Ridgewood NJ, May 22, 2021, marked the eleven-year anniversary of the first Bitcoin transaction, in which a Florida man paid for two pizzas with the cryptocurrency. The day has become part of folklore, not because of the transaction, but more the price: the man in question paid 10,000 Bitcoins, which today is worth over $80 million, for the two pizzas.
On May 22, 2010, now known as Bitcoin Pizza Day, Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John’s pizzas. Organized on bitcointalk forum, the Florida man reached out for help. “I’ll pay 10,000 bitcoins for a couple of pizzas… like maybe 2 large ones so I have some left over for the next day,” Hanyecz wrote.
The man who took up Hanyecz’s offer and bought the two pizzas for him in exchange for the 10,000 Bitcoins. Even then the recipient of the Bitcoins got himself a bargain, paying $25 for the pizzas, while 10,000 Bitcoins were worth around $41 at the time.
We know the 22nd was Saturday but we are trying to make this a “Monday Holiday” .
Ridgewood NJ, Cryptocurrency can be stored on small physical drives securely, unconnected to the internet. The IRS is looking for help to break into cryptocurrency hardware wallets, according to a document posted on the agency website in March of this year. The tax collection agency is now looking for contractors to come up with solutions to hack into wallets that would be of interest to investigations. While the agency may be in possession of a hardware wallet as part of a case, they may not be able to access it without the suspect’s cooperation. The IRS is looking for tools it can reliably use in multiple cases.
Haddonfield NJ, a New Jersey, man under investigation by the Atlantic County Prosecutor’s Office for child pornography-related offenses was indicted today for allegedly paying $20,000 in bitcoin to have the 14-year old child victim murdered, Acting U.S. Attorney Rachael A. Honig announced.
Ridgewood NJ, in a new study comparing searches to gage interest in Crypto currencies India ranked second with 804,000 annual online searches about cryptocurrency.
According to Reuters the government of India is planning to introduce legislation banning cryptocurrency, Reuters reports. The law would impose fines on anyone who trades, mines, or even holds cryptocurrency. The government has a comfortable majority in parliament, giving the proposal a good shot at becoming law.
by Jim Kreidler
Consumer Education Specialist, FTC
You’ve heard of romance scams. But do you know how they happen? They start when scammers create fake profiles on dating apps or social media. Then, those scammers strike up a relationship with their targets and work to build trust. Sometime later, they make up a story and ask for money.
Ridgewood NJ, Laszlo Hanyecz said he wouldn’t spend his Bitcoins on a Tesla. Laszlo Hanyecz knows what he’s talking about, in 2010, Hanyecz paid 10,000 Bitcoins, worth about $446 million at current prices, for two pizzas.
It comes as no surprise that investors have started to show interest in the digital financial world. This is because of their skepticism towards traditional banks and the future of paper money. Cryptocurrencies such as bitcoin caught the attention of several traders owing to their promising future profits. Even though it is easy to own and trade digital assets, you need to be aware of a couple of points. Since jumping headfirst in business guarantees failure, we are going to provide you with some information to help you make your first purchase and trade.
NEWARK NJ, A Romanian man arrested in Germany admitted today to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million, U.S. Attorney Craig Carpenito announced.
Ridgewood NJ, If you own cryptocurrency, you need to know that the IRS has owners of cryptocurrency in its sights because many cryptocurrency owners are not reporting or paying taxes on their cryptocurrency transactions. In fact, the IRS is so focused on this issue that it recently issued warning letters to over 10,000 taxpayers it suspects might have an under-reporting problem.
About Cryptocurrency – If you are unfamiliar with the term cryptocurrency, the short definition is a form of digital money that is not controlled by any central authority. The first cryptocurrency created was Bitcoin, back in 2009. Since then, over 4,000 other cryptocurrencies have been created. Cryptocurrency can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, euros, and other real or virtual currencies.
Ridgewood NJ, Attorney General Gurbir S. Grewal and the Division of Consumer Affairs announced that the Bureau of Securities (“the Bureau”) today issued two emergency orders to stop online cryptocurrency-related investment entities from fraudulently offering unregistered securities in New Jersey.
The Cease and Desist Orders against Zoptax LLC a/k/a Zoptax and Unocall were announced today as part of “Operation Cryptosweep,” an international crackdown on fraudulent Initial Coin Offerings (“ICOs”) and crypto currency-related investment schemes.
the fly asks ,”Is it true that someone in the Village Hall was using the Village website to mine Cryptocurrency earlier in the year?” ,we all remember the story of “coin boy” ,who pilfered the meter money , but the fly has heard and even more salacious tale of “crypto mining” on the tax payers dime with Village computing power .
