In the Murky World of Bitcoin, Fraud Is Quicker Than the Law
dealbook.nytimes.com
dealbook.nytimes.com
With Bitcoin you give them a brand new address that is tied to nothing.
The US is behind the rest of the world on this one.
Facebook makes this even worse in that is exposes a lots of the commonly requested bits of entropy. It's not hard to identify someone's mother on Facebook. From there, you can identify her parents (if still alive) or brothers and cousins, to get her maiden name. Now if your birthday is visible or published anywhere, an attacker has yet another bit of entropy. Add enough together and an attacker now has enough information to walk into a bank agency with your bank account number and possibly gain access to your account.
TBH, we're at the point where it shouldn't be legal to secure accounts with any method that involves multiple bits of entropy. Any system that permits someone close to you (friends or family) to pretend to be you simply isn't secure. These days you don't even need to bother with power of attorney because it is so stupidly easy to impersonate one's parents, significant other, sibling, children, etc.
This is by design. You can identify "relationships" in Facebook, and they will display who your mother, brother, sister, even cousins are.
This is of course ridiculous. Something doesn't have to be regulated in order for it to be considered theft if you take it.
The law needs to comprehend what was stolen, and assess the damages. Or treat this as a computer-hacking (unauthorized access) case.
Even so, maybe, maybe just not a very serious one, assuming we don't write it off as "part of the game".
I picked WoW instead of a game like EVE Online because scamming is not an expected part of the game.
I'm not aware of any criminal proceedings against people who stole WoW gold, but it is an entirely different matter if actual money (i.e. USD) was taken.
The reason is simple; it will keep away the speculators who understand neither bitcoin nor the principles of speculation.
Speculation is mostly about stellar risk management and knowing when and how to take profits. People who change their opinions by day to day (or hour to hour) fluctuations and are swayed by headlines will never learn these principles.
I am getting tired of seeing people liquidate all their investments and invest them into the X new big thing. A new generation of fools come around every 3-5 years. Their opinions change faster than their under-garments and their risk management skills are slow to evolve.
The benefit in keeping them away is simple, lesser volatility. BTC is in desperate need of THAT for its sustainability.
I say we need more vocal naysayers to keep these speculators away, at the same time the believers can work on developing the marketplace and make it sustainable.
Source: was defrauded through wire transfer.
how did that happen?
Personally, I associate wire transfers with fraud; I won't accept them as payment, same as western union or bitcoin.
Now I know better though. But not by listening to the NYT's assurances about how much more diligently the banking system prevents outright fraud.
[1]http://sunburn.stanford.edu/~knuth/news08.html
"I cannot in good conscience continue to traumatize the people at my bank, who obviously have plenty of other things to worry about."
But Bitcoin. Yes, that's a "murky" world. Lets FUD and regulate that.
You could have easily ranted about the murky world of campaign finance, or the murky world of banking. Neither would be less relevant than beating on the NSA horse one more time.
I actually find this Twitter orchestrated "pump and dump" a rather amusing concept. I don't think it comes with any guarantees of success, though.
In general no. It's only illegal (in the US) when done to manipulate certain categories of assets that fall under the regulation of the SEC.
The pumpers build a position in a selected altcoin. They do this slowly, over a period of time, hoping that no one will notice. Only once they are satisfied with their position do they announce their "pump". They broadcast the idea of "pumping" that coin by a massive coordinated buy. The masses intend to buy in, bidding up the price and then selling off at the higher price.
The problem is that the people coordinating the pump already have their coins. And so as the people they recruited are buying, they're buying coins from the coordinators. When that activity starts to taper off, the coordinators will dump whatever they have left, completely trashing the price, often below the starting point. So the coordinators are the only ones who benefit at all.
There's various tricks they also use to make it more convincing, with bid walls and talk of "noob traps", but at this point it's happened so often that willing dupes are getting hard to find.
Most pumps these days barely move the price at all. Fontas is so infamous that his pump announcements often result in the price immediately going down.
Almost all this activity is on one exchange, BTC-E, which is the only exchange with a variety of alt-coins and the volume for a pump n dump. There have been attempts to get them going on Cryptsy, with its much wider variety of alts, but that site is so awfully coded that it runs too slowly to allow for any sort of coordinated activity.
There have been rumors that there are less public groups running pump and dumps on BTC, which would require substantially more money at this point. There's also clear signs of "dump and pumps" on BTC, where someone will sell a large amount of BTC in hopes of causing a price avalanche, and then they will buy in at the resulting cheaper price.
Given the amount of money to be made, those are almost certainly true rumors.
Having said all that, I think some of the smaller pumpers on Twitter are just looking to drive the price up on certain coins, I don't think they're necessarily looking to take advantage of their followers.
That could be a useful trick. If you know you can consistently reduce prices, and have the capital to acquire the now cheaper commodity. Announce the scheme, prices drop, buy in. Wait for prices to recover and sell off for a profit.