'Satoshi' Craig Wright Is Being Sued For $10 Billion For Stealing His Partner's Bitcoin ( 92

Craig Wright, the nChain chief scientist who previously claimed to be the pseudonymous bitcoin creator Satoshi Nakamoto, is being sued for a whopping $10 billion for stealing $5 billion in bitcoin from a former business partner. CoinDesk reports: The lawsuit is being brought by Ira Kleiman on behalf of the estate of his brother, Dave, who has been linked to the earliest days of bitcoin. Kleiman, a forensic computer investigator and author, passed away in 2013 following a battle with MRSA. At the heart of the new lawsuit, according to a complaint filed in the U.S. District Court for the Southern District of Florida on Feb. 14, is an alleged hoard of more than 1.1 million bitcoins, which Ira Kleiman's lawyers say is worth in excess of $10 billion. He is being represented by Boies Schiller Flexner LLP.

Wright, court records show, has been accused of allegedly conducting "a scheme against Dave's estate to seize Dave's bitcoins and his rights to certain intellectual property associated with the Bitcoin technology." "As part of this plan, Craig forged a series of contracts that purported to transfer Dave's assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave's signature on them," attorneys for the plaintiff wrote. Included alongside the complaint are a number of additional filings, including the business registration for a firm called W&K Info Defense Research LLC, in which Kleiman and Wright were business partners. In addition to the roughly 1.1 million bitcoins, Ira Kleiman is also seeking compensation for the intellectual property his lawyers claim arose from the partnership between his deceased brother and Wright.


We Will Regulate Bitcoin if Risks Are Not Tackled, EU Finance Head Says ( 143

The European Union has warned that it will regulate cryptocurrencies if the risks exposed by the meteoric rise of bitcoin and its ilk are not addressed. The Guardian: The boom and bust of cryptocurrencies has seen some investors make millions where others have suffered heavy losses. Bitcoin, which now trades around $9,000 a token but recently dropped to less than $6,000, leads the pack rising nearly 2,000% to just under $20,000 in 2017, fuelling a global investment craze. "This is a global phenomenon and it's important there is an international follow-up at the global level," Valdis Dombrovskis, the EU's financial chief, said on Monday. "We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging."

Nearly Half of 2017's Cryptocurrencies Have Already Failed ( 28

An anonymous reader shares an Engadget report: The surging price of bitcoin (among others) in 2017 led more than a few companies to hop on the cryptocurrency bandwagon with hopes of striking it rich almost overnight. Many of their initial coin offerings seemed dodgy from the outset... and it turns out they were. has conducted a study of ICOs tracked by Tokendata, and a whopping 46 percent of the 902 crowdsale-based virtual currencies have already failed. Of these, 142 never got enough funding; another 276 have either slowly faded away or were out scams.
The Almighty Buck

Is Cryptocurrency Threatening Earnings at Bank of America? ( 49

An anonymous reader quotes The Next Web: One of the world's largest financial institutions admitted in its annual report that cryptocurrency is a looming threat to its business model. According to a report filed with the SEC by Bank of America, "Clients may choose to conduct business with other market participants who engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies. Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of clients to do business with us."

Bitcoin Exchange Accidentally Allowed Customers To Buy Coins For $0 ( 51

AmiMoJo writes: "A system glitch at cryptocurrency exchange site Zaif enabled users to obtain digital money for free, with one apparently "purchasing" Bitcoin valued at $20,000,000,000,000 and then attempting to cash in on it..." according to the Japanese newspaper Asahi Shimbun. "The glitch, which lasted for 18 minutes from 5:40 p.m. to 5:58 p.m. on Feb. 16, affected Zaif's price calculation system, enabling customers to buy cryptocurrencies for nothing."

CoinDesk adds that "At least one customer attempted to resell their bitcoin, but the large amount of the cryptocurrency offered soon drew attention even outside the exchange. The firm later cancelled the transactions and corrected the users' balances. However, a source suggests that the correction is still being agreed with one of the seven users who attempted to transfer the free bitcoin away from the Zaif platform."


Poland's Central Bank Accused of Paying YouTubers To Make Videos That Attack the Legitimacy of Cryptocurrencies ( 76

Poland's central bank has been accused of hiring YouTubers to "start a smear campaign" against cryptocurrencies in the country, Business Insider reports. From the story: According to Business Insider Poland, the Narodowy Bank Polski spent around 91,000 zloty ($27,300) on a marketing campaign designed to attack the legitimacy of cryptocurrencies. The money was spent on platforms including Google and Facebook, but was also used to pay a Polish Youtube partner network called Gamellon. The Gamellon network reportedly represents many of Poland's top YouTubers, including popular prankster Marcin Dubiel. In December, Dubiel published a video titled "STRACILEM WSZYSTKIE PIENIADZE?!" -- which loosely translates as "I LOST ALL MY MONEY?!" In the satirical video, Dubiel invests all his money in a fake cryptocurrency called Dubielcoin, gets rich, but then sees its value plunge and loses everything. It has racked up over 500,000 views.

