Crypto Crime Weekly: Not All Paper Money Is Real
08.24.2018

Here at BREAKER, we’re enthralled by the promise of blockchain and cryptocurrency. But we love reading about all the scamsters and crooks in the space, too. And because we enjoy sharing, we’ve once again rounded up the week’s most compelling cryptocurrency-related crime stories from around the web.

Crypto Businessman Loses $2.3 Million in Bitcoin-to-Fiat Exchange Gone Wrong
ICOs can often be scams, but not all paper money is real either. A South Korean businessman agreed to exchange 2 million euros in bitcoin for 2 million euros in fiat currency, but instead received “crude, photocopied fakes,” according to the police. Two Serbian men approached the businessman with a potential business deal, and discussions led to the transaction agreement. They met at a hotel in Nice, France to exchange the money, but the businessman didn’t realize the euros were fake until after they had departed. The police found one of the men living it up at a luxurious hotel in Cannes with a watch costing 100,000 euros, and he has been charged with fraud and organized crime, but his accomplice is still on the loose. Surprisingly, this isn’t the first time a bitcoin-to-fiat exchange has gone wrong. Next time, it probably wouldn’t hurt to double check and make sure you’re not receiving Monopoly money. [New Straits Times]

Norwegian Mining Farm Receives Bomb Threat
Last Saturday, Kryptovault, a bitcoin mining company operating out of three cities in Norway, received an anonymous bomb threat regarding its noise pollution. Nearby residents have complained about not being able to open windows in the summer heat and having to abandon bedrooms close to the farms. However, someone took their complaints to the next level, sending the company an enraged letter saying, “This is sabotage. If you are expanding crypto mining and filling the country with noise, then you will be sabotaging the peace. I am threatening to send you some explosives.” Kryptovault immediately reported the threats to the police, but things just keep getting worse for them. Increased scrutiny on the company revealed that they don’t have the proper permits, so local authorities have temporarily shut down operations. The company is applying for the missing permits and investing in noise-reduction equipment, while residents get some peace and quiet for now. [Yahoo Finance, The Local Norway]

Government Backpedals on Accepting Cryptocurrency for Bail
Earlier this month, a judge ordered alleged hacker Martin Marsich to pay his $750,000 bail in any kind of cryptocurrency, but the government has now backtracked and will not accept the virtual payment. Marsich is accused of hacking into video game company Electronic Arts’s internal systems and stealing about $324,000 of in-game items. Federal authorities worked with Marsich’s lawyers to prepare for the transaction and even set up a cryptocurrency wallet, but the FBI ultimately refused the cryptocurrency, citing “liability issues.” Then, the judge suggested that Marsich convert $750,000 of his crypto-assets into fiat currency, but his lawyers pushed back, arguing that Marsich owns some lesser-known cryptocurrencies and selling those would tank the markets. So, after going through all that trouble, the prosecutors and defense lawyers settled on the simplest solution—Marsich will convert $200,000 of cryptocurrency into fiat for his bail. [MarketWatch]