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Six accused in crypto- and NFT-related fraud schemes

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Federal prosecutors said this week that six people have been indicted in four separate cryptocurrency fraud cases involving losses of more than $130 million, including the largest NFT scheme indicted to date.

Prosecutors said the scheme involved a group called the Baller Ape Club that claimed to sell NFTs, or non-fungible tokens, in the form of monkey caricatures.

A group with a similar theme, Bored Ape Yacht Club, is one of the most popular NFT distributors in the world, with endorsements from Snoop Dogg, Tom Brady, and other celebrities. Its NFTs have sold for hundreds of thousands of dollars, although prices have fallen sharply in recent weeks.

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Lu Anh Tuan, 26, of Vietnam has been charged in California with one count of conspiracy to commit internet fraud and conspiracy to commit international money laundering in connection with the Baller Ape Club scheme.

Shortly after Baller Ape Club went public, Tuan and the unnamed conspirators “pulled the rug,” deleted the group’s website and invested $2.6 million, according to the California Central District Attorney’s Office.

Prosecutors said that Tuan and the others laundered the money by transferring it via crypto and cryptocurrency services.

If convicted, Tuan faces up to 40 years in prison.

In a separate case, the founder and former CEO of Titanium Blockchain Infrastructure Services has been charged with one charge of securities fraud in connection with the company’s initial coin offering.

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New cryptocurrency projects use ICOs to raise funds, similar to an initial public offering of shares.

California federal prosecutors said Reseda CEO Michael Alan Stoleri falsified papers sent to potential investors testifying to the project’s purpose and falsely claimed that his company had ties to the US Federal Reserve and companies such as Apple and Disney. and Pfizer.

The ICO has raised about $21 million from investors.

Stoller faces up to 20 years in prison if convicted.

In a third case, a Las Vegas, California man is charged with four counts of electronic fraud and one account each for obstruction of justice, conspiracy to commit fraud and conspiracy to commit commodity fraud.

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Prosecutors said David Saffron, 49, used his crypto investment platform Circle Society to raise about $12 million from investors into a fraudulent crypto fund that allegedly trades in the futures and commodity markets.

Saffron allegedly told investors he used a “trading bot” to generate returns of up to 600%. Prosecutors said he held meetings with investors in homes in Hollywood Hills and traveled with armed security guards “to create the facade of wealth and success.”

“In reality, Mr. Saffron was running an illegal Ponzi scheme to defraud the victim investors and use the money for his personal benefit,” said Ryan L. Corner, the special agent in charge of the IRS’s Los Angeles Criminal Investigation Department.

Saffron faces up to 115 years in prison if convicted.

The fourth case that prosecutors announced this week was indicted in the Southern District of Florida.

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Emerson Pierce and Flavio Goncalves, both of Brazil, and Joshua David Nicholas of Stewart, Florida, are charged with one count each of conspiracy to commit securities fraud and conspiracy to commit wire fraud in connection with a crypto Ponzi scheme that prosecutors said was fraud. About $100 million from investors. Peres and Goncalves, both 33, were also charged with conspiracy to commit international money laundering.

Prosecutors said Pires and Goncalves, founders of crypto investment platform EmpiresX, worked with “key trader” Nicholas, 28, to promote the platform using false guarantees of returns to investors.

“Blockchain analyzes show that Pires and Goncalves then laundered investors’ money through a foreign cryptocurrency exchange and operated a Ponzi scheme by paying former investors with money obtained from EmpiresX investors at a later time,” the US Attorney’s office said.

If convicted, Nicholas faces up to 25 years in prison; The Pires and Goncalves face up to 45 years old.

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Logan Paul has been sued over his CryptoZoo NFT project

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However, that was not enough to stave off legal action. Paul’s associates Daniel Strobel, Jeff Levine, Ibe Ibanez, Jake Greenbaum and Ofir Bentoff are also named as defendants in the suit.

The lead plaintiff in the lawsuit, Don Holland, is a police officer from Round Rock, Texas, whose son told him about CryptoZoo. He purchased $3,000 worth of digital currency from the company, according to the filing.

BuzzFeed News has reached out to Paul’s legal representative, Jeffrey Neiman for comment, but did not immediately receive a response. However, Neiman provided this Statement to Time magazine Before yesterday’s submission: “While Logan is disappointed with the way CrytpoZoo has been handled, when all the facts come out it will be clear that Logan has always acted in good faith. Bad actors hijacked the project at Logan’s expense, as well as others, we are sure Any allegations of fraud will be discredited during this process.”

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How to hold online platforms accountable when amplifying harmful content

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a Supreme Court case Selected for oral arguments On February 21st maybe web conversion as we know it.

The case was brought by the family of a woman who was killed in an Islamic State terrorist attack in Paris in 2015. The plaintiffs claimed that YouTube – owned by Google – was intentionally allowed Hundreds of extreme videos To be published, it was also alleged that YouTube recommended ISIS videos to users. Google argued that it was exempt in this case by Section 230 — the powerful 1996 legislation that shields web and social media companies from legal liability for content posted by users.

