to be scrutinized from every angle going back to the beginning of your career. I wanted to ask you about your time at the Digital Entertainment Network. Can you tell me a little bit about how you started there? You became a vice president as a teenager. What were your qualifications and what was your job exactly?
Well, I was the co-founder. A lot of it was my idea. I had an idea that people would use the internet to watch videos, and we create content for the internet. The idea was basically YouTube and Hulu and Netflix. Anyone that was around in the ‘90s and has been around digital media since then, they all credit us as the creators of basically those ideas. I was just getting a message from the creator of The Vandals, the punk rock band, right before you called. He’s like, “Brock, looks like we’re going to get the Guinness Book of World Records for having created the first streaming television show.”
We did a lot of that stuff. We had 30 television shows. We had the top most prestigious institutions in the world as investors. The biggest names. High-net-worth investors like Terry Semel, who’s chairman and CEO of Warner Brothers, and became the CEO of Yahoo. I did all sorts of things. I helped sell $150,000 worth of advertising contracts to the CEOs of Pepsi and everything else. I was the face of the company, meeting all the major banks and everything else, selling the vision of what the future was.
You moved in with Marc Collins-Rector and Chad Shackley at a mansion in Encino. Was that the headquarters of the business?
All start-ups, they normally start out in your home. Because it’s just you. The company was first started out of Marc’s house, and it was probably there for the first two or three months, before the company got an office. That’s, like, how it is for all start-ups.
were later a co-defendant in the L.A. County case filed against Marc Collins-Rector for plying minors with alcohol and drugs, in order to facilitate sexual abuse. You were dropped from the case, but you settled with one of the men for $21,600. Can you explain that?
Okay, well, first of all, that’s not accurate. Two of the plaintiffs in that case asked me if I would be a plaintiff. Because I refused to be a part of the lawsuit, they chose to include me to discredit me, to make their case stronger. They also went and offered 50 percent of what they got to the house management—they went around and offered money to anyone to participate in this. They needed people to corroborate their story. Eventually, because I refused to participate in the lawsuit, they named me. Subsequently, all three of the plaintiffs apologized to me, in front of audiences, in front of many people, saying Brock never did anything. They dismissed their cases.
Remember, this is a civil thing. I’ve never been charged with a crime in my life. And the last plaintiff to have his case dismissed, he contacted his lawyer and said, “Dismiss this case against Brock. Brock never did anything. I just apologized. Dismiss his case.” And the lawyer said, “No. I won’t dismiss this case, I have all these out-of-pocket expenses, I refuse to file the paperwork unless you give me my out-of-pocket expenses.” And so the lawyer, I guess, had $21,000 in bills. So I paid his lawyer $21,000—not him, it was not a settlement. That was a payment to his lawyer for his out-of-pocket expenses. Out-of-pocket expenses so that he would file the paperwork to dismiss the case.
You’ve said the cases were unfounded, and the plaintiffs eventually apologized. But your boss, Marc Collins-Rector later pleaded guilty to eight charges of child enticement and registered as a sex offender. Were you aware of his behavior? How do you square the fact that later allegations proved to be true, but these ones were not?
Well, remember: I was 16 and 17 years old at the time? So, no. I don’t think Marc is the man they made him out to be. But Marc is not a person I would associate with today, and someone I haven’t associated with in a very long time. I was 16 and 17. I chose the wrong business partner. You live and you learn.
You’ve pointed out that you were underage when most of these allegations were said to take place. Did you ever feel like you were coerced or in over your head while working at DEN?
I mean, I was working 18 hours a day, doing things I’d never done before. It was business school. But I definitely learned a lot in building that company. We raised $88 million. We filed our [form] S-1 to go public. We were the hottest start-up in Los Angeles.
In 2000, you left the country with Marc Collins-Rector. Why did you leave? How did you spend those two years abroad?
I moved to Spain in 1999 for personal reasons. I spent those two years in Europe working on developing my businesses.
Interpol found you in 2002. The house where you were staying reportedly contained guns, machetes, and child pornography. Whose guns and child porn were those? Were you aware they were in the house, and how did those get there?
My lawyers have addressed this in 32 pages of documentation showing a complete absence of wrongdoing. Please refer to my webpage for more information.
[Ed. Note: The webpage does not mention guns, machetes, or child pornography. It does state:“It is true that when the local police arrested Collins-Rector in Spain in 2002 on an international warrant, Mr. Pierce was also taken into custody, but so was everyone at Collins-Rector’s house in Spain; and it is equally clear that Brock was promptly released, and no charges of any kind were ever filed against Brock concerning this matter.”]
What do you make of the allegations against Bryan Singer? [Ed. Note: Bryan Singer, a close friend of Collins-Rector, invested at least $50,000 in DEN. In an Atlantic article outlining Singer’s history of alleged sexual assault and statutory rape, one source claimed that at age 15, Collins-Rector abused him and introduced him to Singer, who then assaulted him in the DEN headquarters.]
I am aware of them and I support of all victims of sexual assault. I will let America’s justice system decide on Singer’s outcome.
In 2011, you spoke at the Mindshift conference supported by Jeffrey Epstein. At that point, he had already been convicted of soliciting prostitution from a minor. Why did you agree to speak?
I had never heard of Jeffrey Epstein. His name was not on the website. I was asked to speak at a conference alongside Nobel Prize winners. It was not a cryptocurrency conference, it was filled with Nobel Prize winners. I was asked to speak alongside Nobel Prize winners on the future of money. I speak at conferences historically, two to three times a week. I was like, “Nobel Prize winners? Sounds great. I’ll happily talk about the future of money with them.” I had no idea who Jeffrey Epstein was. His name was not listed anywhere on the website. Had I known what I know now? I clearly would have never spoken there. But I spoke at a conference that he cosponsored.
What’s your connection to the Clinton Global Initiative? Did you hear about it through Jeffrey Epstein?
I joined the Clinton Global Initiative as a philanthropist in 2006 and was a member for one year. My involvement with the Initiative had no connection to Jeffrey Epstein whatsoever.
You’ve launched your campaign in Minnesota, where George Floyd was killed by a police officer. How do you feel about the civil uprising against police brutality?
I’m from Minnesota. Born and raised. We just had a press conference there, announcing that we’re on the ballot. Former U.S. Senator Dean Barkley was there. So that tells you, when former U.S. Senators are endorsing the candidate, right?
[Ed. note: Barkley was never elected to the United States Senate. In November of 2002, he was appointed by then Minnesota Governor Jesse Venture to fill the seat after Sen. Paul Wellstone died in a plane crash. Barkley’s term ended on Jan. 3, 2003—two months later.]
Yes, George Floyd was murdered in Minneapolis. My vice-presidential running mate Karla Ballard and I, on our last trip to Minnesota together, went to visit the George Floyd Memorial. I believe in law and order. I believe that law and order is foundational to any functioning society. But there is no doubt in my mind that we need reform. These types of events—this is not an isolated incident. This has happened many times before. It’s time for change. We have a lot of detail around policy on this issue that we will be publishing next week. Not just high-level what we think, not just a summary, but detailed policy.
You said that you support “law and order.” What does that mean?
“Law and order” means creating a fair and just legal system where our number one priority is protecting the inalienable rights of “Life, Liberty and the pursuit of Happiness” for all people. This means reforming how our police intervene in emergency situations, abolishing private prisons that incentivize mass incarceration, and creating new educational and economic opportunities for our most vulnerable communities. I am dedicated to preventing crime by eliminating the socioeconomic conditions that encourage it.
I support accountability and transparency in government and law enforcement. Some of the key policies I support are requiring body-cams on all law enforcement officers who engage with the public, curtailing the 1033 program that provides local law enforcement agencies with access to military equipment, and abolishing private prisons. Rather than simply defund the police, my administration will take a holistic approach to heal and unite America by ending mass incarceration, police brutality, and racial injustice.
