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A former product tester for Microsoft has been sentenced to more than nine years in prison after being convicted of defrauding the tech giant and using bitcoin as a means to hide the funds he obtained.

Volodymyr Kvashuk’s actions were first laid out in a July 2019 criminal complaint that was filed in the U.S. District Court for the Western District of Washington at Seattle. As outlined in the court documents, Kvashuk was first an outside tester before being brought in on a full-time basis. He was involved in testing a system through which users could buy things with digital gift cards and other sources.

Per the complaint, Kvashuk made real-world purchases through the system — an unintended result of the testing phase — and eventually he resold more of these digital gift cards in excess of $10 million. 

The complaint went on to allege that Kvashuk converted the proceeds from these sales, which were conducted via online websites, into bitcoin, which he later converted into dollars by way of a Coinbase account. As part of that process, he is said to have used Chipmixer.io, a transaction mixing service that was more recently used in an effort to obscure the source of funds stolen from crypto exchange Kucoin. The court document also shows that he obtained a small amount of funds on Paxful, a peer-to-peer crypto exchange.

The government further alleged at the time that Kvashuk, when reporting cryptocurrency proceeds to the Internal Revenue Service, sought to classify the bitcoin he’d received as a gift. This part of the alleged scheme is what drew the IRS into the eventual investigation and prompted the declaration this week that Kvasuk’s conviction and sentencing “is the nation’s first Bitcoin case that has a tax component to it.”

“Simply put, today’s sentencing proves you cannot steal money via the Internet and think that Bitcoin is going to hide your criminal behaviors. Our complex team of cybercrimes experts with the assistance of IRS-CI’s Cyber Crimes Unit will hunt you down and hold you accountable for your wrongdoings,” IRS-CI Special Agent in Charge Ryan Korner said in a statement.

In addition to the jail sentence, Kvashuk was ordered to pay $8,344,586 in restitution. 

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Blocknative, an Ethereum-focused project that provides tools for on-network transaction transparency, has raised $5 million in new financing.

According to a Tuesday announcement from the firm, the financing was led by Blockchain Capital. IDEO Colab Ventures, Coinbase Ventures, Industry Ventures and Foundry Group also took part in the round, per the post. Blockchain Capital’s Spencer Bogart has also joined the firm’s board of directors.

“We are working towards a future in which a crypto-native global population can transact with clarity and confidence,” the startup said. “We have an ambitious product roadmap designed to accelerate the arrival of this blockchain-based future, and accordingly we are now growing our engineering, design, and go-to-market teams.”

Blocknative offers a data platform for tracking transactions as they occur on the blockchain network, specifically the mempool, where transactions populate before being included in miner blocks. 

In recent weeks, other Ethereum-focused data startups — such as Dune Analytics, Covalent and Nansen — have also raised funding rounds. 

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

OMG is the native cryptocurrency of the OMG Network (OMG), a blockchain network built on top of the Ethereum blockchain that speeds up transaction times and reduces transaction fees by handling Ethereum transactions off of Ethereum’s main network. The open-source project ensures a scalable and secure system for decentralized applications (dapps) and crypto transactions on Ethereum.

OMG price

The OMG token has a total supply of 140.2 million, all of which were released during the initial launch. According to the project’s initial white paper, OMG was designed as a way to facilitate payments on the Omise platform using the Ethereum network in a more scalable manner.

When OMG switched from OmiseGo to the OMG Network, the token became a utility and staking token that allowed users to run validator nodes on the OMG proof-of-stake (PoS) network. Although validation could be done through staking, OMG doesn’t feature any on-chain governance functionality.

OmiseGo’s OMG initial coin offering from June to July 2017 raised $25 million in ETH. The majority of the funds were used by the development team at a 2:1 ratio between network and end user application development. The rest was used to pay for regular business expenses. Tokens were both publicly and privately allocated as follows:

• 65.1% of the tokens issued at the sale were issued to ICO participants.
• 5% of tokens were airdropped after the ICO to every ETH token holder as a way to promote the use of OMG.
• 20% were held in reserve by OmiseGO, with a lockup period of one year, for future costs and fees for the development of the project.
• 9.9% of OMG were distributed to key contributors and team members of the project, subject to a one-year lockup.

OMG hit its all-time low of $0.3197 in July 2017 shortly after the ICO. As a way to promote OMG, the development team decided to airdrop 5% of the total OMG supply to all Ethereum token holders. Although the token fell from the promotion, it proved to be successful. In the next month, as OMG soared over 2,000% to a high of $7.34.

OMG’s price reached its all-time-high of $28.35 in January 2018 during the peak of a crypto-wide bull run. After briefly falling below $10 during a broad crypto market crash, OMG reclaimed $20 following its listing on major Asia-based exchanges Bithumb and Zebpay.

How does OMG work?

The OMG Network uses Plasma, which is a layer 2 scaling product for Ethereum that commits every block on the Plasma chain to the Ethereum chain. Plasma is primarily used to deposit funds from Ethereum to the OMG Network, making transactions on the OMG Network and returning funds back to Ethereum.

OMG uses a proof-of-stake (PoS) consensus algorithm that enables users to stake their tokens (deposit them into a smart contract) and receive transaction fees and block rewards for blockchain validation. Returns via transaction fees are distributed proportionally to the amount of OMG a user stakes.

Key events and management

OMG Network (then OmiseGo) was co-founded by entrepreneurs Jun Hasegawa and Ezra Don Harinsut in 2015 as a subsidiary of their parent company Omise Holdings, a Thailand-based fintech. During their time at Omise, the duo began working on open-source blockchain products, contributing to the Ethereum Foundation alongside Microsoft and Wanxiang Group, a Chinese multinational company that operates one of China’s biggest auto-parts makers.

Between August 2014 to June 2020, Omise Holdings raised $100.4 million via private venture capital funding rounds from investors including SBI Investments, SPARX Group, SCB 10X Capital, Mitsui Fudosan, 31Ventures, Toyota Financial Services and others.

In May 2020, Omise Holdings announced that it was changing its name to SYNQA in order to distinguish itself as a holding company separate from the Omise platform and OmiseGo token. In an effort to further differentiate its products from its brand, SYNQA rebranded its OmiseGo blockchain system to the OMG Network one month later.

In December 2020, OMG Network was acquired by Genesis Block’s Hong Kong-based trading firm Genesis Block Ventures. Following the news, OMG rallied over 18% from $3.74 to $4.41. Two months later, data privacy developer Enya announced a strategic partnership with the OMG Network to jointly develop layer 2 products.

In September 2021, Enya announced the mainnet launch of a new Ethereum layer-2 scaling system called the Boba Network. Enya is a core contributor to the OMG Foundation, which represents the joint development of products created by OMG and Enya. The Boba Network plans to offer a 1:1 drop of BOBA tokens to OMG holders who are willing to transfer their token to the Boba Network.