Crypto Crime Weekly: Summertime Scam Edition
08.17.2018

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 Investor Sues AT&T Over Huge Hack
Prominent cryptocurrency investor Michael Terpin on Wednesday filed a $224 million lawsuit against AT&T, accusing his cell provider of allowing the theft of some $24 million in tokens from his personal account. In his complaint, Terpin says he was the victim of SIM swapping—when a perp tricks a provider into transferring a subscriber’s phone number to a SIM card controlled by someone else, to break into crypto accounts. He charges that what “AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner.” AT&T disputes the allegations. We’ve warned you before, crypto holders: SIM swapping is on the rise, so for God’s sake, protect your assets. [Reuters]

ICO Exit Scams Are Booming
When it comes to initial coin offerings, things just keep getting scammier and scammier. In the first half of this month alone, investors were fleeced of an estimated $68 million in ICO exit scams—in which offerers shut down or vanish without producing a coin—according to a new report from blockchain intelligence firm Diar. Of that, a whopping $60 million was pocketed by China-based Shenzhen Puyin Blockchain Group, from three ICOs purported to be shams: the Puyin Coin, BioLifeChain, and ACChain. That makes it the largest exit scam to date, though at this rate the record may not stand for long. All told, successful exit scams have fleeced investors of $96.8 million in the past year. In June, BlockBroker allegedly made off with $3 million from an ICO to fund a platform designed to—wait for it—“completely eliminate ICO fraud.” [Diar]

SEC Punishes “Flawless” ICO Founder
Meanwhile, the Securities and Exchange Commission has smacked down an alleged ICO scammer here at home. On Tuesday, the agency took action against the founder of the company behind the Tomahawkcoin ICO, which supposedly would have funded oil exploration and drilling in California, charging that the company used “inflated projections of oil production that were contradicted by the company’s own internal analysis.” The SEC barred Laurance from being an officer or director in any registered company or participating in any penny stock offerings. Tomahawkcoin’s promotional material claimed founder David T. Laurance had a “flawless background”—he woke up like this!—but the SEC pointed out he had a prior securities-related criminal conviction and a history of personal bankruptcies. [Finance Magnates]

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