The New York Times's Dealbook blog has news about Bitcoin fraud:
Bitcoins are little more than computer code — created according to a set algorithm and traded between online wallets using virtual keys. Some people insist that virtual currencies could become a revolutionary new form of payment in the real world. Bank of America became the first major Wall Street bank to release research about Bitcoin on Thursday, noting that it could become “a major player in both e-commerce and money transfer.”
So far, though, Bitcoin has been driven up primarily by people who are betting it will rise and rise because there is a finite supply. The initial computer program established that only 21 million Bitcoins would ever be created.
Because there are no limits on who can buy Bitcoins, they have attracted investors of all stripes. The value of all the Bitcoins in existence is now more than $12 billion after a volatile surge increased the value by more than 1,000 percent over the last month.
But the excitement over this rapid ascent has obscured the fraud, hacking and outright theft that have become an increasingly regular part of the virtual currency world — even for the most sophisticated, legitimate players — and the lack of any visible response from law enforcement agencies.
This has allowed more than 30 episodes in which at least 1,000 Bitcoins — or $1 million at the current rate of exchange — were stolen or transferred illegally, according to a frequently updated list on the most popular online forum for Bitcoin. Of those cases, 10 involved losses of more than 10,000 Bitcoins, or $10 million at the current value. The authorities have only been publicly involved in one of these cases.
This week, the virtual currency world has been abuzz over a heist in which 96,000 Bitcoins — currently worth about $100 million — were said to be taken from an online marketplace known for selling illegal drugs.
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Hat tip: Garrett Moritz