Google’s position has been upheld by a federal district court and U.S. Ninth Circuit Court of Appeals. The Supreme Court hearing the case indicates the justices’ interest in influencing the landmark law, which remains vital legislation to protect small and medium-sized businesses without large pockets or armies of lawyers to fend off countless lawsuits. It gives companies ample latitude to adjust their positions at their discretion without any liability, and most importantly, it enables startups to challenge established companies in the free market.

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The 230th had drawn fire from both sides of the lane. President Biden He reiterated his call for law reform earlier this year. Democratic politicians, including Bidenyou generally want to fix or repeal Section 230 to force social media companies into more moderation. Republican politicians Including the former President Trump And senator. Mitch McConnell They called for its repeal to force social media companies to reduce moderation. The Supreme Court also hears hearing cases Defying laws in Texas and Florida that limit platforms’ ability to remove content or prevent them from banning politicians.

When Section 230 was enacted, the web was an entirely different place. Social media was in the womb. Today’s platforms have not yet massively spied, tracked, targeted and manipulated the online activity of their users. Today this business model is the golden goose for mainstream social media giants. Here’s the catch: Behemoths including Facebook, Instagram, Twitter, TikTok, and YouTube have abused Section 230 privileges. They hide behind this legislation’s shield of liability while targeting their users with content they didn’t request or search for.

Instead of getting rid of Section 230, we should reform it to allow free speech and support modestly funded startups while holding all companies accountable. Their liability shields should protect content that the web company plays no role in promoting or amplifying and moderation decisions that are specifically in line with the company’s terms of service.

But liability protections should be removed in four cases: content caused by the company’s algorithms to “trend” in front of users who otherwise wouldn’t have seen it; Content promoted via the Site’s paid ad targeting system; removed content that does not violate any of the site’s posting rules – for example, rules prohibiting targeted harassment, bullying, incitement to violence, spam, or polling – that were in effect on the day it was posted; and content that has been recommended or included in the user’s feed, algorithmically or manually by the site, and to which the user has not explicitly subscribed.

Sites can then choose: do they want to engage in the targeting and newsfeed manipulation of their users and thus be held responsible? Or do they simply want to provide a platform where users follow content from the friends, groups, and influencers they choose to connect with and watch? Algorithmic recommendations should become more transparent in this scenario. Sites will have to clearly identify what content has been boosted via their algorithms and obtain explicit permission from users to serve that content to them, giving users more control and transparency.

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In addition, in line with Florida’s justification for its law could reach the Supreme CourtSection 230 should be amended to require locations.”be transparent about content moderation practices and giving users proper notice of changes to those policies.” Freedom of expression must be protected from the politically motivated whims of the site’s management team or staff.

It is also important to specify what the augmented content companies will not be liable for. For example, what happens if a social media company recommends a post about big waves and a kid sees the post, goes out surfing and drowns? Can his family sue the social network? The solution here is to make clear in updated 230 legislation that companies are liable for certain types of content they promote, such as defamation and incitement to violence, not just any content that precedes a shocking outcome.

Any broader changes to Section 230 would result in a complete loss of user privacy online. If web companies are responsible for any and all content on their platforms, they would have to scrutinize everything users post – Big Brother on steroids. Startups will struggle to afford oversight or legal fees.

If Section 230 were repealed, to avoid liability, web companies would either remotely censor any controversial content or take a hands-off approach and avoid moderation altogether. The first would be Orwellian nightmares devoid of free speech, while the second would mean puddles of unpalatable content. This is a lose-lose scenario.

The Supreme Court should uphold Section 230 to continue protecting freedom of expression and encouraging competition. Hence the task of Congress is to make subtle reforms. Hold companies accountable for clearly defined content that they actively participate in targeting, promoting, or censoring. At the same time, set rules to ensure that user privacy is protected and to avoid frivolous lawsuits. This is the best way forward – compromise.

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Mark Weinstein He is the founder of the social network MeWe and is the author of a book on social media therapy, mental health, privacy, civil discourse, and democracy.

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Twitter is killing the fun bot

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One of the most popular Twitter bots is @employee, which has more than 565,000 followers. You can reply to any tweet and tag @MakeItAQuote, and the bot will respond with the text of the tweet superimposed on an image, resulting in some hilarious results. But now, the fun may be over, as Twitter is making a change that could effectively kill all free bots.

Twitter only announce that starting next week, it will “no longer support free access” to its API, the dataset that bots like @MakeItAQuote need to use to reply, search for text, and produce automated tweets.

While this sounds like a good step toward cracking down on annoying or spam bots (and making Twitter some much needed money), it has a very unfortunate side effect: it will stop some of the “good” bots that have long been a part of it. From the fabric of Twitter.

Daniel, the 23-year-old student in Germany behind MakeItAQuote, told BuzzFeed News he never would have started it if there were a fee attached. “It’s a step in the wrong direction, as most API usage brings a lot of value to the platform,” he said. “And the fact that even I, running one of the biggest bots on the platform, would have to consider shutting it down is very concerning. There are so many great bots that are lesser known. I don’t think any of them can be sustainable.”

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