NEWARK NJ, Attorney General Gurbir S. Grewal and the Division of Consumer Affairs announced that the Bureau of Securities (“the Bureau”) today issued three emergency orders to stop online cryptocurrency-related investment entities from fraudulently offering unregistered securities in New Jersey.
The Cease and Desist Orders against Bullcoin Foundation a/k/a Bullcoin Gold (“Bullcoin”,) Trident d/b/a Trident Crypto Index Fund (“Trident”,) and Springcryptoinvest were announced today as part of “Operation Cryptosweep,” an international crackdown on fraudulent Initial Coin Offerings (“ICOs”) and crypto currency-related investment products.
More than 40 other state and provincial securities regulators in the United States and Canada are participating in the sweep, which is being coordinated by the North American Securities Administrators Association (NASAA), of which the Bureau is a member.
“New Jersey’s Bureau of Securities has been a national leader in proactively protecting investors against the significant threat of fraudulent activity involving initial coin offerings and cryptocurrency-related investment products,” said Attorney General Grewal. “Today the Bureau joins securities regulators across the nation and beyond in sending a message that we will vigilantly safeguard our financial industry from schemes and scams involving cryptocurrencies.”
Operation Cryptosweep has resulted in nearly 70 investigations and 35 completed or pending enforcement actions since the beginning of May. NASAA members are conducting additional investigations into potentially fraudulent conduct that may result in additional enforcement actions. These actions are in addition to more than a dozen enforcement actions previously undertaken by NASAA members regarding these types of products.
“New Jersey is proud to announce enforcement actions under Operation Cryptosweep to help raise public awareness of the risks associated with initial coin offerings and cryptocurrency-related investment products,” said Kevin Jespersen, Acting Director of the Division of Consumer Affairs. “The Cease and Desist Orders we issued today successfully shut down three online entities seeking to prey on New Jersey investors.”
The Bureau found that Bullcoin is offering investors an unregistered security in the form of an ICO of its Bullcoin Gold cryptocurrency (the “BCG token”) through its website and through various social media websites. The Bullcoin securities were not registered with the Bureau to be sold in New Jersey. Bullcoin further violated the law by failing to disclose key material facts to prospective investors, including its assets and liabilities, or financial information about the business; the risks associated with the BCG tokens; and the cryptocurrencies that the Bullcoin fund would invest. The Bureau also found that Bullcoin made untrue statements of material facts on its website, including that it is “the leading crypto-hedge fund,” an assertion that is either untrue or unsupported.
The Bureau found that Trident is offering investors an unregistered security in the form of an ICO of its Trident coins (“TDC Coin”) through its website and through various social media websites. The TDC Coins were not registered with the Bureau to be sold in New Jersey. Trident further violated the law by failing to disclose key material facts to prospective investors, including the identity of its principals; its physical address and principal place of business; its assets and liabilities, or financial information about the business; the persons or entities that developed the TDC coins; and the persons or entities that are buying and selling the cryptocurrency in the Trident Crypto Index Fund. The Bureau also found that Trident made untrue statements of material facts, including a statement on its website that in 2017 the Trident Crypto Index Fund had a return of more than 1400 percent but there is no evidence provided of these returns; and a statement on its WhitePaper that since the beginning of 2016 TDC coin has “gained by a factor of 154” but the Trident Website indicates that Trident was not founded until 2017.
The Bureau found that Springcryptoinvest is offering investors an unregistered security in the form of various investment packages through its website and through various social media websites. In order to invest with Springcryptoinvest, investors must open an online account through its website. After opening an account, investors are urged to fund the account by purchasing a plan using the cryptocurrencies Bitcoin, Litcoin, or payment websites PerfectMoney or Payeer. The Springcryptoinvest investment packages were not registered with the Bureau to be sold in New Jersey. Springcryptoinvest further violated the law by failing to disclose key material facts to prospective investors, including the identity of its principals; Springcryptoinvest’s assets and liabilities, and other financial information; and how investor funds are invested. The Bureau also found that Springcryptoinvest made untrue statements of material facts on its website by claiming it was incorporated in the United Kingdom in November 2002 with 04588340 as its registration number. However, United Kingdom registration number 04588340 is not assigned to Springcryptoinvest, and there is no United Kingdom registration number for the name Springcryptoinvest.
