This week, the Securities and Exchange Commission (SEC) published a consent order related to an initial coin offering (ICO) conducted by Blockchain of Things, Inc., a New York-based startup focused on providing a development platform for digital assets and messaging applications. As part of its settlement agreement with the SEC, the company agreed to return all invested funds (nearly $13 million), pay a $250,000 fine and comply with U.S. securities laws moving forward. The company entered the agreement based on its sales of digital tokens to U.S. consumers in December 2017 through an ICO after the SEC's publication of the "DAO Report," in which the SEC warned that ICOs may be considered securities offerings.
In Seattle, law enforcement sentenced a 40-year-old man this week for selling thousands of doses of fentanyl on the dark web. More than $1 million in cryptocurrency and other holdings were seized from the man in December 2018, which the man admitted were proceeds obtained from his crimes. Law enforcement identified the man after his contact information and dark web monikers were found in the possession of other drug traffickers in California and Oklahoma.
Authorities in the U.S. recently indicted two men for subscriber identification module (SIM) swapping. A SIM card is a technology used to identify and authenticate mobile phone users. SIM swapping occurs when fraudsters persuade – usually by force, trickery, bribery or extortion – mobile carrier employees to swap out cell phone numbers from victims' SIM cards to those in possession of the fraudsters. According to the indictments, both men accused were able to leverage this scheme to access victims' cryptocurrency accounts. One of the indicted men allegedly used the unlawful proceeds to purchase real property, including royalty rights in 20 songs and a Rolex watch, while the other man walked away with more than $1 million using "little more than an iPhone and computer."
Two Canadian residents were arrested this week in connection with a scheme to steal bitcoin from a resident in the U.S. The fraudsters executed the scheme by launching a Twitter account designed to trick users of a Hong-Kong based cryptocurrency exchange into believing it was a customer service portal. In doing, so the fraudsters obtained one victim's email and digital exchange login credentials, allowing them to abscond with approximately $160,000 worth of the victim's bitcoin.
For more information, please refer to the following links:
- Issuer Settles Unregistered ICO Charges, Agrees to Return Funds and Register Tokens
- Two Canadian Nationals Plead Guilty for Bitcoin Fraud
- Dark web fentanyl dealer sentenced to 7 years in prison
- Pennsylvania Man Indicted In "SIM Swapping" Scheme To Steal Cryptocurrency
- D.A. Vance: "Sim Swapping" Identity Thief Indicted for Stealing $1 Million in Cryptocurrency
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.