Venezuela Launches Oil-Backed Cryptocurrency ( 178

Venezuela has launched a cryptocurrency backed by oil in an attempt to bypass tough economic sanctions imposed by the U.S. government. "The 'Petro' is intended to bolster the country's crumbling economy, which has been suffering from hyperinflation and devaluation for years," reports the BBC. "Venezuela claims it is the world's first sovereign cryptocurrency." From the report: Critics say the move is a desperate attempt by Caracas to raise cash at a time when Venezuela lacks the ability to repay its $150 billion of foreign debt. Opposition leaders said the sale constitutes an illegal issuing of debt, while the US Treasury Department warned it may violate sanctions imposed last year. The government says the currency aims to circumvent US sanctions on the economy. President Nicolas Maduro has said each tokens will be backed by a barrel of Venezuelan crude. The Latin American country has the world's largest proven oil reserves. A total of 100 million Petros will be sold, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. The official website published a guide to setting up a virtual wallet in which to hold the cryptocurrency, but did not provide a link for actually doing so on Tuesday.

FCC Orders a Brooklyn Man To Turn Off His Bitcoin Miner Because It Was Interfering With T-Mobile's Wireless Network ( 207

A New York City resident was ordered to turn off his bitcoin miner after the Federal Communications Commission discovered that it was interfering with T-Mobile's wireless network. From a report: After receiving a complaint from T-Mobile about interference to its 700MHz LTE network in Brooklyn, New York, FCC agents in November 2017 determined that radio emissions in the 700MHz band were coming from the residence of a man named Victor Rosario. "When the interfering device was turned off the interference ceased," the FCC's enforcement bureau told Rosario in a "Notification of Harmful Interference" yesterday. "You identified the device as an Antminer S5 Bitcoin Miner. The device was generating spurious emissions on frequencies assigned to T-Mobile's broadband network and causing harmful interference." The FCC told Rosario that continued interference with T-Mobile's network while operating the device would be a violation of federal laws "and could subject the operator to severe penalties, including, but not limited to, substantial monetary fines, in rem arrest action to seize the offending radio equipment, and criminal sanctions including imprisonment."

Hackers Hijacked Tesla's Amazon Cloud Account To Mine Cryptocurrency 29

An unidentified hacker or hackers broke into a Tesla-owned Amazon cloud account and used it to "mine" cryptocurrency, security researchers said. The breach also exposed proprietary data for the electric carmaker. From a report: The researchers, who worked for RedLock, a 3-year-old cybersecurity startup, said they discovered the intrusion last month while trying to determine which organization left credentials for an Amazon Web Services (AWS) account open to the public Internet. The owner of the account turned out to be Tesla, they said. "We weren't the first to get to it," Varun Badhwar, CEO and cofounder of RedLock, told Fortune on a call. "Clearly, someone else had launched instances that were already mining cryptocurrency in this particular Tesla environment." The incident is the latest in a string of so-called cryptojacking attacks, which involve thieves hijacking unsuspecting victims' computers to generate virtual currencies like Bitcoin. The schemes have seen a resurgence in popularity as cryptocurrency prices have soared over the past year. In a statement, Tesla said, "We maintain a bug bounty program to encourage this type of research, and we addressed this vulnerability within hours of learning about it. The impact seems to be limited to internally-used engineering test cars only, and our initial investigation found no indication that customer privacy or vehicle safety or security was compromised in any way."

Salon Magazine Mines Monero On Your Computer If You Use an Ad Blocker ( 314

dryriver shares a report from BBC: News organizations have tried many novel ways to make readers pay -- but this idea is possibly the most audacious yet. If a reader chooses to block its advertising, U.S. publication Salon will use that person's computer to mine for Monero, a cryptocurrency similar to Bitcoin. Creating new tokens of a cryptocurrency typically requires complex calculations that use up a lot of computing power. Salon told readers: "We intend to use a small percentage of your spare processing power to contribute to the advancement of technological discovery, evolution and innovation." The site is making use of CoinHive, a controversial mining tool that was recently used in an attack involving government websites in the UK, U.S. and elsewhere. However, unlike that incident, where hackers took control of visitors' computers to mine cryptocurrency, Salon notifies users and requires them to agree before the tool begins mining.

