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Another Gillette Resident Out Thousands After Bitcoin Scam

in News/Crime

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By Ellen Fike, Cowboy State Daily

Another Gillette resident has reportedly lost tens of thousands of dollars to a Bitcoin scam, Gillette Police told Cowboy State Daily on Monday.

Gillette Deputy Police Chief Brent Wasson said that an unidentified 62-year-old man reported to Gillette police on Friday that he had been scammed out of around $20,000. The man said a woman convinced him to participate in Bitcoin investments.

“Starting in May, he’d been in contact with a woman claiming to be from Greenhouse Investment Group,” Wasson said. “She offered to help him invest and he’d been investing with her. The exact amount hasn’t been determined, but it’s estimated by around $20,000.”

He could not say how the woman initially contacted the victim.

Greenhouse Investment Group is an Ireland-based investment firm focused on European enterprises.

Laura Baker, executive director of cybersecurity group CyberWyoming, told Cowboy State Daily that unfortunately, Bitcoin scams were becoming all too common in the state.

“Hackers are actually targeting Wyomingites about cryptocurrency scams because we pride ourselves in being a leader in blockchain,” she said. “There was a huge spike in cryptocurrency investment scams last year.”

Wasson said the police have requested bank statements and are investigating the man’s claims. He said officers will look into the man’s communications with the woman and attempt to track IP addresses and identify the suspect.

Scams in the Gillette area are not uncommon lately.

Just two weeks ago, the Campbell County Sheriff’s Office told Cowboy State Daily that a local woman had been scammed out of $30,000 through a Bitcoin scam.

The woman was contacted by a man identified as “Stephen Weiner,” who claimed he worked with the Bush Foundation and was offering her a grant, but required a small investment first.

Over a two-month period, the 56-year-old victim made several transactions, converting cash into Bitcoin through an ATM at a local convenience store.

In March, a woman lost $800 in a puppy scam through Facebook when a person posing as someone selling a puppy requested funds for an animal that did not exist. The buyer sent the money, believing the animal to be real.

That same month, a Gillette man reported being scammed out of $15,000 by a woman he had never met face-to-face.

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Campbell County Woman Scammed Out Of $30K Through Bitcoin Con

in News/Crime

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By Ellen Fike, Cowboy State Daily

A Campbell County woman was swindled out of around $30,000, sending the money to her scammer through Bitcoin transfers, the Campbell County undersheriff told Cowboy State Daily on Tuesday.

Undersheriff Quentin Reynolds said a 56-year-old woman on Monday reported to police that she had been scammed out of around $30,000 after a man identified as “Stephen Weiner” contacted her in March, telling her she was being awarded a grant.

“He claimed he was with the Bush Foundation and that the victim had been approved for a grant program, which required a small investment for a much larger payout,” Reynolds said Tuesday.

The two communicated from around late March until Sunday. Reynolds said since the case was still in the early part of investigation, he was unsure of why the woman stopped communicating with Weiner.

During the two months, the victim made several transactions, converting cash into Bitcoin through an ATM at a local convenience store. The transactions are still being compiled, but the total losses are estimated to be around $30,000.

Reynolds said that criminals like to use Bitcoin because it is harder to track. Due to this, he said it could be difficult to recover all of the victim’s money.

“Whether we can do anything about this or help them out in any way, I’m not sure,” he said.

The Bush Foundation awards $40 million per year to various philanthropic organizations. The foundation actually warned in 2020 of scammers using the organization’s name to try to swindle funds from unsuspecting victims.

“There are different scams, but many promise grant money if the user pays a shipping or processing fee, sends money or a gift card, or shares personal information,” the foundation said. “In some cases, scammers create fake accounts to pose as a staff member, even using names and photos of our staff. They may also hack into accounts of a friend or relative to send messages claiming they received grant money from the Bush Foundation.”

This is not the first social media-related scam that has occurred in Campbell County in recent months. In March, a woman lost $800 in a puppy scam through Facebook when a person posing as someone selling a puppy requested funds for an animal that did not exist. The buyer sent the money, believing the animal to be real.

That same month, a Gillette man reported being scammed out of $15,000 by a woman he had never met face-to-face.

