Giga Watt, blockchain good or bad, NASAA warning

According to article, Giga Watt, a startup that held an initial coin offering (ICO) to raise money to build a cryptocurrency mining facility, is being sued for allegedly conducting an unregistered securities offering.

The complaint was filed by a group of plaintiffs that contributed more than $20 million in cryptocurrency. In return for their contributions, investors were to be issued either Giga Watt tokens that would grant them exclusive rights to use the company’s facilities rent-free for 50 years, or mining equipment and supplies to be deployed and set up by the on-site project team.

Asserting that construction deadlines have not been met and promises to refund contributions have not been honored, the plaintiffs are seeking the return of their investments.

It is a reminder to all us, ICOs carries high risks, never risk money you can’t afford to lose in full.

“Ten years in, nobody has come up with a use for blockchain”, that the name of the article which was published at According to the article:

Everyone says the blockchain, the technology underpinning cryptocurrencies such as bitcoin, is going to change EVERYTHING. And yet, after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain—besides currency speculation and illegal transactions.

The author claims should not be ignored.

NASAA Reminds Investors to Approach Cryptocurrencies, Initial Coin Offerings and Other Cryptocurrency-Related Investment Products with Caution

Some common concerns investors should consider before investing in any offering containing cryptocurrency include:

  • Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear.

  • Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.

  • The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.

  • Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.

  • Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.

It is a reminder to all us, ICOs and cryptocurrencies investments carries high risks, never risk money you can’t afford to lose in full.


HitBTC’s Customers, SegWit2x and UBI Blockchain Internet, Ltd

According to, HitBTC’s customers facing withdrawal delay. According to the report, a large number of customer complaints have been surfacing recently around the internet claiming withdrawal delays lasting weeks, and also accusing the exchange of stealing their money.

The article suggest that, HitBTC is among the ten largest exchanges worldwide and if any of the accusations are true, it will be a huge blow to the crypto market.

The second story, which also published at, claims the New SegWit2x has Nothing to Do with the Cancelled SegWit2x.

According to the research, the project’s founder, Jaap Terlouw, has virtually no information about his status as a “developer” anywhere else online, save for a LinkedIn profile listing him as the founder of the SegWit2x project and a TourBar profile that says he is looking for “friends”.

Artur Bujnicki, Robert Szabo, and Bartosz Kozłowski, who are listed respectively as the new SegWit2x’s “Senior Software Engineer”, “Core Developer”, and “Business Development.” None of the three indicate anywhere on their LinkedIn profiles that they have any involvement with the new SegWit2x project whatsoever.

Both Bujnicki and Szabo have written on their profiles that they are seeking “new opportunities.” It’s not clear whether either of them know that they are listed on the new SegWit2x website.

According to the article, as the world of cryptocurrency moves further into the mainstream world of financial technology and popular culture, things seem to get weirder and weirder as they become more profitable. Crypto scams are being born left and right, and will continue to be for some time. Keep your ears sharp, your eyes peeled, and be smart.

The third story from, is about UBI Blockchain Internet, Ltd, and the Crypto’s bubble. According to the article the company is a startup with no revenues, but it’s value jumped about 1,000% this year.

According to the article, at least one business expert doubts this is anything other than hype. Charles Lee, a professor of management and accounting at Stanford University, commented: “The profile of this company is scary. Blockchain is right at the apex of saliency right now. But you have this problem because it’s hard to verify anything — the technology, the fact that it’s in China. You certainly don’t want to own this stock.”

Those words, researches, warning and stories are welcome, and should be consider by all market participants. There are bad players in the Crypto’s  ecosystem, only time will tell who they are. Please try to be careful out-there.

Some ponzi stories you should keep in mind

Please bear in mind the following ponzi scheme stories. Those stories are a lesson for all of us:

SEC Charges Operators of $1.2 Billion Ponzi Scheme Targeting Main Street Investors. According to the SEC complaint, Woodbridge advertised its primary business as issuing loans to supposed third-party commercial property owners paying Woodbridge 11-15 percent annual interest for “hard money,” short-term financing. In return, Woodbridge allegedly promised to pay investors 5-10 percent interest annually.

The SEC complaint alleges that Shapiro and Woodbridge used investors’ money to pay other investors, and paid $64.5 million in commissions to sales agents who pitched the investments as “low risk” and “conservative.” Shapiro, is alleged to have diverted at least $21 million for his own benefit. According to the complaint, the scheme collapsed in typical Ponzi fashion in early December.

Investment Adviser Charged with Running Ponzi Scheme. The SEC alleges that Stephen C. Peters, through his investment adviser firm VisionQuest Wealth Management, sold promissory notes issued by another one of his companies, VisionQuest Capital, to clients and other prospective investors while making false statements, including that proceeds would be invested into revenue-producing businesses with neither Peters nor his businesses receiving compensation. Peters allegedly claimed that the VisionQuest Capital notes presented little or no risk of loss and were “guaranteed.”

According to the SEC’s complaint, investor funds were not used as Peters claimed. Peters allegedly spent at least $4.4 million on such personal endeavors. Peters also spent at least $4.9 million to make Ponzi payments to earlier investors.