Coinbase is Erratically Overcharging Some Users and Emptying Their Bank Accounts 144

A growing number of Coinbase customers are complaining that the cryptocurrency exchange withdrew unauthorized money out of their accounts. From a report: In some cases, this drained their linked bank accounts below zero, resulting in overdraft charges. In a typical anecdote posted on Reddit, one user said they purchased Bitcoin, Ether, and Litecoin for a total of $300 on February 9th. A few days later, the transactions repeated five times for a total of $1,500, even though the user had not made any more purchases. That was enough to clear out this user's bank account, they said, resulting in fees. [...] Coinbase representatives have been responding to similar complaints on Reddit for about two weeks, but the volume of complaints seems to have spiked over the last 24 hours. Similar complaints have popped up on forums and Twitter.

Energy Riches Fuel Bitcoin Craze For Speculation-shy Iceland ( 99

Iceland is expected to use more energy "mining" bitcoins and other virtual currencies this year than it uses to power its homes. From a report: With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy. The new industry's relatively sudden growth prompted lawmaker Smari McCarthy of Iceland's Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country's catastrophic 2008 banking crash. "Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government," McCarthy told The Associated Press. "These companies are not doing that, and we might want to ask ourselves whether they should."

Cryptocurrency Classes Are Coming To Campus ( 81

While the price of Bitcoin has dropped since Christmas, the virtual currency boom has shown no signs of cooling off in the more august precincts of America's elite universities. The New York Times: Several top schools have added or are rushing to add classes about Bitcoin and the record-keeping technology that it introduced, known as the blockchain. Graduate-level classes this semester at Carnegie Mellon, Cornell, Duke, the Massachusetts Institute of Technology and the University of Maryland, among other places, illustrate the fascination with the technology across several academic fields, and the assumption that it will outlast the current speculative price bubble. "There was some gentle ribbing from my colleagues when I began giving talks on Bitcoin," said David Yermack, a business and law professor at New York University who offered one of the first for-credit courses on the topic back in 2014. "But within a few months, I was being invited to Basel to talk with central bankers, and the joking from my colleagues stopped after that." For a class this semester, Mr. Yermack originally booked a lecture hall that could fit 180 students, but he had to move the course to the largest lecture hall at N.Y.U. when enrollment kept going up. He now has 225 people signed up for the class.

Hackers Hijack Government Websites To Mine Crypto-Cash ( 48

BBC reports: The Information Commissioner's Office (ICO) took down its website after a warning that hackers were taking control of visitors' computers to mine cryptocurrency. Security researcher Scott Helme said more than 4,000 websites, including many government ones, were affected. He said the affected code had now been disabled and visitors were no longer at risk. The ICO said: "We are aware of the issue and are working to resolve it." Mr Helme said he was alerted by a friend who had received a malware warning when he visited the ICO website. He traced the problem to a website plug-in called Browsealoud, used to help blind and partially sighted people access the web. The cryptocurrency involved was Monero -- a rival to Bitcoin that is designed to make transactions in it "untraceable" back to the senders and recipients involved. The plug-in had been tampered with to add a program, Coinhive, which "mines" for Monero by running processor-intensive calculations on visitors' computers. The Register: A list of 4,200-plus affected websites can be found here: they include The City University of New York (, Uncle Sam's court information portal (, Lund University (, the UK's Student Loans Company (, privacy watchdog The Information Commissioner's Office ( and the Financial Ombudsman Service (, plus a shedload of other and sites, UK NHS services, and other organizations across the globe.

Russian Nuclear Scientists Arrested For 'Bitcoin Mining Plot' ( 84

Russian security officers have arrested several scientists working at a top-secret Russian nuclear warhead facility for allegedly mining crypto-currencies, BBC reported Friday, citing local media. From the report: The suspects had tried to use one of Russia's most powerful supercomputers to mine Bitcoins, media reports say. The Federal Nuclear Centre in Sarov, western Russia, is a restricted area. The centre's press service said: "There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining." The supercomputer was not supposed to be connected to the internet -- to prevent intrusion -- and once the scientists attempted to do so, the nuclear centre's security department was alerted. They were handed over to the Federal Security Service (FSB), the Russian news service Mash says. "As far as we are aware, a criminal case has been launched against them," the press service told Interfax news agency.

