Bitcoin Forum

http://www.bbc.co.uk/news/technology-34984536 (http://www.bbc.co.uk/news/technology-34984536)

We need more charges against the bitcoin related scams. These are the people tarnishing the reputation of bitcoin. Bitcoin has better future without those scamers.

This is good and a lot of people need to read this news so firstly they understand that scammers will not get away by doing scams and secondly people who invest in these so called "Cloud Mining Companies" need to understand that they're nothing but just Ponzi schemes. I just tweeted (https://twitter.com/thebitbaby/status/672973724908306433) about this so more people get to see this, RT it if you like.

Edit: Reply to the quote below:

It's not a bad side of Bitcoin but people, Criminals do what they do best, they scam, steal, rob and they did it before Bitcoin was even invented, Ponzi was invented way before Bitcoin even existed. People need to educate themselves and learn/research how to manage their funds and who/not to trust. More scammers need to be charged and go behind bars to set up examples that they can't get away by thieving people.

That is why bitcoin does not appeal good to new users. They hear much more of the bad side before learning the good side of having bitcoins.

""Generally, fraud in the Bitcoin world is on the increase, according to Richard Howlett, a partner at London law firm Selachii, which advises clients on legal issues relating to crypto-currencies.

"There are several high-profile Bitcoin exchanges I am aware of which appear to be Ponzi schemes," he said....""

Oh no!
Which exchanges would he be talking about this late in the game?

Cryptsy is one of such exchanges. It is insolvency since 2014.

My feeling bitcoin is like stock market in 1920s and 1930s, after the Greta Depression in US, US passes many laws to protect investor, hold investment firm, mutual fund firm and exchange accountable for their acts. In bitcoin world, we may need similar laws, but enforcement will have to be global scale.
I realize this after I lost over 1btc on hash profit, which is Russian company, and no way I can get my money back ...

This is a pretty good issue to explore further: it is all about perception I think. Right now Bitcoin has a pretty bad reputation amongst those people that I know personally who only read/watch what is pushed in front of them on the BBC or similar outlets. No matter what I say in defense these large scams overshadow anything that I can offer.

One thing that really got me angry about these scams was thinking about the way most people first start out with BTC...specifically I looked at my example: it was after one evening in late 2014 reading a few articles about Bitcoin on the internet that I decided I wanted to learn more. I eventually downloaded and activated my first wallet and after learning how to navigate that I wanted to start filling it up with BTC...easy: head to a faucet! Here began my first experience with the captcha and my first few Satoshi's. It was not much and is laughable now in comparison but those first few Satoshis inspired me and started my later experiences with buying miners and really getting involved in BTC.

I was lucky to never getting suckered in to cloud mining sites like the subject of this thread but my first experience was essentially with a faucet...they do not take money from you but they do make a living on your time spent viewing their ads. Believe me those first few Satoshis that were confirmed in my account is what really started me moving forward. I was happy to click those faucets, let the faucet owners earn their money because in the end they were sending me my first part of my BTC adventure.


I do agree that fraud is on the increase and there needs to be some way to regulate it...not just with the cloud mining sites that are running obvious Ponzi schemes on "experienced" bitcoin users but also the more unsuspecting places like faucets. Right now there are a series of faucets operating under the names "satoshiocean" and "satoshinine" ( a total of 10 exist under the same operator) that are complete frauds, users arrive to the site and start "earning" satoshis and keep clicking adsense ads until eventually reaching a payout status that never pays out. These sites have been known to users on bitcointalk for months but the fact that they are still in operation means plenty of new users continue to get scammed...I just wonder how many potential BTC adapters are being lost to these kind of scams; pretty sure if I had arrived originally on satoshiocean.com with my first BTC account in late 2014 and spent my time clicking captchas only to receive nothing in the end my experience and dedication would be very different now.

 

For example, if you open an account with a broker, and broker bankrupted, to some extent, your money is SIPC insured. If this is a 401k account, insurance amount is up to quarter million. If I invest in a cloud mining firm, can I expect some amount is insured and backed up by somebody ...

What a shame that so many people seem to turn to fraud to exploit any new opportunity. We need a way to invest in legitimate small mining groups to help cut down on the risks of centralised mining.

Bitcoins are "mined" when computers solve equations that verify user transactions made with the currency.
But it is claimed that Hashlets did not have enough processing power to carry out the number of verifications required to properly reward investors.

GAW and ZenMiner were owned by Homero Joshua Garza, who has been charged in a Securities and Exchange Commission (SEC) complaint filed in a federal court in Connecticut.

This could be a very useful information.