Articles Tagged with Ethereum

Chicago-based Stoltmann Law Offices is representing clients who’ve suffered losses from advisors who sold clients cryptocurrencies that have lost value and investors who have lost funds due to identity theft, fraud, and hacking involving their crypto-currency accounts.  One of the biggest stories in finance, has been the epic crash of cryptocurrencies, which were pitched as profitable alternatives to cash, stocks, and bonds. “Cryptos” were sold as sure-fire hedges against inflation, but as inflation continued to rise, digital currencies kept heading south in a big way.

Worse yet, the overselling of cryptos has been tied to $1 billion losses in outright scams involving more than 46,000 people, according to the Federal Trade Commission (FTC). As with most swindles, investors were enticed with the promise of quick wealth with no risk. The “Crypto Crash” goes beyond the perils of high inflation and supply chain issues, though. Many observers believe the promise of crypto wealth is actually a Ponzi scheme that’s not linked to any underlying legitimate investment and is fueled by a stream of new investors being duped by the illusion of instant wealth.

The decline in some cryptos has been devastating. According to Robert Reich in The Guardian: “TerraUSD, a `stablecoin,” – a system that was supposed to perform a lot like a conventional bank account, but was backed only by a cryptocurrency called Luna – collapsed, losing 97% of its value in just 24 hours, apparently destroying some investors’ life savings.”

Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses from firms that have not protected crypto assets. In this cyber age, some of the biggest thefts don’t involve masked robbers and guns. They happen online as thieves are increasingly stealing digital currencies and Non-Fungible Tokens (NFTs), which are valuable digital images. In the first quarter of this year alone, cyberthieves have robbed some $1.3 billion in hacking events, according to Atlas VPN.

How do thieves pull off these heists? They break into so-called online “digital wallets,” or online exchanges where investors store cyber currencies like Bitcoin. Unlike bank vaults with thick steel doors, these virtual storerooms can be accessed any number of ways through the internet. Third parties act as repositories for the currencies and include:

  • The Ethereum ecosystem was hacked 18 times, resulting in a loss of almost $636 million.

Stoltmann Law Offices is a Chicago-based securities, investment fraud, and class action law firm offering representing to defrauded investors and victims of fraud nationwide on a contingency fee basis.  We have been closely monitoring allegations that IRA Financial Trust account owners had over $36 million in crypto-currency stolen from their IRAs through a hack of their system on or around February 8, 2022. IRA Financial partners with Gemini Trust Co. to offer the opportunity for its self-directed retirement account clients to invest in cryptocurrency. IRA Financial represents on its website that “Our Trust company’s focus on compliance and security is based on three principles: State regulated, Industry-leading technology, and FDIC protection of cash up to $250,000 through Capital One.” The company goes on the admit that it “must meet the capitalization, compliance, anti-money laundering, consumer protection, and cybersecurity requirements set forth by the South Dakota Division of Banking, and protect the interests of our customers first and foremost.” In specifically representing their stringent “Infrastructure Security”, IRA Financial Trust represents that:

  • We leverage the content-security policy (CSP) and HTTP Strict Transport Security (HSTS) features found in modern browsers.
  • We partner with enterprise vendors to mitigate distributed denial-of-service (DDoS) attacks.
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