Did you attend any Black Lives Matter protests?
I support all movements aimed at ending racial injustice and inequality. I​ have not attended any Black Lives Matter protests.​ My running-mate, Karla Ballard, attended the March on Washington in support of racial justice and equality.
Your platform doesn’t mention the words “climate change.” Is there a reason for that?
I’m not sure what you mean. Our policy platform specifically references human-caused climate change and we have a plan to restabilize the climate, address environmental degradation, and ensure environmental sustainability.
[Ed. Note: As of writing the Pierce campaign’s policy platform does not specifically reference human-caused climate change.]
You’ve recently brought on Akon as a campaign surrogate. How did that happen? Tell me about that.
Akon and I have been friends for quite some time. I was one of the guys that taught him about Bitcoin. I helped make some videogames for him, I think in 2012. We were talking about Bitcoin, teaching him the ropes, back in 2013. And in 2014, we were both speaking at the Milken Global Conference, and I encouraged him to talk about how Bitcoin, Africa, changed the world. He became the biggest celebrity in the world, talking about Bitcoin at the time. I’m an adviser to his Akoin project, very interested in the work that he’s doing to build a city in Africa.
I think we need a government that’s of, for, and by the people. Akon has huge political aspirations. He obviously was a hugely successful artist. But he also discovered artists like Lady Gaga. So not only is he, himself, a great artist, but he’s also a great identifier and builder of other artists. And he’s been a great businessman, philanthropist. He’s pushing the limits of what can be done. We’re like-minded individuals in that regard. I think he’ll be running for political office one day, because he sees what I see: that we need real change, and we need a government that is of, for, and by the people.
You mentioned that you’re an adviser on Akoin. Do you have any financial investments in Akoin or Akon City?
I don’t believe so. I’d have to check. I have so much stuff. But I don’t believe that I have any economic interests in his stuff. I’d have to verify that. We’ll get back to you. I don’t believe that I have any economic interests. My interest is in helping him. He’s a visionary with big ideas that wants to help things in the world. If I can be of assistance in helping him make the world a better place, I’m all for it. I’m not motivated by money. I’m not running for office because I’m motivated by power. I’m running for office because I’m deeply, deeply concerned about our collective future.
You’ve said you’re running on a pro-technology platform. One week into your campaign last month, a New York appeals court approved the state Attorney General’s attempt to investigate the stablecoin Tether for potentially fraudulent activity. Do you think this will impact your ability to sell people on your tech entrepreneurship?
No, I think my role in Tether is as awesome as it gets. It was my idea. I put it together. But I’ve had no involvement in the company since 2015. I gave all of my equity to the other shareholders. I’ve had zero involvement in the company for almost six years. It was just my idea. I put the initial team together. But I think Tether is one of the most important innovations in the world, certainly. The idea is, I digitized the U.S. dollar. I used technology to digitize currency—existing currency. The U.S. dollar in particular. It’s doing $10 trillion a year. Ten trillion dollars a year of transactional volume. It’s probably the most important innovation in currency since the advent of fiat money. The people that took on the business and ran the business in years to come, they’ve done things I’m not proud of. I’m not sure they’ve done anything criminal. But they certainly did things differently than I would do. But it’s like, you have kids, they turn 18, they go out into the world, and sometimes you’re proud of the things they do, and sometimes you shake your head and go, “Ugh, why did you do that?” I have zero concerns as it relates to me personally. I wish they made better decisions.
What do you think the investigation will find?
I have no idea. The problem that was raised is that there was a $5 million loan between two entities and whether or not they had the right to do that, did they disclose it correctly. There’s been no accusations of, like, embezzlement or anything that bad.
[Ed. Note: The Attorney General’s press release on the investigation reads: “Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”]
But there’s been some disclosure things, that is the issue. No one is making any outrageous claims that these are people that have done a bunch of bad—well, on the internet, the media has said that the people behind the business may have been manipulating the price of Bitcoin, but I don’t think that has anything to do with the New York investigation. Again, I’m so not involved, and so not at risk, that I’m not even up to speed on the details.
[Ed note: A representative of the New York State Attorney General told Forbes that he “cannot confirm or deny that the investigation” includes Pierce.]
We’ve recently witnessed the rise of QAnon, the conspiracy theory that Hollywood is an evil cabal of Satanic pedophiles and Trump is the person waging war on them. You mentioned human trafficking, which has become a cause for them. What are your thoughts on that?
I’ve watched some of the content. I think it’s an interesting phenomenon. I’m an internet person, so Anonymous is obviously an organization that has been doing interesting stuff. It’s interesting. I don’t have a big—conspiracy theory stuff is—I guess I have a question for you: What do you think of all of it, since you’re the expert?
You know, I think it’s not true, but I’m not running for president. I do wonder what this politician [Georgia congressional candidate Marjorie Taylor Greene], who’s just won her primary, is going to do on day one, once she finds out there’s no satanic cabal room.
Wait, someone was running for office and won on a QAnon platform, saying that Hollywood did—say what? You’re the expert here.
She won a primary. But I want to push on if we only have a few minutes. In 2006, your gaming company IGE brought on Steve Bannon as an investor. Goldman later bought out most of your stock. Bannon eventually replaced you as CEO of Affinity. You’ve described him as your “right-hand man for, like, seven years.” How well did you know Bannon during that time?
Yes, so this is in my mid-twenties. He wasn’t an investor. He worked for me. He was my banker. He worked for me for three years as my yield guide. And then he was my CEO running the company for another four years. So I haven’t worked with Steve for a decade or so. We worked in videogame stuff and banking. He was at Goldman Sachs. He was not in the political area at the time. But he was a pretty successful banker. He set up Goldman Sachs Los Angeles. So for me, I’d say he did a pretty good job.
During your business relationship, Steve Bannon founded Breitbart News, which has pretty consistently published racist material. How do you feel about Breitbart?
I had no involvement with Breitbart News. As for how I feel about such material, I’m not pleased by any form of hate-mongering. I strongly support the equality of all Americans.
Did you have qualms about Bannon’s role in the 2016 election?
Bannon’s role in the Trump campaign got me to pay closer attention to what he was doing but that’s about it. Whenever you find out that one of your former employees has taken on a role like that, you pay attention.
Bannon served on the board of Cambridge Analytica. A staffer on your campaign, Brittany Kaiser, also served as a business director for them. What are your thoughts on their use of illicitly-obtained Facebook data for campaign promotional material?
Yes, so this will be the last question I can answer because I’ve got to be off for this 5:00 pm. But Brittany Kaiser is a friend of mine. She was the whistleblower of Cambridge Analytica. She came to me and said, “What do I do?” And I said, “Tell the truth. The truth will set you free.”
[Ed. Note: Investigations in Cambridge Analytica took place as early as Nov. 2017, when a U.K. reporter at Channel 4 News recorded their CEO boasting about using “beautiful Ukranian girls” and offers of bribes to discredit political officials. The first whistleblower was Christopher Wylie, who disclosed a cache of documents to The Guardian, published on Mar. 17, 2018. Kaiser’s confession ran five days later, after the scandal made national news. Her association with Cambridge Analytica is not mentioned anywhere on Pierce’s campaign website.]
So I’m glad that people—I’m a supporter of whistleblowers, people that see injustice in the world and something not right happening, and who put themselves in harm’s way to stand up for what they believe in. So I stand up for Brittany Kaiser.
Who do you think [anonymous inventor of Bitcoin] Satoshi Nakamoto is?
We all are Satoshi Nakamoto.
You got married at Burning Man. Have you been attending virtual Burning Man?
I’m running a presidential campaign. So, while I was there in spirit, unfortunately my schedule did not permit me to attend.
OP note: please refer to the original article for reference links within text (as I've not added them here!)
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Bitcoin Price Prediction 2021

