Earlier this year, an internationally used forex exchange platform disappeared with over $1 billion in customer funds, all fiat. Secure Investments, led by vanished CEO Michael Sterling, offered years of supposedly authentic trading data for users to peruse themselves before deciding to enter into the agreement. Secure Investments claimed to be able to make 1% a day, not compounded, on customers’ investments through forex trading, and offered a guarantee baseline return.
In all the years of Secure Investments’ scam, the only official warning sign came from Panamanian authorities that noted that Secure Investments wasn’t actually registered properly and was using some false location information on their website. Panama was also the “home” to a similar Bitcoin-related Ponzi scheme called Bitcoin Trader. Such warnings were either not found or ignored, by Secure Investments’ customers. Secure Investments had an international conglomerate of shell companies that would then accept the money through banks in exotic locations, this hodgepodge trail through the most disconnected portions of the legacy financial system are all the authorities have to work with.
Many politicians have only just heard of this billion-dollar disappearance. Senator Levin (D-MI) explained how the worlds’ governments might work together to track the money:
Law enforcement will have to focus on the bank accounts, wire transfers and financial transactions that — with international cooperation and some luck — might be used to get behind the anonymous shell companies hiding the perpetrators and stolen funds.
In contrast, the Mt. Gox hack/implosion/ bankruptcy likely has a Bitcoin trail to be followed, though the investigation is still underway and the recent words from former Mt. Gox head Mark Karpeles only provide frustrating hints as to what happened to Mt. Gox’s cold storage.
The disappearance happened on May 1st, yet we are just hearing about it now from Bloomberg, who has known about it since well before the disappearance. When the site Secure Investments vanished into thin air, the mainstream media did not care at the time because they were still mentioning the dangers and ground-shaking severity of Mt. Gox’s Bitcoin hack, and all of the other “hacks” and “disappearances” that have plagued the Bitcoin space. The real lesson here is that crime is a constant no matter what financial system you are using. Letting mainstream media tell you which incident was worse (because of the buzzwords involved), or more worth your time, is no way to live your life. Trusted third parties, especially centralized ones, are always at risk.
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