Prosecutors bust multimillion dollar cryptocurrency scam. According to Korean news source Yonhap, Prosecutors said Wednesday they have uncovered a multimillion-dollar fraud scheme, by a cryptocurrency mining agency based South Korea and in the United States, that has incurred huge losses for investors around the world.


The suspects stand accused of pocketing some 250 million USD from 18,000 investors in 54 countries.

The suspects allegedly lured clients into investing in their cryptocurrency mining tools, which produced ethereum, by promising higher returns.

The suspects deceived investors, by manipulating the mining results, to look as if they were digging more Ethereum, using the computer program it developed. Their scam collapsed as they could not make enough returns from cryptocurrency mining.

Prosecutors believe the company spent around 69 million USD to buy the miners, and the rest was used by the management personally or to reward top performers. They suspect the executives have hidden about 93 million USD of the investment in offshore bank accounts.

Texas State Securities Board has obtained an emergency cease-and-desist order against a company they say is unlawfully pitching bitcoin mining investment products in the state. 

The Securities Board said that the company claimed to offer steady, daily returns – a structure reminiscent of high-yield investment plans that boast steady gains. Further, the solicitations reportedly encourage prospective investors to find others to buy in so that they can make money from “referrals. By promising such investment plans, the respondents are making offers containing statements that are materially misleading or otherwise likely to device the public.

When it comes to unsuccessful cryptocurrencies services the reason is hacking

When it comes to unsuccessful cryptocurrencies services (exchanges, mining and so forth) the common reason is hacking.

In the below you can find 3 examples:

Bitcoin Exchange Youbit to Declare Bankruptcy After Hack.

After Losing $60 Million in Bitcoin, Nicehash Is Back (Nicehash was forced to close after allegedly being hacked, losing almost 4,450 BTC).

The Bitfinex Bitcoin Hack: What We Know (And Don’t Know).

Regarding to bitfinex, it is advisable to read the following article as well (press here). We cannot confirm or endorse the article, we are just letting you know that it is there. In the article there are issues that you should be familiar with. We hope that those concerns are just “fake news”.

We were wounder if hacking is the only reason, maybe there are other “traditional reasons”? for example bad/reckless management, in-house fraud or theft etc. The press releases so far are very surprising, and the reason is always hacking. It just left us to wounder, if the news are true or false (is it fake news? are they hiding something or not? what we don’t know?).

As we wrote before on the CRYPTOCURRENCIES WORLD OUTSTANDING ISSUES post, cryptocurrencies world has huge challenges ahead, and the market has just started to deal with those issues. There are bad players in this new ecosystem, only time will tell who they are.

The above mentioned is a reminder to all of us. The cryptocurrencies world carries risk and opportunities, you must be educated investor in order to enter this market. You should never invest what you cannot afford to lose. Do not take credit or loan in order to invest in this market. If you already took a loan or a credit, please try to revise it ASAP.

Moreover, please note, that some ICOs, cryptocurrencies, mining and blockchain may be risky investments, you should consult with independent financial adviser, before making an investment.

You should only use register financial adviser, if things goes wrong, he/she may have professional liability insurance, and you may be able to get back your money.





Cryptocurrencies, ICO and blockchain, a week in review

Bitcoin CME Futures and reliable source of data:

According to article, CME uses two different criteria to determine whether a bitcoin exchange is eligible as a source for bitcoin pricing data.

First, the bitcoin exchange has to publish a price consistently or it will not be a reliable source of data.

Second, the bitcoin exchange also needs to have trading fees and cannot be a zero trading fee platform. This is important because platforms with no trading fees are susceptible to trading bots that can create fake volume.

What can we learn from CME’s criteria?

Cryptocurrency exchange with no trading fees, should alert you. Remember, if it seems too good to be true, it probably is.

We should also be concern, since fake volume may contribute and support the volatile prices the cryptocurrency market is currently seeing.

SEC and CFTC Chairman Statements on Cryptocurrencies and ICOs:

According to the sec statement, please bear in mind the following:

A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.

If you choose to invest in these products, please ask questions and demand clear answers.

Please also recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators, such as the SEC, may not be able to effectively pursue bad actors or recover funds.

According to the sec statement, by and large, the structures of initial coin offerings that the sec have seen promoted involve the offer and sale of securities and directly implicate the securities registration requirements and other investor protection provisions of the federal securities laws. Generally speaking, these laws provide that investors deserve to know what they are investing in and the relevant risks involved.

According to the CFTC statement, virtual currencies are unlike any commodity that the CFTC has dealt with in the past. In addition, market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. Investors should be aware of the potentially high level of volatility and risk in these markets.

Moreover, CFTC Launched Virtual Currency Resource Web Page, which was designed to educate and inform the public about cryptocurrencies. In addition, in the very near future more guidelines will be published in order to protect the public (i.e. Virtual Currency “Actual Delivery” in Retail Transactions).

