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Fraudulent projects within the cryptocurrency field are occurring rather often, and the latest one comes in the form of Bitgrin (XBG), according to a recent report. It reads that the project creator has minted 5 billion tokens while advertising that the total supply is capped at 21 million.
Bitgrin’s Creator Scammed Investors?
Bitgrin launched as a fork of Grin and advertised itself as a “magically private cryptocurrency.” Interestingly, it has similarities with Bitcoin as both are set to have a maximum total supply of just 21 million coins.
However, according to a Medium post from today, the creator of the project has been manipulating the mining procedures. The report alleges that the year_block_overage has been providing altered data.
It multiplies the BLOCK_REWARD (5) by BITGRIN_BASE (1,000,000,000), which should equal 5 billion nano bitgrins or five full bitgrins.
The author of the post explains that the result of year_block_overage is then multiplied by BITGRIN_BASE again, which brings the total returns to 5,000,000,000,000,000,000 nano XBG or 5 billion XBG.
Per the post, the screenshot above illustrates that “the “adjusted” block reward for block height 524,160 (YEAR_HEIGHT) is actually 5 BILLION bitgrins. Non nano-bitgrins.”
And although the block 524,160 appears as unspent at first sight, the author says that any machine running a full node with the API enabled will show the block as missing, meaning that “it actually has been spent.”
Hence, he concludes that Bitgrin is a scam, and the person behind it is “slowly selling coins to unsuspecting victims who were led to believe only 21 million would ever exist.”
Former Washington Senator Ran A Crypto Scam?
As CryptoPotato recently reported, the US Securities and Exchange Commission (SEC) brought charges against another fraudulent project related to cryptocurrencies. This time, however, one of the perpetrators was an ex-Washington state senator – David Schmidt.
Established in 2018 by Robert Dunlap and Nicole Bowdler, the alleged scam dubbed Meta 1 Coin had numerous false and misleading advertisements. After Schmidt joined the project, the trio claimed to potential and actual investors that Meta 1 Coin was backed by an art collection worth $1 billion or $2 billion of gold holdings.
The Commission said that the defendants never distributed the Meta 1 Coins. Instead, they used the $4.3 million funds raised from over 150 investors to pay personal expenses and funnel proceeds to other parties.
Following the SEC’s allegations, US District Judge Robert Pitman held a hearing which Dunlap and Schmidt omitted. Ultimately, the judge ordered the arrests of both, while allowing Bowdler “a final opportunity” to comply as she had a “lesser role” in the alleged cryptocurrency scam.