Arizona Introduces Bill That Would Allow Residents To Pay Taxes In Bitcoin ( 109

In a bid to attract businesses involved in blockchain and cryptocurrencies, Arizona lawmakers have proposed a bill that would allow the state's citizens to pay their taxes in bitcoin. "Arizona State Rep. Jeff Weninger, who introduced the bill, said it was a signal to everyone in the United States, and possibly throughout the world, that Arizona was going to be the place to be for blockchain and digital currency technology in the future," reports Investopedia. From the report: Weninger, a Republican, also cited the ease of making online payments through the cryptocurrency "while you're watching television," as another reason. But he did not divulge much detail about the implementation of such a system. That might be the reason why Weninger faces an uphill battle in getting the bill approved by the state legislature. Bitcoin's price volatility is already being cited as a possible roadblock to implementing such a measure by state legislators. Arizona state senator Steve Farley, a Democrat who's running for governor, said the bill puts the "volatility burden" of bitcoin's price on taxpayers who make payments in U.S. dollars. "It would mean that the money goes to the state and then the state has to take responsibility of how to exchange it," Farley said.

Bitcoin Won't Be the Dark Web's Top Cryptocurrency For Long ( 79

Bitcoin has essentially become the poster child for cryptocurrencies, and that's a problem for cybercriminals dealing on the dark web. From a report: Researchers from Recorded Future, a threat intelligence company, looked through 150 of the dark web's top marketplaces and forums and found that bitcoin's boom is driving shady characters away from the cryptocurrency. The rise of bitcoin has brought cryptocurrency -- digital alternatives to government-issued money -- to the mainstream, enticing people who are looking to get rich quick. Last December, bitcoin hit its all-time high at nearly $20,000, but it has since slumped and as of Thursday is trading at a little over the $8,000 mark. But before it was a massive investment that millionaires bought, it was the dark web's currency of choice, thanks to its decentralized and anonymous structure.

Twitter Bans Notorious Bitfinex and Tether Critic Bitfinex'ed ( 73

Twitter has officially suspended Bitfinex'ed -- a notorious internet sleuth who has long speculated that popular exchange desk Bitfinex has quietly been printing its dollar-pegged Tether digital tokens out of thin air, a move that could lead to the collapse of Bitcoin and perhaps even the entire market, The Next Web reports. From the report: In an email to TNW, Bitifinex'ed said that Twitter has yet to clarify the reasons for the suspension. "This account has been suspended," the message reads. It is worth noting that in addition to the claims made against Bitfinex and Tether, Bitfinex'ed has previously accused other well-known figures within the crypto-community of foul play. Indeed, earlier in January the anonymous investigator suggested Litecoin Charlie Lee might have engaged in insider trading during his time at Coinbase. Lee ultimately denied these claims. In the aftermath of this altercation, waves of Lee supporters took to Twitter to condemn the premises of the piece Bitfinex'ed authored.

Get Ready For Most Cryptocurrencies to Hit Zero, Goldman Says ( 276

An anonymous reader shares a report: The tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse, according to Goldman Sachs Group's global head of investment research. Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they're replaced by a small set of future competitors, Goldman's Steve Strongin said in a report dated Feb. 5. While he didn't posit a timeframe for losses in existing coins, he said recent price swings indicated a bubble and that the tendency for different tokens to move in lockstep wasn't rational for a "few-winners-take-most" market. "The high correlation between the different cryptocurrencies worries me," Strongin said. "Because of the lack of intrinsic value, the currencies that don't survive will most likely trade to zero."

Senate Cryptocurrency Hearing Strikes a Cautiously Optimistic Tone ( 44

An anonymous reader quotes a report from TechCrunch: In a hearing today before the Senate Banking Committee, Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman Christopher Giancarlo opened up about what the near-term U.S. regulatory fate of cryptocurrency might look like. In a week of plunging prices and bad news, the hearing struck a tone that coin watchers could reasonably interpret as surprisingly optimistic. Over the course of the open hearing, Clayton and Giancarlo traded testimony over what can be regulated, what should be regulated and how, while offering a broader outlook on the long-term future of virtual currency markets and blockchain tech.

The testimony drew a useful distinction among three pillars of the virtual currency ecosystem (for lack of a better unifying term): cryptocurrencies, "a replacement for dollars;" ICOs, "like a stock offering;" and distributed ledger technologies, or the technical framework generally known as blockchain. Throughout the hearing, on the SEC side, Clayton struck a relatively solemn tone focused on ICO fraud concerns, while the CFTC's Giancarlo came across as genuinely enthusiastic and curious about the emerging market.
When asked about the intrinsic value of cryptocurrency, Clayton said: "There are a lot of smart people who think there's something to the value of cryptocurrency and the international exchange and I'm not seeing those benefits manifesting themselves in the market yet. I look at this from the perspective of Main Street investors and they should understand that."

On ICOs as a security: "I believe every ICO I've seen is a security... You can call it a coin but if it functions as a security, it is a security... Those who engage in semantic gymnastics or elaborate re-structuring exercises in an effort to avoid having a coin be a security are squarely in the crosshairs of our enforcement provision."

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