Another ponzi scheme (Cryptocurrency exchange FTX) bites the dust

[najaB]

But the linked website was a fake copy of the BBC News website, containing a report that Rishi Sunak had done an interview on ITV's This Morning to promote crypto investments. That was a lie.

Unfortunately not a lie as long as it contained somewhere (in the smallest possible font, no doubt) a statement to the effect of "This is an advertisement, not an actual news story".

 

[DelayRepay]

Unfortunately not a lie as long as it contained somewhere (in the smallest possible font, no doubt) a statement to the effect of "This is an advertisement, not an actual news story".

I don't think it did contain a disclaimer. But in any case it was still a lie, as it used BBC News branding but was not a BBC News article. The lie being that they were. Such an 'advert' would not be allowed in the UK.

It doesn't matter anyway - it was a scam and the website has been taken down.

 

[341o2]

This isn't the first time, there was M T Gox, a bitcoin exchange that crashed and investors were afraid that they had lost everything. Founded in 2010, it ceased trading in 2014.
I don't see Bitcoin as a Ponzi scheme, because the scheme of the same name is a fraudulent investment scheme, with monies from later recruits being used to provide the profits for earlier recruits. Eventually, the scheme will collapse, with those at the bottom of the pyramid standing very little chance of getting their money back, let alone making a profit.

 

[Busaholic]

This isn't the first time, there was M T Gox, a bitcoin exchange that crashed and investors were afraid that they had lost everything. Founded in 2010, it ceased trading in 2014.
I don't see Bitcoin as a Ponzi scheme, because the scheme of the same name is a fraudulent investment scheme, with monies from later recruits being used to provide the profits for earlier recruits. Eventually, the scheme will collapse, with those at the bottom of the pyramid standing very little chance of getting their money back, let alone making a profit.

At the very least bitcoin (generic name) can be compared to timeshare i.e. potentially a wonderful thing to get in on the ground floor, so to speak but woe betide anyone who becomes a purchaser of given weeks. I never could understand why anyone sane could think it a good idea, given the snake oil salesmen doing the hustling and selling. All that money upfront - what could possibly go wrong?

 

[brad465]

"And another one gone..."

Crypto firm BlockFi files for bankruptcy after FTX collapse

The collapse of FTX had already forced BlockFi to suspend most activity on its platform.

www.bbc.co.uk

The troubled crypto firm BlockFi has filed for bankruptcy in the US, as the dramatic collapse of FTX continues to reverberate across the industry.
The company had already halted most activity on its platform, citing "significant exposure" to FTX.
BlockFi said it was seeking court protection to restructure, settle its debts and recover money for investors.
BlockFi had received a rescue deal from FTX earlier this year as the values of cryptocurrencies plunged.
But FTX, a crypto exchange, ran into its own problems this month, as people rushed to pull money from the platform amid doubts about its finances.
Former boss Sam Bankman-Fried, the so-called "crypto king", resigned and the firm declared bankruptcy.
The collapse has shaken faith in the crypto industry and drawn scrutiny from regulators.
BlockFi, which offered loans and other financial services backed by borrowers' crypto assets, described the collapse of FTX as "shocking".

In a court filing, New Jersey-based BlockFi said it owed money to more than 100,000 creditors. It listed crypto exchange FTX as its second-largest creditor, with $275m owed on a loan extended earlier this year.
It also owes $30m to the US financial regulator, the Securities and Exchange Commission, which earlier this year found the firm had failed to properly register its products and misled the public about the risk levels in its loan portfolio and lending activity.
BlockFi said the Chapter 11 bankruptcy filing would allow the firm to develop a "reorganization plan that maximizes value for all stakeholders, including our valued clients".
The company said it had almost $257m in cash on hand.
"From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders," said Mark Renzi of Berkeley Research Group, the company's financial advisor.
Founded in 2017, BlockFi had promoted itself as building a bridge between cryptocurrencies and traditional financial products.
It has won hundreds of millions of investment from big-name tech investors, including Bain Capital Ventures and Tiger Global, in recent years. Last year, as crypto values soared, it said it managed more than $15bn in assets.
It is not the only firm to be hit after cryptocurrency prices plunged earlier this year. The value of the most well-known digital currency, Bitcoin, dropped from more than $64,000 a year ago to less than $20,000 in June.
Celsius Network and Voyager Digital are among the other firms that have also filed for bankruptcy.

There was also a report from police data that Crypto Fraud has gone up by a third in the UK, which is odd for something that is synonymous with fraud.

 

[RailWonderer]

Those scam sites are like Wrack a Mole, as soon as one gets taken down another pops up to take its place with the same fake articles.

The server that hosts these fake pages stays up, it's only the domain names that get blacklisted. So they use a new domain name with something like a .to extention (Tonga) and carry on.

