US FTC Sues Startup for Allegedly Misusing Raised Funds on Bitcoins and Credit Card Bills
The Federal Trade Commission (FTC) is suing a startup for spending its raised funds on bitcoins () and credit card bills, rather than the stated products, the court filing on May 6.
The FTC brought a lawsuit before the U.S. District Court for the Southern District of Texas alleging that the startup dubbed iBackPack and its officer and authorized signatory Douglas Monahan misused a “large share” of $800,000 raised during four crowdfunding campaigns from consumers.
Specifically, the defendants allegedly did not use the funds for development, production and distribution of the stated products such as backpacks, but purchased bitcoins, made automated teller machines () withdrawals and paid off personal credit cards.
The FTC states in the filing that the defendants violated the FTC Act, that prohibits “unfair or deceptive acts or practices in or affecting commerce.” The court may therefore award ancillary relief, including rescission or reformation of contracts, restitution, refunds, and the disgorgement of ill-gotten funds.
Last month, the Manhattan district attorney Cyrus R. Vance, Jr. a group of individuals who allegedly operated stores on the dark web that sold and shipped “hundreds of thousands” of tablets of counterfeit and laundered millions of dollars with . The individuals reportedly withdrew more than $1 million using ATMs.
Also in April, Cointelegraph that LocalBitcoins trader Jacob Burrell Campos, who sold to more than 1,000 people in the U.S., will serve two years in federal jail. Burrell, a citizen, amassed more than $820,000 from sales on the P2P platform between 2015 and 2018.
As altcoins continue to gain popularity throughout the world, bitcoin exchanges in China are also getting in on the action and listing alternative cryptocurrencies.
Huobi to Support Altcoins
As the moratorium on is expected to soon end in China, exchanges in the country seem to be turning their attention to alternative cryptocurrencies. Two days ago, one of the big three exchanges in China, Huobi, announced it will launch Ethereum trading on May 31.
The reads:
We are excited to announce the CNY/ETH will be listed on our exchanges. Trading will start at 12:00 May 31st (GMT +8). ETH deposit and withdrawal is available from now on.
Today, Huobi a list of altcoins that are to be added in the future according to the rank of the coin in said list. According to Huboi’s underlying model, Ethereum, Litecoin and Ripple are the highest ranking coins following bitcoin, followed by Dash, Zcash and Dogecoin.
Online news service cnLedger tweeted:
Huobi released its coin ranking list and underlying model. They'll list new coins according to the ranking in future
The list was ranked using a model created by Huobi which factors in the coin’s strategy, marketing, activity, risk and technology to calculate the relevance of the coin.
The list and underlying model can be seen in Huobi’s .
BTCC to Get In On the Action as Well
Huobi isn’t the only bitcoin exchange in China that is to list alternative cryptocurrencies.
After a two-week poll, in which over 190k votes by the cryptocurrency community were counted, will be listed in the BTCC exchange. Bobby Lee, CEO of BTCC tweeted:
After 2+ wks, 3 rounds, 190K+ votes, we now have a WINNER in the Battle of Digital Currencies: will list !
Although the exchanges employed a completely different method in which Huobi used a model to rank cryptocurrencies and BTCC used a community poll, both exchanges are interested in opening the doors for the Chinese community to invest in .
Huobi and BTCC, however, are not the first exchanges in the country to list alternative cryptocurrencies. The China-based Yunbi exchange allows users to buy and sell cryptocurrencies like Etherem, Ethereum Classic, Zcash, QTUM, Bitshares, and others. BTC38 also offers a multitude of cryptocurrencies to be bought and sold for CNY. Lastly, CHBTC also lists Ethereum, Ethereum Classic, and Litecoin.
Crypto in Asia
Although less-known exchanges in the country offer altcoin trading, most Chinese users are only familiar with bitcoin and Litecoin, given that most cryptocurrency investors use one of the big three exchanges in the country, .
China plays a big part in the bitcoin world, ranking in the top 3 countries by daily trading volume but other countries in the continent are becoming increasingly interested in cryptocurrencies and it’s not just bitcoin and Litecoin.
Take Japan, for example, where the recent has created an accentuated demand for cryptocurrencies, making the JPY the in the world by trading volume and that’s not all. Other cryptocurrencies are also gaining traction in the country.
Co-Founder of and Community Director at the Counterparty Foundation, stated in a recent :
First, one of the unique characteristics of the Japanese crypto space is that altcoins are very popular as a means of investment and some of them have very strong and dedicated communities; some even more active than the bitcoin community itself in a way. Among them, two of the most popular altcoins in Japan are XRP(Ripple) and XEM(NEM).
In , Ethereum and Ethereum Classic are also extremely popular, even more so than bitcoin whose daily trading volume is smaller than that of ETH or ETC.
With China adhering to the altcoin craze, could Asia become the capital for alternative cryptocurrencies?
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