Company Halts ICO After SEC Raises Registration Concerns:

According to the press release, a California-based company selling digital tokens to investors to raise capital for its blockchain-based food review service halted its initial coin offering (ICO) after being contacted by the Securities and Exchange Commission, and agreed to an order in which the Commission found that its conduct constituted unregistered securities offers and sales.

FCA (UK) warning

The head of one of Britain’s leading financial regulators has warned people to be ready to “lose all their money” if they invest in Bitcoin.


RBA governor Philip Lowe says bitcoin is a ‘speculative mania’.

Cryptocurrencies world outstanding issues

The mania about cryptocurrencies, ICO, blockchain and so on is getting bigger every day. The average investors are trying to join in, and price levels are touching a new peak.

However, some issues are still pending, and investors need to ask themselves if it’s worth the risk. Please find below few examples gathered form stories published recently:

According to, Bittrex exchange clients, cannot withdrawal their funds. If exchange clients cannot get their money back, there is lack of trust between the tparties.

Another article suggested that Bitfinex exchange suffered from flash crashes and DDoS attacks. Technical problems made trading difficult, and left traders unable to react and manage their positions properly. The article also suggested that, Bitfinex’s business ties and conflict of interest are remain unclear.

Straitstimes reported that Quoine (a cryptocurrency exchange) is being sued n Singapore due to unfulfilled trades, and reported that Bitfinex exchange is being accused of “market manipulation,” “misleading patrons,” and “publicly trading shares of a private company” illicitly.

The bitcoin price is still very volatile (volatile means that you may loss part or all of your invested funds), and once the regulated exchanges in the U.S. will start offer their Bitcoin future contract, the volatility problem may get bigger.

Coinbase issued a statement saying that “we wanted to remind customers that access to Coinbase services may become degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for periods of time“.

The study “The ICO Gold Rush: It’s a Scam, It’s a Bubble, It’s a Super Challenge for Regulators” suggest that, ICOs provide a new and innovative structure for raising funds to support new and innovative ideas and ventures. However, many ICOs are offered on the basis of utterly inadequate disclosure of information, and the decision to invest in them often cannot be the outcome of a rational calculus.

The above issues are a reminder to all of us. The cryptocurrencies world carries risk and opportunities, you must be educated investor in order to enter this market. You should never invest what you cannot afford to lose.


The fear of missing out, make money advertisements and ICO or digital currencies scams

If you Google the word “Bitconnect”, your search results may include paid ads sponsored by “make money” advertisers. “Hexabot”, “Investellect”, “”, “Chain Group” and “Make Money with Bitconnect” are nothing but a scam. In some cases, from the fear of missing out, investors may risk their savings to those schemes, therefore, we want to emphasis that it is a mistake, and those ads are fraud.

We believe that “Bitconnect”, “BitConnect Coin” is nothing but a scam, and Google should consider removing those ads in order to protect Google’s users. Moreover, we believe Google should file a report against those entities to the law enforcement, since they are acting illegally. We believe that Google is a moral organization, and they always act in the best interest of their clients.

The story is not about Google, the story is about us. We must not let the fear of missing out to control us. We must do better.

Just today SEC obtained an emergency asset freeze to halt a fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month. The defendants claimed that investments in PlexCoin would yield a 1,354 percent profit in less than 29 days (please find attached a link for the full press release).

ICOs, cryptocurrencies, mining and blockchain are making investors irrational. You need to be extra cautious, if it is connected to ICOs, cryptocurrencies, mining and blockchain, just because it’s out there doesn’t mean it’s good and profitable investment. Remember, if it is too good to be true, it probably is.

Please note, that some ICOs, cryptocurrencies, mining and blockchain may be risky investments, you should consult with independent financial adviser, before making an investment.

You should only use register financial adviser, if things goes wrong, he/she may have professional liability insurance, and you may be able to get back your money.



ICO fraud case study

Confido, an unregulated ICO startup, raised 375,000 USD, promised “guaranteed returns”, and according to latest article Confido’s tokens are worthless. Moreover,  the Company’s website and social media accounts (including the owner account) were deleted.

The $375,000 “exit” scam highlights the risks that are inherent to the still largely unregulated ICO market.

ESMA highlights ICO risks for investors

An ICO is an innovative way of raising money from the public, using so-called coins or tokens and can also be called an initial token offering or token sale.

The European Securities and Markets Authority (ESMA) is alerting investors to the high risks of so-called ICOs. If you are considering investing in ICOs or have already done so, be aware of the many risks this may entail, including the total loss of your investment. In particular, be aware that you will have no protection in the case where the ICO is unregulated.

According to the statement the main risks of investing in ICOs are:

  • Unregulated space, vulnerable to fraud or illicit activities (several recent ICOs having been identified as frauds)
  • High risk of losing all of the invested capital
  • Lack of exit options and extreme price volatility (Investors may not be able to trade their coins or tokens or to exchange them for traditional currencies)
  • Inadequate information (the information that is made available to investors, is in most cases unaudited, incomplete, unbalanced or even misleading)
  • Flaws in the technology (there may be flaws in the code or programs that are used to create, transfer or store the coins or tokens)

Please find attached a link for the full statement ESMA highlights ICO risks for investors



Posted in ICO