Reynolds reiterated that if a message sounds too good to be true, it probably is.

“With this case, they told her she’d been approved for a grant program, but she needed to send money, which is suspicious in and of itself,” he said.

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Wyoming Crypto Expert Says Trump is Dead-Wrong on Bitcoin

in News/Technology

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By Ellen Fike, Cowboy State

The founder of a Wyoming financial company that focuses on digital assets such as Bitcoin had just two words after she heard former President Donald Trump’s claims that Bitcoin is a scam.

“Ok boomer,” Caitlin Long tweeted in response to Trump’s comments on Fox on Monday.

Trump appeared on Fox with Stuart Varney on Monday morning and discussed certain types of investment, but the former president was not on board with Bitcoin.

“Bitcoin, it just seems like a scam,” he said. “I don’t like it because it’s another currency competing against the dollar. I want the dollar to be the currency of the world, that’s what I’ve always said.”

Long, a Wyoming native who has worked to make digital currency more accessible in the state, was none too pleased to hear these comments.

“ugh, ok #boomer. #bitcoin is many things, but a scam is not one of them,” Long wrote on Twitter, retweeting the clip of Trump’s comments.

Bitcoin is a digital currency that eliminates the need for traditional intermediaries, such as a bank or the government, to make a financial transaction. According to financial website NerdWallet, fiat money (such as the U.S. dollars in a bank account) is backed and regulated by the government that issues it.

Bitcoin, however, is powered through technology and software. The currency is backed by code instead of something like gold or silver.

Each bitcoin is stored in a digital wallet on a computer or smartphone as a computer file. It is powered by an open-source called blockchain. Basically, every transaction is a “block” that is chained to the code, which creates a permanent record of each transaction.

Long was deeply involved in legislative efforts that led to Wyoming becoming the first state in the nation to develop rules to regulate the blockchain technology.

Her work led in 2019 to legislative approval of a bill allowing the creation of “Special Purpose Depository Institutions” for the handling of cryptocurrency transactions.

Wyoming’s work has made it the only state in the nation where banks working with both digital and traditional assets can operate.

Wyoming is also soon to be home to the first two digital currency banks in the world, one of which (Avanti) is operated by Long and the other (Kraken) she is a shareholder in.

Long has also teamed up with U.S. Sen. Cynthia Lummis to work on blockchain and Bitcoin-related issues. The senator was disappointed by Trump’s comments about Bitcoin, but looked forward to chatting with him sometime about its virtues.

“Former President Trump has always said he wants to make America great again, and I absolutely agree with that sentiment. Unfortunately, America is at serious risk of falling behind China and other nations in financial innovation. Bitcoin can help ensure the US dollar remains the world reserve currency,” Lummis told Cowboy State Daily on Monday. “The Biden Administration is debasing the dollar. Financial innovation is how we ensure sound money and protect America’s place as the land of financial freedom and economic opportunity for all.”

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Wyoming opens avenues for cryptobanking

in News
Bitcoin bank

By Ike Fredregill, Cowboy State Daily

The Wyoming Division of Banking is working to finalize the first two applications for a new type of bank: Special Purpose Depository Institutions (SPDI) or “speedy banks,” which will specialize in transactions involving cryptocurrency.

Providing financial services for the modern age, SPDIs could facilitate transactions with cryptocurrency, such as Bitcoin, and access to cryptographic keys. 

Chris Land, general counsel for Wyoming’s Banking Division, said the agency is the chartering authority for the new banks, which were made possible by legislation earlier this year.

“Once an application is filed, the chartering process takes six to nine months, which is the same as any other bank,” Land wrote in an email, adding the first applicants filed in October. “During this time, we’ll review their applications closely and determine whether they have a proposal that meets our high standards and doesn’t present significant risks to the state or national financial system.”

Despite Wyoming typically trailing national trends, the state is paving the way for SPDIs, said Caitlin Long, a member of the Wyoming Blockchain Coalition.

“We’ve done this at least twice before — we did it 150 years ago when we gave women the right to vote,” Long said. “And Wyoming invented the Limited Liability Company in 1977, which is the most prominent form of business entity in the United States today.”