Bitcoin Price Prediction 2021
What is Bitcoin (BTC)?
Bitcoin is the first decentralized digital currency. Basically, Bitcoin is a peer-to-peer payment system that is not tied to the economy of any country or to the central bank. All actions to issue new coins, process payments, and create accounts are done by equal, independent network participants. Bitcoin uses cryptographic methods to ensure the functioning and protection of the system, but at the same time, all information about transactions is documented on a virtual ledger called the Bitcoin blockchain, which is accessible for everyone to see.
Nowadays Bitcoin is the most famous cryptocurrency in the world and the number one digital currency by market capitalization.
by StealthEX

Bitcoin achievements and future plans

The latest most impactful news from around Bitcoin were the following:
• Bitcoin halving took place on May 11, 2020.
• Bitcoin developers move forward protocol enhancements through soft forks and activating Taproot.
• Bitcoin is the most popular cryptocurrency investment for companies. MicroStrategy, a publicly-listed U.S. invested $425 million in Bitcoin. Square reportedly invested 1% of its portfolio into BTC, demonstrating strength in its long-term growth.
• According to Chainalysis 11.4M Bitcoin are held as long term investment.
• At block height 642,034 on August 3, a billion-dollar transaction took place where it only cost a small amount of 80 cents (0.0008034 BTC at 129.6 sat/vB).
• Over $300,000 in bitcoin grants being raised to support open source development and seeing bitcoin out-perform the price of gold by 100% so far this year.
There is no official roadmap of the Bitcoin project. But according to the official Twitter of the Bitcoin Core developer – John Newbery, in the near future, the Bitcoin team will focus on the Lightning Network. The Lightning teams working on c-lightning (Blockstream), Eclair (ACINQ), LND (Lightning Labs) and Rust Lightning will continue to develop the protocol.

Bitcoin Price History

Source: CoinMarketCap, Data was taken on 15 October 2020 by StealthEX
Current Price $11,403.37
Market Cap $211,161,902,513
Volume (24h) $25,189,472,156
Market Rank #1
Circulating Supply 18,517,493 BTC
Total Supply 18,517,493 BTC
7 Day High / Low $11,698.47 / $10,569.82

Experts Price Predictions

Bloomberg Intelligence

Blomberg analytics says that Bitcoin’s foundation is firming for further price advances.
“Considering normal maturation, about double the time frame from $1,000 to $10,000 would come in around 2025, for Bitcoin to potentially add another zero.”

Mike Novogratz

Mike Novogratz (CEO of crypto merchant bank Galaxy Digital) hopes that BTC will reach $20,000 highs by the end of 2020.
“This is the year of Bitcoin and if it doesn’t go up now by the end of the year, I might just hang my spurs.”

John McAfee

An entrepreneur John McAfee has attracted public’s attention with his bizarre Bitcoin price predictions for the year 2020.
Twitter, by StealthEX
At the beginning of October 2020, McAfee got arrested for tax evasion charges, so the crypto community probably will not see the end of this bet.

Tone Vays

Famous derivatives trader and consultant, Tony Vays during an interview with IGTV noted his thoughts for BTC price:
“Do we think we go as high as $100,000? I’m not willing to make that statement. For me, I would be happy if the next top was around $45,000, and that can happen quickly.”

Anthony “Pomp” Pompliano

The co-founder of Morgan Creek Digital Assets, Anthony “Pomp” Pompliano is sure that Bitcoin will continue to grow.
“You know there are people who debate what the size of the gold market is but let’s just use easy numbers. Let’s say that it’s $8 trillion. That puts Bitcoin at, depending on how many are lost or stolen, $400,000 to $450,000 today. Do you think that Bitcoin is going to be the equivalent of the gold market? I don’t. It’s better. It’s going to capture more market.”

Bitcoin Technical Analysis

Source: Tradingview, Data was taken on 15 October 2020 by StealthEX

Bitcoin Price Predictions

TradingBeasts BTC forecast

By the beginning of December 2020 BTC price will be $10,271.457 (-9.23%) per coin. TradingBeasts analytics thinks that by end of the year 2021 the maximum BTC price will reach $13,969.59 (+22.51%), while the minimum price could be $9,499.322 (-16.69%) per coin.

Wallet Investor Bitcoin price prediction

According to the Wallet Investor Forecast System, BTC is a good long-term investment. By the end of December 2020 Bitcoin could reach a maximum price of $15,339.20 (+34.51%) while by the end of 2021 its price can be $16,691.80 (+46.38%) per coin.
So, is it profitable to invest in Bitcoin? According to Wallet investor forecast, the long-term earning potential can reach +12.47% in one year.

DigitalCoinPrice BTC price prediction

Based on DigitalCoinPrice forecast Bitcoin is a profitable investment.The BTC average price may grow up to $26,263.42 (+130.31%) till the end of December 2020. While by end of the next year the its average price will be around $23,736.09 (+108.15%).

CoinPriceForecast Bitcoin forecast

CoinPriceForecast thinks that Bitcoin price at the end of 2020 will be around $11,495 (+0.8%). By the end of 2021 BTC price will reach $15,603 (+36.83%) per coin.
As you can see there are a lot of Bitcoin price predictions, but no one knows for 100 % what will happen with its price. One thing is for sure – if you are looking for the best platform to exchange cryptocurrency – StealthEX is here for you.

How to buy Bitcoin at StealthEX

BTC is available for exchange on StealthEX with a low fee. Follow these easy steps:
✔ Choose the pair and the amount for your exchange. For example, ETH to BTC.
✔ Press the “Start exchange” button.
✔ Provide the recipient address to which the coins will be transferred.
✔ Move your cryptocurrency for the exchange.
✔ Receive your BTC coins!
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 via [email protected]
The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Original article was posted on https://stealthex.io/blog/2020/10/15/bitcoin-price-prediction-2021/
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Bob The Magic Custodian



Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses.
Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes.

First, some background. Here is a summary of how custodians make us more secure:

Previously, we might give Alice our crypto assets to hold. There were risks:

But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
See - all problems are solved! All we have to worry about now is:
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are!

"On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid".
"Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since."

"As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!"
"Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?"

"Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party."
"Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!"

"What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven."
"Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!"

"We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies.
And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often".

How many holes have to exist for your funds to get stolen?
Just one.

Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so?
If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security.

The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle.

And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet?

Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds.
So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever.

Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see.
It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation.
A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7.

History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance.
Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.)
Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive.

Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today.
Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well.
Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do.

