Bankrupt crypto exchange FTX has acknowledged a recent spate of third-party scams and frauds aimed at swindling its already-embattled customers.
On Feb. 3, FTX issued an alert to its customers regarding recent attempts by fraudsters about scam attempts, including asking them for money, fees, payments or account passwords.
“We are aware of active third-party scams and frauds seeking to take advantage of FTX customers,” the company warned.
FTX added that its debtors and agents will never ask customers to pay fees or provide account passwords in connection with the “return or prospective return of customer assets,” and encouraged potential victims to contact the official FTX debtors email address to confirm the legitimacy of the messages.
The FTX Debtors shared the following customer alert today. Please note that customers needing to contact the FTX debtors directly should so at email@example.com. — FTX (@FTX_Official) February 2, 2023
Scammers riding on the collapse of FTX have been upping their game for the past couple of months.
In late December, the Oregon Division of Financial Regulation warned that scammers were seeking opportunities to “re-victimize those who have already been harmed and are trying to find ways to recover their losses.”
It cited a fake website claiming to be managed by the U.S. Department of State working on getting FTX customer assets returned to them and asking for their account details.
In November, a deep fake video surfaced online featuring FTX founder Sam Bankman-Fried claiming to double customer crypto compensation. It lured victims into visiting a malicious website offering the crypto giveaway in exchange for tokens sent to the fraudsters.
Meanwhile, in a recent development in FTX’s bankruptcy proceedings, the states of California, Texas, and New Jersey have joined calls for for an independent examination of company financial statements.
Another report concerning Bankman-Fried, published by Reuters on Feb. 2, has revealed that the crypto entrepreneur is in talks with federal prosecutors to resolve a dispute over his bail conditions.
Earlier this week, the judge overseeing the case temporarily barred Bankman-Fried from contacting FTX or Alameda employees.
CryptoZoo and Logan Paul have been named as defendants in a newly filed class-action lawsuit, which alleges they stole millions of dollars worth of purchaser's cryptocurrency via a "fraudulent venture."
In a court filing on Feb. 2 in the District Court of the Western District of Texas, plaintiff Don Holland alleged that Paul and executives at CryptoZoo (CZ) “executed a ‘rug pull’” by promising purchasers of the nonfungible tokens (NFTs) exclusive access to crypto assets among other benefits, but ultimately abandoned the project and kept the funds.
"As part of Defendants’ NFT scheme, Defendants marketed CZ NFTs to purchasers by falsely claiming that, in exchange for transferring cryptocurrency to purchase the CZ NFT, purchasers would later receive benefits, including, among other things, rewards, exclusive access to other cryptocurrency assets, and the support of an online ecosystem to use and market CZ NFTs," it wrote.
We have officially filed a class action lawsuit in the Western District of Texas against Logan Paul et al. for the CryptoZoo fiasco. (This is in addition to the numerous cases heading to arbitration on the matter.) — AttorneyTom (@attorney_tom) February 2, 2023
"In reality, soon after completing the sale of all their CZ NFTs, Defendants, together with others [...] transferred millions of dollars’ worth of purchasers’ cryptocurrency to, among other places, wallets controlled by Defendants," it alleged.
The lawsuit was submitted by attorneys from Ellzey & Associates and Attorney Tom and Associates, the latter of which is the law firm run by YouTube personality Attorney Tom.
In a YouTube video on Jan. 16, Attorney Tom told viewers that they are suing Paul over the alleged crypto scam after “weeks of investigation and speaking to a number of Crypto Zoo victims.”
Other defendants named in the suit include Danielle Strobel, Jeff Levin, Eddie Ibanez, Jake Greenbaum (Crypto King) and Ophir Bentov (Ben Roth), according to Attorney Tom.
This lawsuit comes despite Paul unveiling a $1.5 million recovery plan for disgruntled investors in the CryptoZoo project via a video on Twitter on Jan. 13.
He also revealed that he is no longer going to sue CoffeeZilla over his allegations that his project is a scam, stating that suing him is “not going to help Cryptozoo holders,” adding that he wants to focus on “fans and supporters of him.”
Paul outlined his recovery plan will consist of three stages — stating the first stage will be himself and the co-founder of CryptoZoo, Jeff Levin, burning their ZOO token holdings.
He clarified in doing this they will “have no financial upside” in the game, and it will “add value to the holders’ tokens.”
Paul claimed the second stage will involve him personally committing 1,000 Ether to the project so that “disappointed” investors can burn their NFTs to get their initial investment of 0.1 ETH back, the cost to mint the NFT.
Meanwhile the third and final stage he hopes to “deliver the game as outlined in the whitepaper.”
Indonesia’s Ministry of Trade is reportedly aiming to roll out a national crypto exchange by June this year, six months after its previous target of December 2022.
Trade Minister Zulkifli Hasan shared the new target launch date on Feb. 2 at the opening of Crypto Literacy Month in Jakarta, noting that the government is currently reviewing which companies meet their criteria to become part of the exchange, according to local reports.
There are five active crypto exchanges that are currently registered with the country’s regulators, and according to Zulkifli, the ministry’s crypto exchange could encompass all of them.
While these exchanges are currently facilitating all trades within the nation, the ministry’s exchange would act as a clearing house and custodian in the local crypto market.
A clearing house is essentially a mediator between a buyer and seller, ensuring the transaction goes smoothly. At the same time, its role as a custodian would see it manage the movement of assets between the two parties.
The trade minister urged the public to be patient with the national crypto exchange, saying: “Let us not rush because if it is not ready, things will get messy. The government does not want this to massively take a toll on the public because people do not know much [about crypto trading].”
As previously reported by Cointelegraph, Indonesia had planned to set up its crypto exchange by the end of 2022, but it was delayed due to a number of obstacles.
Crypto assets in the country are currently traded alongside commodity contracts and supervised by the Commodity Futures Trading Regulatory Agency — also known as Bappebti — but the regulatory power will shift to the Financial Services Authority following the creation of a national exchange.
The regulatory shift comes in response to new crypto regulations ratified on Dec. 15, which recognize crypto and other digital assets as regulated financial securities.
On Dec. 5, Bank of Indonesia Governor Perry Warjiyo announced that a central bank digital currency it was planning to launch would be the only digital legal tender in the nation.
This Daily Dose was brought to you by Cointelegraph.