“Not every initial coin offering or cryptocurrency-related investment is fraudulent, but the risk of fraud is significant,” said Christopher W. Gerold, Chief of the New Jersey Bureau of Securities and Chair of NASAA’s Enforcement Section. “Since cryptocurrencies began attracting headlines last year, we have been warning investors to approach crypto-related investments with extreme caution and stay away from any investment that requires them to transmit funds to an unidentified online entity that fails to disclose who is behind its investment products, the financial status of its business, and the physical location of its operations.”
In April 2018, NASAA organized a task force of its member state and provincial securities regulators to begin a coordinated series of investigations into ICOs and cryptocurrency-related investment products. Regulators identified many cryptocurrency-related products and as part of its work, the task force identified hundreds of ICOs in the final stages of preparation before being launched to the public. These pending ICOs were advertised and listed on ICO aggregation sites to attract investor interest. Many have been examined and some were determined to warrant further investigation. A number of these investigations are ongoing and others resulted in enforcement actions announced today.
NASAA’s task force also found approximately 30,000 crypto-related domain name registrations, the vast majority of which appeared in 2017 and 2018.
Ridgewood NJ, With cryptocurrencies continuing to attract headlines, Attorney General Christopher S. Porrino and the Bureau of Securities, which is within the Division of Consumer Affairs, today reminded New Jersey investors to be cautious about investments involving cryptocurrencies.
“Cryptocurrencies may be the new rage when it comes to investments, but there are significant risks associated with transactions involving these predominantly unregulated currencies,” said Attorney General Porrino. “Investors should fully understand the types of currency and transactions being pitched to them before agreeing to invest.”
Cryptocurrencies are a medium of exchange that are created and stored electronically in the blockchain, a distributed public database that keeps a permanent record of digital transactions. Current common cryptocurrencies include Bitcoin, Ethereum and Litecoin. Unlike traditional currency, these alternatives have no physical form and typically are not backed by tangible assets. They are not insured or controlled by a central bank or other governmental authority, cannot always be exchanged for other commodities, and are subject to little or no regulation.
A survey of state and provincial securities regulators by the North American Securities Administrators Association (NASAA), of which the Bureau of Securities is a member, shows 94 percent believe there is a “high risk of fraud” involving cryptocurrencies. Regulators also were unanimous in their view that more regulation is needed for cryptocurrency to provide greater investor protection.
“Because of the high risk of fraud and some projections of huge returns, investors must be on alert and not be tempted to invest in cryptocurrency-related investments without first vigorously vetting any transaction,” said Sharon M. Joyce, Acting Director of the Division of Consumer Affairs. “Understanding what is being sold is the best armor an investor has against fraud.”
Last month, NASAA identified Initial Coin Offerings (ICOs) and cryptocurrency-related investment products as emerging investor threats for 2018. Unlike an Initial Public Offering (IPO) when a company sells stocks in order to raise capital, an ICO sells “tokens” in order to fund a project, usually related to the blockchain. The token likely has no value at the time of purchase. Some tokens constitute, or may be exchangeable for, a new cryptocurrency to be launched by the project, while others entitle investors to a discount, or early rights to a product or service proposed to be offered by the project.
“Transactions involving cryptocurrency are often complicated and confusing with an unproven track record. They are not designed for investors with a low tolerance for risk or volatility,” said Christopher W. Gerold, Chief of the Bureau of Securities. “The best advice we can give is for investors to be completely aware of the risks before investing and act accordingly.”
NASAA offers a short animated video to help investors understand the risks associated with ICOs and cryptocurrencies. NASAA and its members first alerted investors of the risks associated with cryptocurrencies in 2014.
Common Cryptocurrency Concerns
The following are some common concerns investors should consider before investing in any offering containing cryptocurrency:
Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear.
Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.
The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.
Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.
Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.
Common Red Flags of Fraud
The Bureau of Securities also reminds investors to keep watch for these common red flags of investment fraud:
“Guaranteed” high investment returns. There is no such thing as guaranteed investment returns, and there is no guarantee that the cryptocurrency will increase in value. Be wary of anyone who promises a high rate of return with little or no risk.
Unsolicited offers. An unsolicited sales pitch may be part of a fraudulent investment scheme. Cryptocurrency investment opportunities are promoted aggressively through social media. Be very wary of an unsolicited communication—meaning you didn’t ask for it and don’t know the sender—about an investment opportunity.
Sounds too good to be true. If the project sounds too good to be true, it probably is. Watch out for exaggerated claims about the project’s future success.
Pressure to buy immediately. Take time to research an investment opportunity before handing over your money. Watch out for pressure to act fast or “get in on the ground floor” of a new tech trend.
Unlicensed sellers. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. The Bureau of Securities can help investors research the background of those selling or advising the purchase of an investment.
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