Executes Biggest Bitcoin Scam Scheme, CEO Of African Company Fined USD 3.4 Billion

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Executes Biggest Bitcoin Scam Scheme, CEO Of African Company Fined USD 3.4 Billion. A federal judge in Texas ordered the head of a South African company to pay USD 3.4 billion or the equivalent of IDR 49.9 trillion (assuming exchange rate of IDR 14,693 per US dollar) as a result of a case that the US commodity regulator said was fraud. the largest involving bitcoin.

Cornelius Johannes Steynberg was ordered to pay USD 1.7 billion or the equivalent of Rp. 24.9 trillion in damages to the victims of the fraudulent scheme and another USD 1.7 billion in civil penalties, a record for the US Commodity Futures Trading Commission (CFTC) case.

The CFTC billed Steynberg in July, saying his company Mirror Trading requested bitcoins from thousands of people to operate the commodity pool.

Read lso: SEC Revises Rules, Targets Digital Asset Exchanges And DeFi

“The company claims to be trading off-exchange, retail foreign currencies with participants who are not eligible to trade,” said the CFTC, quoted from Yahoo Finance, Monday (1/5/2023).

The CFTC said that from May 2018 to March 2021, Steynberg received and misappropriated at least 29,421 bitcoins worth more than USD 1.7 billion at the end of the period from approximately 23,000 participants from the US, including more than 1,300 in Texas.

The decision against Steynberg was rendered by Judge Lee Yeakel in the Western District of Texas, according to court filings.

Executes Biggest Bitcoin Scam Scheme, CEO Of African Company Fined USD 3.4 Billion. Previously, electric car maker Tesla(TSLA) did not buy or sell any bitcoins in the first quarter of 2023, the company reported in its earnings release on Wednesday, April 19, 2023.

Reporting from Coindesk, Friday (21/4/2023), the value of digital assets held by Elon Musk’s company at the end of the quarter was USD 184 million or the equivalent of IDR 2.7 trillion (assuming an exchange rate of IDR 14,972 per US dollar), flat from the fourth quarter of 2022.

The valuation remained flat even as bitcoin(BTC) rose to around USD 28,500 or equivalent to Rp. 426.7 million at the end of the first quarter from USD 16,500 or equivalent to Rp. 247 million three months. Before, because current accounting rules do not allow those profits to be reserved.

Tesla also did not change the number of bitcoins it held for the third straight quarter.

For the first quarter, Tesla reported adjusted earnings per share (EPS) of 85 cents, in line with a consensus analyst estimate of 85 cents, according to FactSet. Tesla’s revenue came to USD 23.33 billion or the equivalent of IDR 349.2 trillion less than the expected USD 23.6 billion or IDR 353.2 trillion.

Read Also: UK To Prepare Special Crypto Act In 12 Months

Tesla joined the ranks of leading cryptocurrency holding companies when it revealed it had invested $1.5 billion in Bitcoin in February 2021, pushing the price of BTC to a new record high at the time.

The company sold 10 percent of its Bitcoin holdings in the first quarter of 2021 to prove Bitcoin’s liquidity as an alternative to keeping cash on its balance sheet, with its next significant sale coming in the second quarter of 2022 when Tesla revealed it had sold 75 percent of its Bitcoin holdings.

Previously, New York-based law firm Pomerantz LLP had launched an investigation into mining company BitcoinCore Scientific over claims its leadership had engaged in securities fraud and activities that negatively impacted its share price.

Reporting from Yahoo Finance, Thursday (12/1/2023), Pomerantz said acting on behalf of the company’s investors said several officers and directors of Core Scientific had engaged in securities fraud or other unlawful business practices.

More specifically, the securities firm cited a report last year by investment research firm Culper Research, which said Core had oversold both its mining and hosting businesses.

Executes Biggest Bitcoin Scam Scheme, CEO Of African Company Fined USD 3.4 Billion. Not long ago, Core Scientific has filed for Chapter 11 Bankruptcy. The Austin-based company went public on the Nasdaq through a special purpose acquisition, or SPAC, in January 2022. By late December, when Core filed for Chapter 11 bankruptcy, the company’s stock had plunged more than 98 percent.

The Culper Research report was also cited in a November 2022 class action lawsuit, which alleges Core Scientific failed to disclose a series of adverse financial circumstances in its statements to shareholders.

The report alleges Core waived a 180-day lock-up period for more than 282 million shares, making them “free to dispose” in March 2022, suggesting company insiders had neglected minority shareholders.

Other examples of Core’s alleged fraudulent activities highlighted by Pomerantz include the company being accused by now-bankrupt crypto lender Celsius of adding inappropriate fees and knowingly and repeatedly violating its contractual obligations, which caused the company’s shares to fall.

Previously, US Senator John Boozman revealed that even though it is called a cryptocurrency, Bitcoin is still considered a commodity, not a currency. He emphasized that exchanges where commodities are traded, including bitcoin, must be regulated by the Commodity Futures Trading Commission (CFTC).

“Bitcoin, even though it’s a cryptocurrency, it’s still a commodity. It’s a commodity in the eyes of federal courts and the opinion of the chairman of the Securities and Exchange Commission (SEC). There is no dispute about this,” Boozman said in a hearing, quoted from Bitcoin.com, Tuesday (6/12/2022).

Read Also: Elon Musk Trying To Stop A Dogecoin Investor Lawsuit Worth USD 258 Million

Calling FTX’s collapse a shock, the senator said public reports showed a lack of risk management, conflicts of interest and misuse of customer funds.

Senator Boozman went on to talk about crypto regulation and empowering the Commodity Futures Trading Commission (CFTC) as the primary regulator of the spot crypto market.

“The CFTC has consistently demonstrated its willingness to protect consumers through enforcement action against bad actors,” continued Senator Boozman.

Boozman believes the CFTC is the right agency for an expanded regulatory role in the digital commodity spot market.

Executes Biggest Bitcoin Scam Scheme, CEO Of African Company Fined USD 3.4 Billion. In August 2022, Boozman and several senators introduced the Digital Commodity Consumer Protection Act (DCCPA) to empower the CFTC with exclusive jurisdiction over the digital commodity spot market.

Two other bills have been introduced in Congress this year to make the derivatives regulator the primary watchdog for the crypto sector.

While bitcoin is a commodity, SEC Chairman Gary Gensler has repeatedly said most other crypto tokens are securities.

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