 

[Tetchytyke]

The server that hosts these fake pages stays up, it's only the domain names that get blacklisted. So they use a new domain name with something like a .to extention (Tonga) and carry on

And that's if the domain registrar plays ball. There is one "privacy" registrar in the US that outright refuses any request that doesn't have a US Court warrant attached.

The biggest issue is that Google and Meta both have absolutely zero interest in dealing with the dodgy adverts that push these websites. There's money to be made and no repercussions whatsoevet for accepting advertising from scammers, so why would they care? It took them years to stop allowing adwords adverts for things like "passport application".

 

[DelayRepay]

The biggest issue is that Google and Meta both have absolutely zero interest in dealing with the dodgy adverts that push these websites. There's money to be made and no repercussions whatsoevet for accepting advertising from scammers, so why would they care? It took them years to stop allowing adwords adverts for things like "passport application".

This is one reason why the Government need to get a hurry up with the Online Safety Bill - although the requirements on social media platforms to prevent scam adverts have been watered down.

Some in the banking industry think the tech companies should be contributing to the costs of reimbursing victims of fraud where the fraud started with an advert on their platform. They'd soon change their tune then.

 

[najaB]

Some in the banking industry think the tech companies should be contributing to the costs of reimbursing victims of fraud where the fraud started with an advert on their platform. They'd soon change their tune then.

Problem is proving it. Yes, someone saw the advert but was that the reason that they got caught in the scam?

 

[Tetchytyke]

This is one reason why the Government need to get a hurry up with the Online Safety Bill - although the requirements on social media platforms to prevent scam adverts have been watered down.

Worthy of a separate thread, but I have serious misgivings about the Online Safety Bill, which seems to be more about clamping down on free speech under the guise of protecting children/old ladies/etc.

I have issues with the "harms" aspect. Not promoting self harm, as an example, is something we'd all agree is A Good Thing. But explaining to someone that you'd rather they didn't self-harm but, if they must, here's how to self-harm safely: legal or illegal? I wouldn't want to have the argument with an entry-grade police officer seeing how they went to town with Covid regs.

It also doesn't seem to include online advertising away from social media, e.g. the spammy Outbrain links that make reading local newspaper websites such a joyless experience.

A much more straightforward legal change would be to make online advertisers be treated as publishers, and so liable for what adverts they display. You'd bet they'd suddenly find a way to prevent the endless counterfeiters on Instagram.

 

[brad465]

Sam Bankman-Fried has been arrested:

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on.ft.com

Sam Bankman-Fried, the former chief executive of bankrupt crypto exchange FTX has been arrested in the Bahamas.

 

[Cloud Strife]

Sam Bankman-Fried has been arrested:

I suspect that they're going to make an example out of him. He made the US look like a laughing stock with their lack of regulation, and I suspect it won't go down well within the halls of power.

 

[philthetube]

Some in the banking industry think the tech companies should be contributing to the costs of reimbursing victims of fraud where the fraud started with an advert on their platform. They'd soon change their tune then.

Problem is proving it. Yes, someone saw the advert but was that the reason that they got caught in the scam?

If they saw the ad and got caught in the scam, that is good enough. let the tech companies pay

 

[najaB]

If they saw the ad and got caught in the scam, that is good enough. let the tech companies pay

Not sure that's good enough. Taking that argument to extremis, if a scam company put an ad on the side of a bus is the bus company (or the ad company) responsible for the losses of anyone who the bus drove past?

 

[philthetube]

Not sure that's good enough. Taking that argument to extremis, if a scam company put an ad on the side of a bus is the bus company (or the ad company) responsible for the losses of anyone who the bus drove past?

Probably not, but they should, something like this is difficult to prove either way.

 

[DelayRepay]

If they saw the ad and got caught in the scam, that is good enough. let the tech companies pay

Not sure that's good enough. Taking that argument to extremis, if a scam company put an ad on the side of a bus is the bus company (or the ad company) responsible for the losses of anyone who the bus drove past?

The current approach in the UK is that the bank the payment was sent from can be liable (depending on the circumstances). This is currently a voluntary code, but is expected to become a requirement under regulation:

APP scams

PSR continues to tackle APP scams to protect payment users from fraud and ensure fair outcomes for scam victims in the UK.

www.psr.org.uk

If the aim of this regulation is to reduce the number of scams, then placing the financial liability on the party who facilitated the scam will provide an incentive to change behaviours. The problem the banks face is that by the time the payment is made, the customer has already been scammed and the bank has a hard job persuading them not to make the payment. If the cost of reimbursement was shared with the tech companies who allowed the scam to be advertised on their platforms then they would have an incentive not to carry scam adverts.

I understand proving it would be difficult although I don't think it would be impossible.

As for the bus advert, I think the bus company (or whoever is responsible for the adverts on the busses) should be fined with the fine going to a central fund to reimburse victims. But to be honest the problem is not adverts on buses, it's adverts on social media platforms and search engines.