A 37 year-old man in the US has been sentenced to one year and one day in prison for fraud in connection with a Bitcoin phishing scheme designed to rob victims of their cryptocurrency.
Michael Richo, of New Haven, was also ordered to forfeit $352,000 in cash, various computers and electronic devices, and an assortment of precious coins and metals that he purchased with the proceeds of his offense.
Following his release, Richo will be subject to three years of supervised release.
Court documents and statements made in court specify that Richo targeted individuals on the dark web with the phishing scheme.
He did so by posting fake links to online marketplaces on dark web forums. These links would then direct users to fake login pages that resembled the real login pages for various dark web marketplaces.
When an individual tried to login, Richo would steal their credentials. He would then monitor the individual’s Bitcoin balance at the real marketplace and would withdraw the coins once the person deposited the funds.
Richo would either deposit the Bitcoin into his own wallet or sell it in exchange for fiat currency. The US dollars obtained as a result were deposited into bank accounts under his control or provided to him through Green Dot Cards, Western Union transfers, and MoneyGram transfers.
Overall, Richo was able to steal more than $365,000, and had over 10,000 stolen usernames and passwords on his computer.
He was arrested on a federal criminal complaint on October 5, 2016 and pleaded guilty to one count of access device fraud and one count of money laundering on June 27, 2017.
Other Bitcoin scammers
Scammers using Bitcoin for nefarious reasons isn’t something new. In fact, just last month, the Federal Bureau of Investigation (FBI) announced the results of its latest dark web investigation, which saw more than $4 million worth of cryptocurrency seized from criminals.
Led by members of the Joint Criminal Opioid and Darknet Enforcement (J-CODE) team, Operation SaboTor resulted in 61 arrests and the closure of 50 dark web accounts linked with online criminal activity. The operation also confiscated some 300 kilos of drugs, 51 firearms, and more than $4.5 million worth of cryptocurrency, $2.48 million in cash, and $40,000 worth of gold.
More recently, Hard Fork also reported on a similar case in Canada, which saw a judge order the forfeiture of approximately $1.4 million in Bitcoin found on a drug dealer’s computer as part of a criminal investigation.
Did you know? Hard Fork has its own stage at TNW2019 , our tech conference in Amsterdam. Check it out .
Congressional report: Bitcoin adoption ‘miniscule’ compared to traditional finance
Distributed ledger systems that underpin cryptocurrencies aren’t capable of processing the number of transactions required for mass adoption — but it doesn’t matter, they’re only really used for speculation.
These are the findings of the Congressional Research Service (CRS), detailed in a study published May 10 (spotted by Roll Call ).
CRS discovered that while demand for cash in the US is steadily growing, its usage for payments is becoming less common. Despite this, people haven’t turned to Bitcoin as much as industry insiders might have hoped.
“To date, the migration away from cash has largely been in favor of traditional non-cash payment systems; however, some observers predict new alternative systems will play a larger role in the future,” reads the report.
Traditional non-cash payment systems include credit and debit cards, as well as online banking apps like Apple Pay and Venmo.
“Such alternative systems aim to address some of the inefficiencies and risks of traditional non-cash systems, but face obstacles to achieving that aim and involve costs of their own,” CRS continued.
“Private systems using distributed ledger technology, such as cryptocurrencies, may not serve the main functions of money well and face challenges to widespread acceptance and technological scalability.”
Bitcoin price does not reflect adoption
Among other things, the study maintained that Bitcoin‘s price data doesn’t accurately reflect its overall demand.
Instead, CRS looked at how many times Bitcoins are transferred each day, and found the number of transactions to be “miniscule” compared to those of traditional systems.
“ For example, in 2019 through March 12, the Bitcoin system averaged about 310,000 transactions per day globally, a pace that would result in about 113 million transactions per year,” reported CRS.
On the other hand, CRS determined more than 144 billion traditional non-cash payments were made in 2015, almost 1,275 times the averaged number of yearly Bitcoin transactions.
Even further, researchers described this as a measure of how many times two parties have exchanged Bitcoin. This kind of data does not relay how many times Bitcoin has been used to buy something.
“Some portion of those exchanges, possibly a significantly large portion, is driven by investors giving fiat currency to an exchange to buy and hold the Bitcoin as an investment. In those transfers, Bitcoin is not acting as money (i not being exchanged for a good or service),” said CRS.
Government may intervene to support (or crush) cash
CRS found it difficult to envision an economy where cash had been replaced, at least in the near future.
Still, its report conceded cash‘s “hegemony as a payment system appears to have come to an end,” and that the ubiquity of its acceptance in the real-world does seem precarious.
“If non-cash payment systems significantly displace cash and cash usage, and acceptance significantly declines, there would be a number of effects (both positive and negative) on the economy and society,” warned CRS.
“Now or in the near future, policymakers may face decisions about whether to impede or hasten the decline of cash and consider the implications of doing so,” it added.
You can read the report in full here .
Moonday Morning: Canadian Bitcoin exchange hacked for $5.5M – ‘we cannot refund anything’
It’s Monday which means only one thing – it’s also Moonday. We’re so into blockchain and cryptocurrency we don’t even call Monday Monday anymore. It is, and will always be, Moonday in our hearts.
You know the drill, here’s what dropped over the weekend:
1. A major Singaporean energy provider has launched a blockchain-powered marketplace for renewable energy . The energy provider claims blockchain will be used to track the ownership of renewable energy certificates.
2. Canadian Bitcoin exchange, MapleChange, has been hacked . All funds are gone and it looks like customers won’t be getting their money back . Some sources say $5.5 million (913 BTC) was taken, and some are saying it’s not a hack, but an exit scam. Whatever happened, it’s not sounding so sweet anymore, is it?
3. Another university seems to think it’s a good idea to accept payments in Bitcoin. France’s Financia Business School will allow students of its post-graduate finance and blockchain courses to pay in cryptocurrency . The school’s theory is that this will lessen the burden on foreign students who have to otherwise pay for expensive currency transfers.
4. The Supreme Court of India has asked the country’s government to make its mind up on cryptocurrencies . The Royal Bank of India has already banned banks from working with cryptocurrency businesses , but there’s still much debate over what stance the country should take.
5. Technology giant Sony has announced the development of a “contactless” multi-purpose cryptocurrency hardware wallet . Sony claim’s the device can be used to secure not just cryptocurrency private keys but also the private keys of other data managed on blockchains.
6. While everyone’s been talking about how Malta is blockchain’s “place to be,” Israel has been working hard and is now home to over 200 cryptocurrency or blockchain-based startups .
Well there you have it, an exhausting, non-exhaustive round-up of the cryptonews from the last weekend. Cryptocurrency never sleeps, so we don’t either.
