Late last week, the SEC announced that it has settled charges with Bitqyck Inc. and its founders, Bruce Bise and Sam Mendez, alleging that they defrauded investors in the securities offerings of two cryptocurrency tokens, and had operated an unregistered exchange. According to the SEC, the defendants lied to investors and fraudulently raised $13 million through unregistered token sales. Without admitting or denying the allegations, Bitqyck consented to an order requiring it pay back investor money, with interest, and a civil penalty of nearly $8.4 million. Bise agreed to pay disgorgement, interest and penalties of $890 thousand; Mendez agreed to $850 thousand.

David Murray, a vice president at the Financial Integrity Network and former U.S. Treasury Department director, recently provided expert testimony to a U.S. Senate subcommittee about how cryptocurrencies are facilitating human trafficking. Murray advocated for regulating cryptocurrency mining under the Bank Secrecy Act, and requiring miners to ascertain who is on the other end of transactions, and to vet any issuers, exchanges or custodians they serve. In response, critics, including Peter Van Valkenburgh of the think tank Coin Center, have argued that such regulation would act as a ban on miners participating on public blockchain networks, and would ultimately prove ineffective in crime prevention.

Finally, last week a major cybersecurity firm reported that in the first quarter of 2019, "cryptojacking" (secretly installing software to use a person's computing power to mine cryptocurrencies without consent) rose 29% and ransomware attacks increased by 118%. The report identifies new types of malware that can infect major operating systems.

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