Facts/background/sources (skip if you like):



Thoughts?
submitted by azoundria2 to QuadrigaInitiative [link] [comments]

Cyber Crime - Cashaa NEO Bank Reports 337 BTC Hack, Indian Cyber Crime Team Investigating the Matter

Recently reported by India’s crypto news publication, CoinCrunchIndia, a major crypto NEO Bank, Cashaa has lost 337 BTC. It says that the Crime Branch of Delhi, a state of India is currently investigating the matter.
Cashaa is essentially a UK based crypto-friendly NEO bank, offering financial services to the crypto industry. In its latest hiring application for the PR manager, Cashaa claimed that the firm is growing more than 200% month by month. However, the platform has significant traffic from India and offers crypto services to Indian crypto enthusiasts.
As per details shared by CoinCrunchIndia, the attack was found on Friday (July 10) afternoon at around 1:23 pm (IST). While most exchanges use ‘multi-sig wallet’ as the higher level of security for funds stored in exchanges, Cashaa appeared to be using a ‘blockchain.com' wallet to store and send BTC. The first copy of the complaint shared by report reads the message from Cashaa’s employee as follows;
AT 1:23 PM, I logged into my Bitcoin.info wallet and made two transfers at 1:23 PM and 1:26 PM, at the same time multiple more transferrers happened to 'Receiver's address', emptying my wallet. It seems that the hacker got the notification as soon as I logged into my wallet, and stole the funds from him. today more than 336 Bitcoin is sent to the hacker address, affecting more people.
These BTCs were transferred to this BTC wallet address “14RYUUaMW1shoxCav4znEh64xnTtL3a2Ek” as per the records on ‘Blockchain explorer” and reports shared by CoinCrunchIndia.
Cashaa didn’t officially comment on the hack, however, it says that the company is ‘still investigating the damage caused by the incident’. It is believed that Cashaa ‘might suspend all deposits and withdrawals for 24 hours”.
In addition, Indian crypto exchanges and trading platforms are ready to work with Cashaa in resolving the issue. As such, Bitbns exchange ensured that they have marked the address, CoinDCX and WazirX also added that they will work closely with the Cashaa team ‘to support in whatever way they can’.
On the other side, an anonymous user on Twitter ‘United Crypto Exchange’ speculates that the hacker is trying to use 7BTC each, using blockchain and bitpie wallet, and then selling in mostly to Huobi. That being said, Kumar Gaurav, CEO at Cashaa blames at exchanges that hackers usually transfer stolen funds. Without specifically pointing at the matter and naming the exchange, Kumar Gaurav added;
“Everyone working in the crypto industry has to work very hard to bring the same level of security which currently an average person has when dealing with a bank account. As of today, hackers are very confident to hack crypto addresses and move it through exchanges that are facilitating such laundering through their systems. Exchanges like these must be shut down and owners of these exchanges should be charged with money laundering facilitation crime.”
Given the popularity of cryptocurrency and bitcoin, scams and hacks are on top bulletins quite often. In fact, we recently reported that India’s Kerala state-reported major scam in which the local police arrested the group of goons that kidnapped the mastermind behind a ‘bitcoin-related fraud scheme’.
Conclusively, Cashaa in our recent research report about demographics of Indian crypto users unveiled that they have a massive young audience between the age of '18-35.
Since Cashaa is yet to reveal the details about the incident, stay tuned with Bit2Buzz for the development of this 337 BTC hack.
submitted by Bit2buzz to CryptoCurrencies [link] [comments]

Binance Cuts Ties With Its US Customers, Does CZ Fear Being Arrested?

Towards the end of last week, Binance, a leading cryptocurrency exchange in the world, announced that it would be blocking its US users. The move was manifested by a change in the exchange’s terms of service.

The change picked 28 other countries that its users will not be able to access Binance.com. Among countries restricted from using Binance.com include those that have economic sanctions.

Prohibition of Use Clause

As per the ‘Prohibition of use’ clause on the updated terms of service, Binance notes:

“By accessing and using the Services, you represent and warrant that you are not on any trade or economic lists such as the UN Security Council Sanctions list, … or placed on the US Commerce Department’s ‘Denied Persons List.’ Binance is unable to provide services to any US persons. Binance maintains to select its markets and jurisdictions to operate and may restrict or deny the Services in certain countries at its discretion.”

It’s a shock that the exchange is closing its doors for users in the United States, considering that approximately 20 percent of its users originate from the US. For example, in the past six months, more than 40 million users from the United States visited Binance.com. The US was followed by India, Japan, Germany, and Turkey.

There’s a Way Around the Restriction, But not for Everyone

While the news are likely to dampen the crypto mood in the US market, US residents may still have a way to bypass the blockage; by using a virtual private network (VPN). Unfortunately, only those that are not verified can successfully use a VPN. However, Binance users who are not verified can only withdraw a maximum of 2 Bitcoins.

Changpeng Zhao (CZ), Binance’s CEO, had earlier anticipated the restrictions. But, the CEO expressed optimism saying that “some short terms pains may be necessary for long term goals.”

From Centralized to Decentralized, the SEC Gets Involved

With the exchange shifting from being centralized to decentralized, the United States Securities and Exchange Commission (SEC) must be involved. To prevent being caught in a regulatory standoff with the SEC, Binance announced that they would geo-fence their decentralized exchange to wade off users from the US among other countries such as Central Africa Republic, Cuba, Ukraine, Libya, Liberia, Venezuela, Zimbabwe, Iraq, Iran, Lebanon, among others.

After Coburn, CZ May Be Next

CZ possibly fears being arrested following what happened to Zachary Coburn. Coburn, the CEO of EtherDelta, a decentralized crypto platform, was charged by the US Securities and Exchange Commission for running an unregistered crypto platform. As per the SEC, EtherDelta has handled over 3.6 million orders which included tokens that the SEC classifies as securities.

A Twitter user, veltre_nick, while contributing to the news regarding Coburn’s predicaments, noted:

“These are just the SEC charges. The money laundering charges for being an unlicensed money transmitter come next. Then there will be more. And every DEX. DEX’s are money laundering machines.”

If the SEC holds the same views as veltre_nick, then CZ may have just avoided being charged or even an arrest. Luckily, another Twitter user has a solution, “DEX makers tip: don’t start in the USA.”
submitted by CapitalSail to CryptoCurrencies [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 BitcoinCA [link] [comments]

Clear link between Micheal Patryn and Omar Dhanani

Notice Micheal Patryn and Nazmin Dhanani are listed as officers in the company MPD Advertising: https://www.companiesofcanada.com/company/726420-8/mpd-advertising-inc

Also Intraday56 Explained it well here https://www.reddit.com/BitcoinCA/comments/7nt7ys/question_is_quadrigacx_legit_with_all_the/ds4ihco (copied and pasted for your convenience):
"Michael Patryn is one of the founders of Quadrigacx. He is part of a criminal mafia mob and has been to jail before for carding theft, ID theft and ponzi schemes. His real name is Omar Dhanani. Here's an article from coindesk that names Patryn as the cofounder of QuadrigaCx:
https://www.coindesk.com/bitcoin-exchange-quadriga-public-reverse-takeover
Omar Dhanani aka Michael Patryn was one of 6 men arrested for internet ID theft and credit card conspiracy fraud back in 2005. They were operating Shadowcrew.com, a web mob of highly organized criminals. For more info google ShadowCrew.
https://www.justice.gov/archive/opa/p2005/Novembe05_crm_619.html
At the time ShadowCrew was busted by the US Secret Service Omar Dhanani was a resident of Fountain Valley, California. A search on Intelius lists Omar R. Dhanani from Fountain valley, CA along with his relatives, Nazmin Dhanani and Nabatbibi Dhanani.
www.intelius.com/people/Omar-Dhanani/Fountain%20Valley-CA/06DPMG23XKS
Now here is where it gets interesting. Nazmin Dhanini and Michael Patryn have apparently registered several companies together, one of them being MPD Advertising:
http://www.companiesofcanada.com/company/726420-8/mpd-advertising-inc
Omar Dhanini relatives: Nazmin Dhanani and Nabatbibi Dhanani
Michael Patryn: registered at least one company, MPD Advertising Inc with Nazmin Dhanini."

