A Ponzi scheme that stole $722 million from investors in a fraudulent cryptocurrency mining pool has been broken up by FBI and IRS agents, according a federal indictment. BitClub Network promised investors around the world shares in the earnings of a major non-existent bitcoin mining pool.
Maksim Zaslavskiy was sentenced to 18 months in prison on November 18 for conspiracy to commit securities fraud in the RECoin and Diamond initial coin offerings.
It seems the New York Attorney General is not the only person accusing sister companies Bitfinex and Tether of breaking the law. A paper accusing the companies of market manipulation designed to boost the price of Bitcoin will be published soon.
Tether advocates rejoiced on Tuesday after a story by Bloomberg’s Matt Leising seemed to reassure readers that the stablecoin had enough dollars to back each token. “Bank statements reviewed by Bloomberg News suggest those fears may be unfounded,” Leising wrote. The story’s big contribution to the Tether debate was only that Bloomberg saw four separate months’ worth of Tether’s balances and each exceeded the amount of circulating tokens. Yet Tether’s bank balances should be expected to be positive at month’s end. As written in the often-cited study by John Griffin and Amin Shams of the University of Texas on alleged manipulation of Bitcoin prices using tethers: “the strong negative effect on…