This Forbes journalist nails it! Long read but worth it.
Submitted July 22, 2016 at 05:26AM by bitcoin-o-rama
via reddit http://bit.ly/29ZwSoF
A Texas man was sentenced to one-and-a-half years in prison on Thursday for operating a bitcoin-related Ponzi scheme that prosecutors say resulted in the first U.S. criminal securities fraud case related to the digital currency.
Published: July 22, 2016 at 01:00AM
Hard Fork Proposal: My marriage contract was written to the blockchain.. Shes a total bitch and I want out.
Submitted July 22, 2016 at 12:29AM by CP70
via reddit http://bit.ly/29Y3Wdv
Warning, if you bought an unencrypted Crypto Coin Wallet card in 2013-2014, your coins are probably gone
So, I have really been proud of myself that over the lifetime of my involvement with cryptocurrencies I have never been ripped off. Sadly, I can no longer make that claim.
To begin with, this is mostly my own fault and, fortunately, it didn't involve a lot of money, but I thought I would write this up in case anyone else also got fooled by this apparent scam and/or hack.
So, back in November of 2013 I bought about five Crypto Coin Wallet Cards to give out as 'stocking stuffer' gifts that Christmas.
The company I bought them from still appears to be in business and operating, so it's fair to make this information publicly available. I did try to contact them before posting this, but the contact page on their website is broken.
At the time that I did this, BIP38 password protected wallets were not yet a real thing. This is back when people were creating paper-wallets with the unencrypted private key obscured by a seal on the back.
The problem with this approach, is that it means that the company which created the card knows the full private key, since they generated and printed out.
I suppose I knew this was a risk at the time, but since I was putting a relatively small amount of bitcoin on these gift cards, I didn't think it was anything to seriously worry about; that was clearly a mistake.
So, last weekend, my nephew was over at my house I and I asked him if he still had the gift cards. He pulled them out of his wallet, where he had been holding them for the past three years. The cards were very worn, but the seal was still intact on the back. I suggested that I should sweep the funds and send them to his more secure mobile wallet since the cards were fading.
When I went to do that, I was very surprised to see that the funds were all gone! The seal is still intact, so the only way that these funds could have been stolen is if someone had access to the original private key that Crytpo Coins had generated.
Either that company was running a scam (and I do not actually accuse them of that) or they were retaining backup copies of the private keys they generated (which they never should have done) and they were stolen by either a hacker or an employee.
Frankly, I don't know how it happened, but I do know it was not myself or my nephew who took the funds because, as I said, the seal on the back of both cards is still intact.
If you ever bought a non-BIP38 encrypted card from this company in the past, gave it out as a gift or used it for yourself, I strongly recommend you check the balance to make sure your funds are still there and, if they are, immediately sweep the funds to your own secure wallet.
Here are links to images of the two cards:
The first card is at this public key:
As you can see on November 4, 2013 I deposited 0.01 bitcoins (just testing), and then on November 19, 2013 I made two more deposits of 0.1 and 0.01 bitcoins.
Then, on January 2, 2015 someone stole the funds in this transaction:
Just now, I sent a very tiny amount of bitcoin to this address just to see if anyone out there is still attempting to sweep funds from old Crypto Coin wallet cards.
Here is a link to the second crypto card:
As you can see I deposited 0.01 bitcoin on November 4, 2013 and then 0.1 on November 19, 2013.
About six months later I deposited an additional 0.01 bitcoins on May 20, 2014.
These two gift cards were for my grand nieces.
You will see that on the same date as the other card, on January 2, 2015 the same person in the same transaction stole the funds off of this card.
I also just sent a very tiny amount of bitcoin to this card as well, to see if the hacker is still actively trying to sweep these cards today.
As you can see, it's a large transaction with many inputs; presumably the hacker/thief sweeping funds from many, many, Crypto Coin Wallet cards at once.
So, once again, if you ever bought a Crypto Coin Wallet card that was not BIP38 encrypted, highly likely any bitcoins you stored there have been stolen.
Submitted July 22, 2016 at 03:08AM by jratcliff63367
via reddit http://bit.ly/2ad8HnL