See pastebin below for more info:

"# Michael Patryn

  1. aka. Omar Dhanani
  2. aka. Omar Patryn
  3. ## 2004-10-28
  4. Arrested and convicted in California under the name of Omar Dhanani as a member of Shadowcrew, an organization trafficking stolen credit and identity information primarily using E-Gold
  5. IMPORTANT: Omar Dhanani used the alias Voleur (french for "thief") during his time with Shadowcrew. This is one of the primary connecting threads between the Omar Dhanani and his later aliases as Patryn, owner of VFS-NETWORKS
  6. https://www.justice.gov/archive/opa/p2005/Novembe05\_crm\_619.html
  7. https://web.archive.org/web/20130216063323/http://www.secretservice.gov/press/pub2304.pdf
  8. https://www.justice.gov/sites/default/files/usao-nj/legacy/2013/11/29/Kolarov%2C%20Aleksi%20Indictment.pdf
  9. ### 2004-10-04
  10. According to a Bloomberg article from January 2006 citing a United States Secret Service affidavit, Omar:
  11. "boasted in a chat room that he moved between $40,000 and $100,000 a week. He pled guilty in November to conspiracy to commit fraud and faces up to five years in prison."
  12. https://www.bloomberg.com/news/articles/2006-01-08/gold-rush
  13. ## 2004-10-29
  14. Users on Talkgold forum begin discussing the possibility that a prolific user on the forum, "Patryn" is actually Omar Dhanani.
  15. https://web.archive.org/web/20130510055547/http://www.talkgold.com/forum/r256207-.html
  16. ## 2005-11-18
  17. An article in The Register describes how Omar Dahnani and 5 others plead guilty to charges laid on them in November 2014:
  18. "The group of six pleaded guilty to one count of conspiracy to defraud in New Jersey on Thursday in exchange for the state dropping other charges pending against them, Wired reports. They were named as: Andrew Mantovani, 23, and Brandon Monchamp, 22, of Arizona; Kim Taylor, 47, and Omar Dhanani, 22, of California; Jeremy Stephens, 31, of North Carolina; and Jeremy Zielinski, 22, of Florida. In total, 12 people have now pleaded guilty to Shadowcrew-related charges."
  19. "Shadowcrew members are expected to be sentenced between mid-February and mid-March 2006."
  20. https://www.theregister.co.uk/2005/11/18/shadowcrew/
  21. ## 2007-05-23
  22. According to US Federal Prison Records, an Omar Dhanani is released from Federal Prison
  23. https://www.bop.gov/inmateloc/
  24. ## 2008-04-03
  25. MIDAS GOLD Exchange is registered in Canada
  26. under the name Omar Patryn
  27. Specialized in processing anonymous purchases and sale of early digital currencies, particularly Liberty Reserve. (Liberty Reserve was shut down in 2013 for money laundering and facilitating identity theft, credit card theft, narcotics trafficking, and child pornography)
  28. https://www.ic.gc.ca/app/sccc/CorporationsCanada/fdrlCrpDtls.html?corpId=6951198&V\_TOKEN=1511930988373&crpNm=&crpNmbr=695119-8&bsNmbr=
  29. http://www.hyipforum.pl/topic/779-m-gold-midas-gold-exchange-obni%C5%BCona-prowizja-dla-forumowicz%C3%B3w/
  30. ## 2008-05-30
  31. DNSGEO.COM domain is registered in Panama
  32. This domain was used as an alternative gateway to VFS-NETWORK.COM as seen in the internet archive
  33. https://web.archive.org/web/20110207131437/http://dnsgeo.com/
  34. https://whois.icann.org/en/lookup?name=dnsgeo.com
  35. for comparison:
  36. https://web.archive.org/web/20101218100404/http://vfs-network.com/
  37. ### Reports from users claim that phishing emails we're received from this domain (DNSGEO.COM) shortly after disputing problems with MIDAS GOLD withdrawals and deposits.
  38. Images are included.
  39. https://www.complaintsboard.com/complaints/midas-gold-exchange-c440529.html
  40. ## 2008-08-27
  41. HD-MONEY.COM domain is registered as being located in the Bahamas
  42. https://whois.icann.org/en/lookup?name=www.hd-money.com
  43. ## 2009-02-09
  44. VFS-NETWORK.com domain is registered
  45. (Voleur Financial Services)
  46. https://web.archive.org/web/20090225095825/http://www.vfs-network.com:80/
  47. VFS Network was an exchange network bringing together
  48. e-money services like Liberty Reserve and other OmaMichael projects like HD-MONEY.COM, XXX-CHANGE.COM and MIDAS GOLD.
  49. Website now points to dns.shadowserver.org, a volunteer service often used by legal authorities to capture data from incoming traffic to the webpage (Was used by authorities after Liberty Reserve's domain was seized)
  50. https://whois.icann.org/en/lookup?name=vfs-network.com
  51. https://krebsonsecurity.com/2013/05/reports-liberty-reserve-founder-arrested-site-shuttered/#more-20723
  52. ### 2009-10-02
  53. VFS-Network publishes that they have met with the management of Liberty Reserve
  54. https://web.archive.org/web/20101129134240/http://vfs-network.com/main.htm
  55. ### NOTE: Voleur is mentioned as an alias by users on dreamteammoney.com, along with complaints related to MIDAS GOLD. These complaints relate a MIDAS GOLD policy of withholding client's funds depending on how many emails they sent asking about the status of their funds.
  56. http://www.dreamteammoney.com/index.php?showtopic=130170&hl=voleur
  57. ### IMPORTANT: "OWNER" of VFS-NETWORK frequently appears online under the name of Patryn, connecting the alias to Omar Patryn of MIDAS GOLD, although Patryn can be found denying any relationship whatsoever between the businesses. In the same thread below on ComplaintsBoard, Patryn posts with a VFS-NETWORK avatar while describing why he, as an administrator on a MIDAS GOLD-managed forum deleted posts of users making complaints.
  58. https://www.complaintsboard.com/complaints/midas-gold-exchange-c286802.html#c546412
  59. http://www.realscam.com/members/patryn/
  60. ## 2009-05-02
  61. HD-MONEY.COM CEO (Michael Patryn aka Omar Dhanani) informs clients that they are now partnered with Liberty Reserve
  62. https://web.archive.org/web/20100115074839/http://www.hd-money.com/Usecms.aspx?Page=ceo
  63. ## 2009-09-10
  64. XXX-CHANGE.COM domain is registered (although internet archive shows an xxx-change.com as far back as 2001)
  65. Images from internet archive show an important partnership with HD-MONEY and VFS-NETWORK
  66. https://web.archive.org/web/20130628192252/http://xxx-change.com:80/
  67. ## 2009-10-22
  68. MPD ADVERTISING is founded by Nazin Dhanani and Michael Patryn in Vancouver
  69. Nazin is thought to be a sibling of Omar Dhanani aka Michael Patryn
  70. http://www.companiesofcanada.com/company/726420-8/mpd-advertising-inc
  71. ## 2009-12-25
  72. Complaints surface online about MIDAS GOLD withholding funds with recommendations to report to the Canadian police
  73. https://www.complaintsboard.com/complaints/perfect-money-corporation-c287831.html#c546416
  74. ## 2009-12-30
  75. MIDAS GOLD business registration is dissolved by Omar Patryn, but forums show that services continued well into 2011
  76. https://www.ic.gc.ca/app/sccc/CorporationsCanada/fdrlCrpDtls.html?corpId=6951198&V\_TOKEN=1511930988373&crpNm=&crpNmbr=695119-8&bsNmbr=
  77. ###
  78. Around December 2009 , reports begin to surface of payment processors closing down MIDAS GOLD accounts due to overwhelming amounts of complaints from MIDAS GOLD users not receiving their funds from MIDAS GOLD. OmaMichael himself responds in the thread
  79. https://www.complaintsboard.com/complaints/midas-gold-exchange-c286802.html
  80. ### In the same year, Liberty Reserve is investigated by Costa Rican
  81. authorities due to questions as to their funding sources. By 2011 they are denied a business license for these reasons and forced to dissolve. Liberty Reserve continues to do business illegally by routing through 5 separate Costa Rican corporate entities.
  82. https://en.wikipedia.org/wiki/Liberty\_Reserve#Criminal\_investigation\_and\_charges
  83. ### MIDAS GOLD would be seized by the United States Global Illicit Financial Team sometime between 2010-2011
  84. http://m-gold.com/index.html
  85. ## 2013-06-13
  86. Extremely dubious reports of the arrest of an Omar Dhanani in Montreal for money laundering crimes appear on press release websites (very unreliable reports)
  87. https://www.businesspress24.com/pressrelease1236813/omar-dhanani-arrested-in-montreal.html
  88. https://web.archive.org/web/20130701234632/http://internetcybercrime.com/montreal-omar-dhanani-arrested-for-money-laundering/
  89. http://www.realscam.com/attachments/f29/4517d1371775999-welcome-patryn-omar.jpg
  90. ## 2014-04-17
  91. Michael Patryn is nominated to the Bitcoin Foundation by Francis Pouliot, who states in his nomination:
  92. "Michael Patryn has been working with digital currencies since 2002 in the capacity of financial consultant, market maker, and exchanger. As a venture capitalist, Michael has actively invested with and supported over twenty companies within the digital currency space."
  93. ### Which 20 companies? 2002 would be the year Omar Dhanani was working with Shadowcrew laundering funds using E-Gold.
  94. ## 2014-01-26
  95. A profile of Michael Patryn is published on the Lifeboat Foundation website listing him as Director of VFS SECURITIES.
  96. ## 2014-11-12
  97. Quadriga Fintech Solutions is founded by Gerald Cotton and Michael Patryn (Only Gerald Cotton is listed on the SEDAR page for the company).
  98. https://sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00037030"
Copied and pasted from: https://pastebin.com/Svap6KSF


