Blockchain Firm Fights Bitcoin Fraud With Justice Department Cybercrime Chief
Blockchain technology company Bitfury is serious about stamping out bitcoin scams and now has the muscle to fight it. Bitfury has hired Michael DuBose, the former head of the Computer Crime unit at the U.S. Department of Justice, to roll out its bitcoin blockchain tracking product, Crystal.
DuBose said in a statement:
“Crystal makes it much easier to identify and track criminal activities on the blockchain, thereby providing a vital service to law enforcement agencies, financial institutions, and other groups.”
DuBose, an attorney who graduated from Harvard Law School, added, “I look forward to helping those groups identify bad actors and build a more secure bitcoin blockchain.”
Bitfury, a provider of bitcoin mining hardware, launched Crystal in January 2018, as BTCManager previously reported.
Crystal tracks and scores transactions on the bitcoin blockchain to identify suspicious transactions that could be associated with illegal activities such as illicit drug sales or money-laundering.
The company said:
“Crystal was designed to be used by law enforcement agencies to track suspicious bitcoin transactions to real-world entities and determine relationships between criminal actors.”
Bitfury CEO Valery Vavilov said the cryptocurrency industry needs a user-friendly way to track bitcoin transactions and to determine if a bitcoin address is legit.
“Public blockchains have the potential to fundamentally improve our day-to-day lives and be strong forces for social good.Unfortunately, there are people who exploit public blockchains and take advantage of their pseudonymity to commit crimes.”
Bitfury, which launched in 2011 as a bitcoin mining operation, has since expanded into a full-service blockchain company. The aggressive rollout of its blockchain analytical tool comes amid escalating regulatory scrutiny of the virtual currency industry around the world.
Winklevoss Twins Target Market Manipulators
Bitfury is not the only cryptocurrency group that is enhancing its security measures. The Winklevoss twins, Tyler and Cameron, have teamed up with Nasdaq to crack down on fraudulent bitcoin and ether trading on their cryptocurrency exchange, the Gemini Trust Company.
The move is part of an effort to stem price manipulation amid volcanic criticism of the erratic price fluctuations of bitcoin and other virtual currencies.
The cryptocurrency market’s head-spinning volatility is part of the reason why avowed skeptics like billionaire Warren Buffett have dismissed crypto trading as reckless gambling.
Buffett’s observations semi-echoed the sentiments of Ethereum co-founder Vitalik Buterin, who mocked the crypto nouveau riche for thinking they are smarter than “the masses” for buying crypto before it became trendy.
Buterin underscored that no one could have foreseen the bitcoin bubble and ensuing riches it bestowed on early adopters. “It’s the luck of the draw, where everyone who won the draw seems to feel like they deserved it for being smarter,” he laughed.
Hacks And Scams Under Microscope
As bitcoin’s profile has skyrocketed amid heavy media coverage, hacks and scams within the digital currency space have also climbed, underscoring the need for structured government regulation and/or better industry-wide deterrence mechanisms.
On May 10, 2018, authorities raided the offices of Upbit, South Korea’s largest cryptocurrency exchange, as BTCManager has reported.
While the exact reason for the raid is unknown, there are rumors that Upbit is being investigated for illegally moving crypto from the wallets of its clients without their consent. Upbit is also accused of doctoring its accounting books to cover up mass-wrongdoing.
This latest news had a dampening trickle-down effect on bitcoin prices, which plunged below $8,300 following a two-week rally. But never fear: The price will rise again soon. Why? Because bitcoin is extremely volatile.