Latest Crypto Scam Uses Virtu's Trading History to Fool Users

(Bloomberg) -- The latest scam in the cryptocurrency market comes from a non-existent coin that falsely claims to be backed by Virtu Financial Inc., the electronic-trading firm that famously lost money on only one day from 2009 to 2014.

Virt Coin issued a press release Thursday that said Doug Cifu, Virtu’s chief executive officer, was about to issue the digital currency. “Totally fake,” said Andrew Smith, head of investor relations at New York-based Virtu. An email to an address on the Virt Coin website wasn’t immediately returned.

“Virtu has notified the appropriate authorities and intends to commence all necessary legal actions to defend itself from any attempt to infringe on Virtu’s copyrights, trademarks and intellectual property,” the company said in an emailed statement Friday. A search on Coinmarketcap.com, which tracks over 1,500 digital coins, found no reference to Virt Coin.

Scams on social media related to digital currencies have been spreading in recent weeks, often promising to send a large amount of Bitcoin or Ether in exchange for a small deposit of the same cryptocurrency. The fake accounts use altered profiles of well-known people or companies to make the offer appear legitimate.

The scam involving Virt Coin could be slightly different. It may try to entice people to send Bitcoin or Ether to an address in exchange for early access to Virt Coin. Because there is no such thing as Virt Coin, that money would be stolen.

The history of Virtu adds an ironic twist to the scam. Vincent Viola, the billionaire founder of the company, named it for the Latin word “virtus," which drew on the attributes of valor, character and worth.

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