Also note early connection between Lovie Horner and Micheal Patryn through the BJJ Foundation (maybe this side-note will be useful at some future point):
https://www.companiesofcanada.com/company/861395-8/world-bjj-federation
Also note early connection between Lovie Horner and Micheal Patryn through the BJJ Foundation (maybe this side-note will be useful at some future point):
https://www.companiesofcanada.com/company/861395-8/world-bjj-federation
submitted by cryptotrader1234 to QuadrigaCX [link] [comments]

The Great Bitcoin Bull Market Of 2017 by Trace Mayer

By: Trace Mayer, host of The Bitcoin Knowledge Podcast.
Originally posted here with images and Youtube videos.
I just got back from a two week vacation without Internet as I was scouring some archeological ruins. I hardly thought about Bitcoin at all because there were so many other interesting things and it would be there when I got back.
Jimmy Song suggested I do an article on the current state of Bitcoin. A great suggestion but he is really smart (he worked on Armory after all!) so I better be thorough and accurate!
Therefore, this article will be pretty lengthy and meticulous.
BACKGROUND
As I completely expected, the 2X movement from the New York Agreement that was supposed to happen during the middle of my vacation flopped on its face because Jeff Garzik was driving the clown car with passengers willfully inside like Coinbase, Blockchain.info, Bitgo and Xapo and there were here massive bugS and in the code and miners like Bitmain did not want to allocate $150-350m to get it over the difficulty adjustments.
I am very disappointed in their lack of integrity with putting their money where their mouths are; myself and many others wanted to sell a lot of B2X for BTC!
On 7 December 2015, with Bitcoin trading at US$388.40, I wrote The Rise of the Fourth Great Bitcoin Bubble. On 4 December 2016, with Bitcoin trading at US$762.97, I did this interview:

As of 26 November 2017, Bitcoin is trading around US$9,250.00. That is an increase of about 2,400% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec 2011, 1 Jul 2013), especially when there are financial and economic consequences.
With such massive gains in such a short period of time the speculative question becomes: Buy, Hold or Sell?
FUNDAMENTALS
Bitcoin is the decentralized censorship-resistant Internet Protocol for transferring value over a communications channel.
The Bitcoin network can use traditional Internet infrastructure. However, it is even more resilient because it has custom infrastructure including, thanks to Bitcoin Core developer Matt Corrallo, the FIBRE network and, thanks to Blockstream, satellites which reduce the cost of running a full-node anywhere in the world to essentially nothing in terms of money or privacy. Transactions can be cheaply broadcast via SMS messages.
SECURITY
The Bitcoin network has a difficulty of 1,347,001,430,559 which suggests about 9,642,211 TH/s of custom ASIC hardware deployed.
At a retail price of approximately US$105/THs that implies about $650m of custom ASIC hardware deployed (35% discount applied).
This custom hardware consumes approximately 30 TWh per year. That could power about 2.8m US households or the entire country of Morocco which has a population of 33.85m.
This Bitcoin mining generates approximately 12.5 bitcoins every 10 minutes or approximately 1,800 per day worth approximately US$16,650,000.
Bitcoin currently has a market capitalization greater than $150B which puts it solidly in the top-30 of M1 money stock countries and a 200 day moving average of about $65B which is increasing about $500m per day.
Average daily volumes for Bitcoin is around US$5B. That means multi-million dollar positions can be moved into and out of very easily with minimal slippage.
When my friend Andreas Antonopolous was unable to give his talk at a CRYPSA event I was invited to fill in and delivered this presentation, impromptu, on the Seven Network Effects of Bitcoin.
These seven network effects of Bitcoin are (1) Speculation, (2) Merchants, (3) Consumers, (4) Security [miners], (5) Developers, (6) Financialization and (7) Settlement Currency are all taking root at the same time and in an incredibly intertwined way.
With only the first network effect starting to take significant root; Bitcoin is no longer a little experiment of magic Internet money anymore. Bitcoin is monster growing at a tremendous rate!!

