$250 Million Ethereum Mining Scam? Korean Prosecutors File Charges

Korean prosecutors have reportedly filed charges against several individuals associated with Mining Max, US-based cryptocurrency mining firm allegedly behind a major cryptocurrency mining scam.

According to a report by Korean publication Yonhap, authorities at the Incheon District Prosecutors’ Office have indicted 21 individuals suspected of being associated with Mining Max LLC, a US-based firm, on charges of fraud and allegedly soliciting 270 billion won (approx. $250 million) from investors across the world for an Ethereum mining operation promising large returns. Three others have been indicted without detention for embezzlement and other charges.

Mining Max presents itself as the developer of “premium cryptocurrency mining” machines headquartered in California. “All of the mining rigs are assembled and maintained in our Internet Data Centers (IDC) in Korea,” the company claims on its website.

The allegedly sweeping scam also entails seven other Korean and foreign nationals, now on Interpol’s wanted list, of being associated with Mining Max and blotching results that purported to mine more Ethereum than the operation actually did.  The scam unraveled when the company was not longer able to make sufficient returns from its ‘mining’ operation, presumably in its dividends to new investors.

Altogether, prosecutors allege that the suspects pocketed a significant portion of the $250 million, amassed from roughly 18,000 investors in 54 countries between September last year and October this year.

Authorities further claimed that Mining Max only spent 75 billion won, approximately $70 million of the $250 million, for its mining operation. The company’s executives are also suspected of having tucked away 100 billion won, approx. $92 million, in offshore accounts. Further, ‘top performing’ investors were allegedly paid up to 4 billion won (approx. $3,7 million) alongside luxury perks in Rolex watches and Mercedes Benz automobiles, Yonhap’s report added.

Prosecutors estimate the scam sees approximately 14,000 investors in Korea, 2,600 in the United States, 600 in China and 700 from other countries, including Japan.

Source: cnn

New Bitcoin Fork Adopts Interest Payments

Bitcoin has inspired several spinoff currencies, or “forks,” that also offer financial services through blockchain payment networks. Some of these forks were wildly successful. Bitcoin Cash, arguably the most successful Bitcoin fork of all time, now has a market value of around $20 billion.

Bitcoin Cash and similar success stories have inspired several others to follow suit. Tech entrepreneurs who believe they can create a coin with better mining, transaction verification, or security than Bitcoin are all taking their shot at the big time. However, with forks becoming increasingly common on the Bitcoin blockchain, investors may struggle to compare the value of one new coin with another.

Bitcoin Interest is one of the latest forks on the Bitcoin blockchain to be announced for release in January of 2018.  This fork updated consensus rules to allow users to earn interest on Bitcoin Interest Coins they hold.

Bitcoin Interest and Other Bitcoin Forks

Not all forks that followed Bitcoin Cash have been able to mimic its success. For example, Bitcoin Gold launched in late October 2017 to major criticism and controversy.  Because the Bitcoin Gold offering included a premine period without reason, many in the cryptocurrency community accused it of being a money grab. Bitcoin Gold has never been able to remove the shadow of controversy that follows it, and several users have alleged hacking, fraud, and hidden fees associated with the coin.

Unlike the more controversial Bitcoin forks, Bitcoin Interest is providing a clear value to the virtual currency market place.  Specifically, Bitcoin Interest is offering interest payments to users who hold the currency for specific periods of time.

Interest-Bearing Accounts

For the most part, banks make money by charging interest on loans.  However, first they need people to deposit money into the bank so that it has a way to fund loans. To entice people into depositing funds into their bank accounts, banks usually pay interest based on the amount the customer has on deposit.

Interest rates for savings accounts are usually pretty low. The highest yielding savings accounts typically only offer around 1% interest on money deposited at the bank.  Sometimes, customers must maintain a minimum amount on deposit to even qualify for interest payments. However, money deposited in savings accounts is basically risk-free, so even a small return on your funds benefits you in the long run.

Bitcoin Interest: A New Application of an Existing Financial Technology

Interest-bearing bank accounts is not a new idea.  However, this everyday benefit enjoyed by most traditional bank customers has not been available to virtual currency users. Now, cryptocurrency holders can earn interest on their coins by using Bitcoin Interest.

Bitcoin Interest offers the interest-bearing benefits of traditional bank accounts with the ease and efficiency of cryptocurrencies. Bitcoin Interest coin holders can receive monthly or weekly interest payments in the form of Bitcoin Interest Coins (“BCI”) by “parking” their coins for an agreed upon time.  

Unlike traditional savings accounts, which pay low, fixed interest over time, users utilizing the Bitcoin Interest technology can access high, and dyanmic interest rates that give them true value for parking their wealth.

Bitcoin Interest Creates Real Value for Virtual Currency Users

Bitcoin Interest stands out among the growing blockchain technology industry because it is taking an old idea – the interest-bearing bank account – and applying it in a new way. Mainstream adoption has been a major obstacle to most blockchain companies. However, Bitcoin Interest offers a service that people are already familiar with.  

Offering an interest-bearing virtual currency is an innovative way to introduce a familiar financial service to a brand new market. This novel application of blockchain technology may be one of the most valuable forks on the Bitcoin blockchain we’ve seen yet.  Remember to have your Bitcoins in a wallet or exchange that will support the 1:1 swap of Bitcoin Interest (“BCI”) coins before January, you don’t want to miss out on this fork!

Source: cnn