Texas State Securities Board Issued 16 Orders Against Cryptocurrency Firms in 2018

The Texas State Securities Board (SSB) had issued 16 different orders against crypto-related businesses which were suspected of being involved in illicit activities and/or scams.

According to the SSB’s enforcement report (released on February 7th), there were 60 individuals and/or entities that may have targeted residents of the US state of Texas. The report noted that the residents were presented various investment options which were mostly unregistered securities.

As mentioned in the enforcement report: 

Promoters of cryptocurrency-related offerings are taking advantage of the anonymity of the internet to attract victims, weaponizing social media to connect with investors in Texas

State Securities Board Launched 32 Investigations In December 2017

As confirmed in the regulator’s report, the SSB issued 16 separate administrative orders (in 2018) “against promoters of suspect cryptocurrency investments.” The bad actors allegedly “used online advertisements, social media, and other solicitations” to lure Texas residents into investing in questionable digital asset investment schemes, SSB's report stated.

In order to track down individuals and companies that are involved in crypto-related scams, the SSB has been working closely with law enforcement agencies in Texas. In April 2018, the SSB’s enforcement division had published the findings of its four-week long investigation into various cryptocurrency projects that were suspected of violating securities laws.

The report, titled “Widespread Fraud Found in Cryptocurrency Offerings”, noted that Texas’ securities regulator had launched 32 different investigations in December 2017. Authorities in Texas had found many companies offering securities which had not been registered with the state’s financial regulators. Because registration is mandatory under Texas’ state laws, the firms or businesses were operating illegally or “outside the law”, the report stated.

Texas Regulators Go After Mining Company

After conducting the investigations, the SSB concluded in its report (last year in April):

The revolution in digital money is creating an environment ripe with illegal and fraudulent securities offerings … The potential to cash in on what could be a global [movement] in web-based transactions has put investor enthusiasm into overdrive.

In addition to cracking down on fraudulent and illegal crypto-related investment businesses, regulators in Texas issued a cease and desist order to an Australian cloud mining company known as AWS Mining PTY LTD. The mining firm was also charged with attempting to sell unregistered securities.

An official notice sent to AWS Mining had alleged that Josiah Kosek, the chief marketing officer at the firm, and several agents working under him, had violated the Texas State Securities Act. The accused were charged with luring Texas residents into purchasing the company’s unregistered cloud mining contracts.

'Big Spender' Bitcoin Wallet Exploit Is an 'Issue With BTC Itself', Says BCH Supporter

Michael LaVere
  • Crypto security firm ZenGo has identified a double-spend exploit dubbed "BigSpender" which affected popular bitcoin wallets.
  • Exploit allows an attacker to cancel a bitcoin transaction without the receiving user knowing. 

A crypto security firm has identified a double-spend exploit targeting popular bitcoin wallet providers. 

According to a report by ZenGo, the security firm has discovered a double and multiple spend wallet exploit for bitcoin dubbed “BigSpender.” The report claims the exploit allows an attacker to cancel a bitcoin transaction but still have it appear in a victim’s vulnerable wallet. 

The report reads, 

The core issue at the heart of the BigSpender vulnerability is that vulnerable wallets are not prepared for the option that a transaction might be canceled and implicitly assume it will get confirmed eventually.

As CryptoGlobe reported, ZenGo found that a user’s balance would be increased following an unconfirmed incoming transaction, without a subsequent decrease in the event the transaction being double-spent. The firm outlined how an attacker could use the exploit to cancel transactions of sent bitcoin while still receiving goods and services in return. 

The security firm tested nine popular cryptocurrency wallets and found BRD, Ledger Live and Edge to be vulnerable to the exploit. All three companies were notified by ZenGo of the threat and subsequently updated their products. However, the firm noted that “millions” of crypto users may have been exposed to the attack prior to the update. 

Bitcoin Cash supporter Hayden Otto told Cointelegraph the exploit is particularly concerning for bitcoin-accepting merchants. 

He said, 

The technique is facilitated by RBF (replace by fee), a so-called ‘feature’ added at the protocol level by the Bitcoin Core developers.The issue exists if you use BTC. Wallet software can only make some trade off, which results in a worse BTC user experience, in order to try to protect BTC users.

Otto claimed the exploit was derived from “an issue with BTC itself” and had little to do with wallet software. 

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