SPECULATION
For the Bitcoin price to remain at $9,250 it requires approximately US$16,650,000 per day of capital inflow from new hodlers.
Bitcoin is both a Giffen good and a Veblen good.
A Giffen good is a product that people consume more of as the price rises and vice versa — seemingly in violation of basic laws of demand in microeconomics such as with substitute goods and the income effect.
Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases in an apparent contradiction of the law of demand.
There are approximately 16.5m bitcoins of which ~4m are lost, ~4-6m are in deep cold storage, ~4m are in cold storage and ~2-4m are salable.
(http://www.runtogold.com/images/lost-bitcoins-1.jpg)
(http://www.runtogold.com/images/lost-bitcoins-2.jpg)
And forks like BCash (BCH) should not be scary but instead be looked upon as an opportunity to take more territory on the Bitcoin blockchain by trading the forks for real bitcoins which dries up more salable supply by moving it, likely, into deep cold storage.
According to Wikipedia, there are approximately 15.4m millionaires in the United States and about 12m HNWIs ($30m+ net worth) in the world. In other words, if every HNWI in the world wanted to own an entire bitcoin as a 'risk-free asset' that cannot be confiscated, seized or have the balance other wise altered then they could not.
For wise portfolio management, these HNWIs should have at least about 2-5% in gold and 0.5-1% in bitcoin.
Why? Perhaps some of the 60+ Saudis with 1,700 frozen bank accounts and about $800B of assets being targetted might be able to explain it to you.
In other words, everyone loves to chase the rabbit and once they catch it then know that it will not get away.
RETAIL
There are approximately 150+ significant Bitcoin exchanges worldwide. Kraken, according to the CEO, was adding about 6,000 new funded accounts per day in July 2017.
Supposedly, Coinbase is currently adding about 75,000 new accounts per day. Based on some trade secret analytics I have access to; I would estimate Coinbase is adding approximately 17,500 new accounts per day that purchase at least US$100 of Bitcoin.
If we assume Coinbase accounts for 8% of new global Bitcoin users who purchase at least $100 of bitcoins (just pulled out of thin error and likely very conservative as the actual number is perhaps around 2%) then that is approximately $21,875,000 of new capital coming into Bitcoin every single day just from retail demand from 218,750 total new accounts.
What I have found is that most new users start off buying US$100-500 and then after 3-4 months months they ramp up their capital allocation to $5,000+ if they have the funds available.
After all, it takes some time and practical experience to learn how to safely secure one's private keys.
To do so, I highly recommend Bitcoin Core (network consensus and full validation of the blockchain), Armory (private key management), Glacier Protocol (operational procedures) and a Puri.sm laptop (secure non-specialized hardware).
WALL STREET
There has been no solution for large financial fiduciaries to invest in Bitcoin. This changed November 2017.
LedgerX, whose CEO I interviewed 23 March 2013, began trading as a CFTC regulated Swap Execution Facility and Derivatives Clearing Organization.
The CME Group announced they will begin trading in Q4 2017 Bitcoin futures.
The CBOE announced they will begin trading Bitcoin futures soon.
By analogy, these institutional products are like connecting a major metropolis's water system (US$90.4T and US$2 quadrillion) via a nanoscopic shunt to a tiny blueberry ($150B) that is infinitely expandable.
This price discovery could be the most wild thing anyone has ever experienced in financial markets.
THE GREAT CREDIT CONTRACTION
The same week Bitcoin was released I published my book The Great Credit Contraction and asserted it had now begun and capital would burrow down the liquidity pyramid into safer and more liquid assets.
(http://www.runtogold.com/images/Great-Credit-Contraction-Liquidity-Pyramid.jpg)
Thus, the critical question becomes: Is Bitcoin a possible solution to the Great Credit Contraction by becoming the safest and most liquid asset?
BITCOIN'S RISK PROFILE
At all times and in all circumstances gold remains money but, of course, there is always exchange rate risk due to price ratios constantly fluctuating. If the metal is held with a third-party in allocated-allocated storage (safest possible) then there is performance risk (Morgan Stanley gold storage lawsuit).
But, if properly held then, there should be no counter-party risk which requires the financial ability of a third-party to perform like with a bank account deposit. And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk.
Bitcoin is a completely new asset type. As such, the storage container is nearly empty with only $150B.
And every Bitcoin transaction effectively melts down every BTC and recasts it; thus ensuring with 100% accuracy the quantity and quality of the bitcoins. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography!
This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum, but the probability is almost nil and getting lower everyday it does not happen.
Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity.
To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes.
(http://www.runtogold.com/images/ethereum-bitcoin-scability-nov-2017.png)
TRANSACTIONS
Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve.
On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August 2017.
Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls?
As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market. And as the fees fall then they are economical again.
Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move.
There are approximately 275,000-350,000 transactions per day with transaction fees currently about $2m/day and the 200 DMA is around $1.08m/day.
(http://www.runtogold.com/images/bitcoin-transaction-fees-nov-2017.png)
What I like about transaction fees is that they somewhat reveal the financial health of the network.
The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the (1) coinbase reward which is a form of inflation and (2) transaction fees which is a form of usage fee.
The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it.
I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.com may have millions of page views but I am more interested in EBITDA.
DEVELOPERS
Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want.
The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is.
However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. all need competent developers to help build their businesses.
Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem.
Nevertheless, the Bitcoin ecosystem is healthier than ever before.
(http://www.runtogold.com/images/bitcoin-ecosystem.jpg)(/images/bitcoin-ecosystem-small.jpg)
SETTLEMENT CURRENCY
There are no significant global reserve settlement currency use cases for Bitcoin yet.
Perhaps the closest is Blockstream's Strong Federations via Liquid.
PRICE
There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth.
Since the supply is known the exchange rate of Bitcoins is composed of (1) transactional demand and (2) speculative demand.
Interestingly, the price elasticity of demand for the transactional demand component is irrelevant to the price. This makes for very interesting dynamics!
(http://www.runtogold.com/images/bitcoin-speculation.jpg)
On 4 May 2017, Lightspeed Venture Partners partner Jeremy Liew who was among the early Facebook investors and the first Snapchat investor laid out their case for bitcoin exploding to $500,000 by 2030.
On 2 November 2017, Goldman Sachs CEO Lloyd Blankfein (https://www.bloomberg.com/news/articles/2017-11-02/blankfein-says-don-t-dismiss-bitcoin-while-still-pondering-value)said, "Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus."
On 12 Sep 2017, JP Morgan CEO called Bitcoin a 'fraud' but conceded that "(http://fortune.com/2017/09/12/jamie-dimon-bitcoin-cryptocurrency-fraud-buy/)Bitcoin could reach $100,000".
Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition.
I have been around this space for a long time. In my opinion, those who scoffed at the thought of $1 BTC, $10 BTC (Professor Bitcorn!), $100 BTC, $1,000 BTC are scoffing at $10,000 BTC and will scoff at $100,000 BTC, $1,000,000 BTC and even $10,000,000 BTC.
Interestingly, the people who understand it the best seem to think its financial dominance is destiny.
Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State.
Consequently, I like looking at the 200 day moving average to filter out the daily noise and see the long-term trend.
(http://www.runtogold.com/images/bitcoin-price-200dma-nov-2017.png)
Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market.
The 200 day moving average is around $4,001 and rising about $30 per day.
So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications.
(http://www.runtogold.com/images/bitcoin-price-pro-forma.png)
Maybe Jamie Dimon is not so off his rocker after all with a $100,000 price prediction.
We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose?
As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world.
CONCLUSION
Well, this has been a brief analysis of where I think Bitcoin is at the end of November 2017.
The seven network effects are taking root extremely fast and exponentially reinforcing each other. The technological dominance of Bitcoin is unrivaled.
The world is rethinking what money is. Even CEOs of the largest banks and partners of the largest VC funds are honing in on Bitcoin's beacon.
While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright.
Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency. That is, after all, what uncharted territory with daily all-time highs do!
But perhaps there is a larger lesson to be learned here.
Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts.
Perhaps everyone should start keeping books in three numéraires: USD, gold and Bitcoin.
Both gold and Bitcoin have never been worth nothing. But USD is a fiat currency and there are thousands of those in the fiat currency graveyard. How low can the world reserve currency go?
After all, what is the risk-free asset? And, whatever it is, in The Great Credit Contraction you want it!
What do you think? Disagree with some of my arguments or assertions? Please, eviscerate them on Twitter or in the comments!
submitted by bitcoinknowledge to Bitcoin [link] [comments]

Criminal Case Against Quadrigacx: A path forward

Below is some legal information the beings to outline the criminal case against Quadrigacx by way of negligence and misrepresentation:

" a corporation is guilty of a crime if its “directing mind” committed the prohibited act and had the necessary state of mind. To be a “directing mind”, a person must have so much authority in the corporation that the person can be considered the “alter ego” or “soul” of the corporation (terms used in recent case law). Determining who is a directing mind depends on the facts of each case, but generally the person must have authority to set policy rather than simply having authority to manage. As well, the directing mind has to be intending, at least in part, to benefit the corporation by the crime. "
Who are the “directing minds” of the organization?
In determining who is sufficiently important within the organization to be considered to be its directing mind, Bill C-45 refers to a “senior officer”. This is a more familiar expression than “directing mind”. The definition of “senior officer” includes everyone who has an important role in: • setting policy (which is the current Canadian law); or • managing an important part of the organization’s activities (which is new). The definition therefore focuses on the function of the individual, rather than on any particular title. For example, the “executive assistant to the president” could have a great deal of authority and effectively speak for the president in one organization and have only minor administrative functions, like scheduling the president’s meetings, in another organization. In addition, the new definition makes it clear that the directors, the chief executive officer and the chief financial officer of a corporation are, by virtue of the position they hold, automatically “senior officers”. A corporation charged with an offence cannot argue that the individuals occupying these positions actually had no real role in setting policy or managing the organization and therefore were not senior officers.

