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The trial of a Southern California-based financial scam is now set to go to the penalty phase next Tuesday to determine how much the company and the scheme's architect, Steve Chen, should pay the Securities and Exchange Commission.
Last month, a federal judge ruled that Chen's Gemcoin operation was fraudulent. "The violation took place over years and involved elaborate schemes," US District Court Judge R. Gary Klausner wrote in a summary judgment against Chen. "Defendant has shown no sign of recognition of wrongdoing and has offered no assurances against future violations." The SEC argued in court filings on December 21, 2016 that the remaining issues should be determined by the judge and not a jury and that said judge should find "in favor of sizeable penalties."
Amazingly, the amber mines did actually exist, according to a report filed late last year by the court-appointed receiver.
Some background on the Gemcoin scam and ensuing lawsuit.
How could an average person have known this was a scam? And how is this Gemcoin different, i.e. less reliable, than a more established crypto-currency like Bitcoin? Money is only money because people accept it. What makes Gemcoin a scam rather than a failed attempt at competing with Bitcoin?
-- submitted from IRC
(Score: 3, Insightful) by jelizondo on Friday January 06 2017, @12:24AM
Some days ago I was researching something quite similar, because someone said most money in circulation was no longer printed and threw a figure of 90-95% of all money existed only as bits on some computer.
I could not find a real source of U.S. money but found an official U.K. [whatdotheyknow.com] reference that suggests by 2010 about 80% of the currency was simply bits:
So in effect, pounds are not much better than bitcoin or any other currency actually. Money is worth whatever people believe it is.
(Score: 2) by FatPhil on Friday January 06 2017, @01:00AM
Anyone who's lived through hyperinflation knows that indeed fiat currency sometimes isn't even worth the paper it's written on. You know things are bad when notes are worth less than an equivalent square-inchage of toilet paper.
I did once ask Graham Kentfield, while he was in power as Cheif Cashier, quite what the Bank of England would give me if I as a bearer of one of their notes were to demand the value of the note be given to me, and his response was "a replacement note, at best, probably the same note back".
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by jelizondo on Friday January 06 2017, @02:02AM
Very good story. Actually he was honest, he could have pocketed the note and told you quite truthfully that it was worth nothing ;-)
Thinking about this it dawned on me that I never tried to exchange U.S. dollars for gold, back when you supposedly could, may I would have learned something.
(Score: 2) by maxwell demon on Friday January 06 2017, @07:24AM
Given the name of the UK currency, you should get a pound of Sterling silver. [wikipedia.org]
The Tao of math: The numbers you can count are not the real numbers.