Other states are taking note. Colorado Gov. Jared Polis told Gov. Mark Gordon, “You guys are leading the way on blockchain, and I’m coming for you,” Gordon’s senior policy adviser Renny Mackay told the Wyoming Legislature’s Joint Committee on Minerals, Business and Economic Development.

Long said kudos are owed to the policy makers. 

“Other states are behind the curve, because they just haven’t had someone roll up their sleeves and do it,” she explained. “We really needed new economic ideas in Wyoming, and both Gov. Matt Mead and Gov. Gordon got behind this. Legislative leadership recognized this is an opportunity for us to truly lead, and hat’s off to them. They did it.”

Clarifying ownership

SPDI facilities most likely won’t resemble traditional banking institutions, Long said. 

“The average person won’t even know it’s a bank,” she said. “It’s really there to provide custody of access to the cryptographic keys.”

Unlike a typical digital password, private cryptographic keys are a type of password that can’t be changed used to lock or unlock cryptographic functions such as authentication, authorization and encryption. 

Sen. Chris Rothfuss, D-Laramie, said companies attempting to conduct their finances with cryptocurrencies encountered several obstacles in their day-to-day business operations, creating a need for the SPDIs. 

“We put together the legislative framework for SPDI banks based on concerns of federal regulations and statutes that were challenging for innovative companies to overcome,” Rothfuss explained. “They were dealing with these challenges when they were just trying to bank, things like make payroll for their employees.”

Although cryptocurrency has a negative reputation for being hard to track — thus, the currency of the criminal underworld — Long said the opposite was true.

“I came across cryptocurrency in 2012 when I was working on Wall Street,” she said. “When we put money in (a traditional) bank account, we technically are lending the bank that money, and they may or may not pay it back to us. I wanted to be able to own my assets outright.”

On the stock exchange, bookkeeping can be inaccurate as Dole Food Company shareholders discovered in 2015 when more than 4,500 shareholders submitted claims for nearly 50 million company shares, despite the fact only about 36 million existed. Cryptocurrency, on the other hand, allows people to accurately track their assets.

“With cryptocurrency, it’s very clear who owns the asset,” Long said. “If you control the private cryptographic key, which is what enables you to move the asset, then you own the asset.”

Land said law enforcement agencies are catching up to the technology and using cryptocurrency data to track down criminal organizations.

“As long you follow the data, you’ll be able to trace where the asset goes, and where it’s coming from with a higher degree of certainty than you would have with large amounts of cash,” he said. “There’s a lot of software products out there that specialize in bringing transparency to the digital asset markets.”

Bipartisan tech

As with most new technologies, cryptobanking has a potential for hiccups.

“There’s always a risk, because it’s innovation,” Land said. “I’m literally spending 90 percent of my time trying to mitigate those risks. In case one of the banks fail, we have policies and procedures and resources to ensure it doesn’t cost the state money.”

Making sure SPDIs don’t cost taxpayers money while providing a “net benefit” to the state is a top priority for the division, he added.

“We’re trying to control the known unknowns,” Land said.

Wyoming has more laws regulating blockchain, the technology behind cryptocurrency, than any other state in the nation, he said.

According to Rothfuss, Wyoming jumped to the head of the financial technology pack when Mead created the Blockchain Taskforce in 2018.

“This is an emergent field in financial technology that does not have a lot of robust governance structures around the country or world,” he said. “There were a lot of industry advocates trying to get some time with any government. They found a receptive ear in the blockchain task force and people flew in from all over the world.”

Despite growing divisions between political parties nationwide, Rothfuss said penning legislation for the growing sector has been a bipartisan effort.

“This is an area where we fortunately do have a tremendous amount of support from both sides of the aisle,” he said. “This is an area where everyone — regardless of party, regardless of branch — wants to see a path forward to success.”

Although the foundation was laid, but Rothfuss said Legislature has more work ahead.

“Much like with the LLC, you learn from experience, you amend the statutes to improve the functionality of that entity,” he explained.  “We’ll be doing much the same thing as time goes forward with SPDI banks.”

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