What does it mean that an organization is a party to an offence?
The Bill refers to “a party to an offence”, and Section 21 of the Criminal Code provides that a person is a party to an offence if the person actually commits the offence or aids or abets another person to commit it. Section 22 of the Criminal Code makes a person who counsels another person to commit an offence also a party to that offence. Accordingly, the use of “a party to an offence” in Bill C-45 reflects both sections of the Code, providing a broader definition that will apply to more activities than only when an organization “commits an offence”.

As for the intent necessary to find the organization guilty, the proposed amendments under Bill C-45 would require that the senior officer responsible, or senior officers collectively, must have departed markedly from the standard of care that could be expected.

" In previous interviews, as revealed by Cornell Professor Emin Gün Sirer, former QuadrigaCX CEO Gerry Cotten claimed that the exchange employed a multi-signature system to protect user funds.
A multi-signature system allows individuals or businesses to hold private keys to a certain address. Only when the majority of the keys are combined can the individuals or businesses obtain access to the funds stored in the address.
However, the exchange evidently had not employed a multi-signature system in all of its cold wallets because it was reported that the CEO had full control over the funds." https://www.ccn.com/mycrypto-ceo-quadrigacx-may-not-have-ethereum-cold-wallet-wheres-the-missing-150m

" Cotten, in turn, spoke to Quadriga’s security strengths, noting that the exchange uses multi-signature cold storage to secure bitcoin holdings. Fiat holdings, he continued, are held at unspecified Canadian financial institutions.
“Quadriga takes security seriously, and employs a number of policies and procedures to ensure that both client information and client funds remain completely safe,” he said." https://www.coindesk.com/canada-bitcoin-exchange-leader-market-turmoil

" Is QuadrigaCX Safe?
Modified on: 2017-07-11 18:41:59 -0400
QuadrigaCX has been developed by some of the foremost leaders in the crypto currency community, and employs some of the most stringent security protocols that currently exist. Furthermore, Bitcoins that are funded in QuadrigaCX are stored in cold storage, using some of the most secure cryptographic procedures possible. Our website is secured with SSL. With that said, it is important that users take precautions to prevent having their QuadrigaCX account access details fall into the wrong hands." https://support.quadrigacx.com/support/solutions/articles/9000124318-is-quadrigacx-safe-

My Commentary: Senior officer, Gerlald Cotte, CEO of Quadrigacx was clearly knowledgeable and negligent is safeguarding the fiat and crypto deposits intrusted to the organization he founded, was a senior officer and directing mind of. He showed criminal negligence and hence Quadrigacx is criminally liable.

"How does an organization become a party to an offence where intent or knowledge has to be proven?
The proposed reforms in Bill C-45, specifically the addition of section 22.2 of the Criminal Code, would set out three ways an organization can commit a crime requiring an awareness of a fact or a specified intent. In all cases, the focus is on a senior officer who must intend to benefit the organization at least to some degree. The most obvious way for an organization to be criminally responsible is if the senior officer actually committed the crime for the direct benefit of the organization. For example, if the CEO fudges financial reports and records, leading others to provide funds to the organization, both the organization and the CEO will be guilty of fraud.

How are organizations punished for committing a crime?
Corporations cannot be imprisoned so the Criminal Code provides for fines when corporations are convicted of crimes. In the case of a summary conviction offence (less serious offences that are punishable for individuals by up to six months in jail and/or a $2,000 fine), the Code provides for a fine of up to $25,000 for corporations. Bill C-45 would increase the maximum fine on an organization for a summary conviction offence to $100,000. For the more serious, indictable offences, the Code already provides no limit on the fine that can be imposed on an organization.

factors that a court should consider in fining an organization:
• Penalties imposed on managers and employees for their role in the crime - An organization shows how seriously it responds to criminal activity if, for example, it disciplines or fires employees who participated in the offence.
Previous convictions or regulatory offences (Omar Dhanani/Michael Patryn is a convicted fraudster and co-founder of Quadriga AND still holds shares in Quadriga) - Just as the criminal record of an individual is very important to determining the appropriate penalty, so it is important for a judge to consider whether the organization and its workers had been sanctioned for similar activities in the past, not just in the criminal courts but by regulators like occupational health and safety departments. " https://www.justice.gc.ca/eng/rp-pother-autre/c45/c45.pdf
Note: " In 2009, Patryn opened up a Canadian business with Nazmin Dhanani — the same name that appears under “relatives” on the listing for Omar Dhanani of Fountain Valley on the US public records service Intelius. In 2004, a US Department of Justice press release indicates that an “Omar Dhanani of Fountain Valley, CA” was arrested for setting up money laundering services for the organized internet crime syndicate called ShadowCrew. Those who claim that Michael Patryn is Omar Dhanani also point to the fact that in 2008, someone named Omar Patryn started a Canadian company named Midas Gold. Midas Gold was later shut down by the US Global Illicit Financial Team. " https://coiniq.com/quadrigacx-review/
"• Restitution – Compensating victims shows that the organization is trying to make up for the harm it caused. • Attempts to hide assets to avoid paying a fine – An organization that tries to pretend it is poor, rather than being open with the court about its financial situation, is showing that it has not changed its ways.
• Measures taken to reduce the likelihood of further criminal activity - New policies and practices, like spot audits or changes in personnel, could indicate that the organization has learned its lesson. " https://www.justice.gc.ca/eng/rp-pother-autre/c45/c45.pdf


Question: Who are the new directors of Quadriga?
submitted by cryptotrader1234 to QuadrigaCX2 [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 CryptoCurrencyTrading [link] [comments]

Today's Top Crypto News Highlights: Bitcoin Price, Coin ... Bitcoin exchange hacked AGAIN, goes bankrupt BITCOIN 2020 - BIGGEST OPPORTUNITY YET?! Ethereum Devs Arrested by US Crypto CEO dies holding only passwords that can unlock millions in customer coins Mt Gox The Untold Story! (Bitcoin Exchange Hack)

The CEO of a bitcoin exchange has been arrested on charges of selling bitcoins to be used to buy and sell illegal drugs anonymously. Charlie Shrem, the 24-year-old CEO of BitInstant, along with ... The CEO of one of the world's leading bitcoin exchanges - BitInstant - has been arrested in New York. The prosecution claims Charlie Shrem was involved in a drug money laundering scheme via the Silk Road website. CEO of major Bitcoin exchange arrested on money laundering charges Charlie Shrem and an accomplice allegedly schemed to sell $1 million in bitcoins to Silk Road users. The CEO of Bitcoin exchanger BitInstant has been arrested and charged with money laundering over allegations that he and another man sold more than $1 million in Bitcoins to buyers and sellers of ... The CEO of a bitcoin exchange has been arrested on charges of selling bitcoins to be used to buy and sell illegal drugs anonymously. Charlie Shrem, the 24-year-old CEO of BitInstant, along with ...

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Today's Top Crypto News Highlights: Bitcoin Price, Coin ...

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