John McAfee’s Bitfi Wallet Accused of Using Cheap Parts, the CEO of Bitfi Was Once Tracked by the SEC
There was more bad news for John McAfee’s Bitfi wallet today as the manufacturer was accused of using “cheap” parts. As that news was breaking, it was also revealed that Bitfi’s CEO was on the radar of the United States Securities and Exchange Commission (SEC).
McAfee, the 72-year old antivirus pioneer turned crypto evangelist, has been in headlines for the past few weeks after releasing his much-anticipated Bitfi wallet.
The $100,000 bounty to anyone who can hack the https://t.co/VJ7qrOxQqL wallet is not just for the first person who hacks it, but to everyone who can hack it. If 100 people hack it, each one gets $100,000. But I promise you, it cannot be hacked, ever, by anyone or anything. Try it
— John McAfee (@officialmcafee) July 27, 2018
The Bitfi wallet is “unhackable” according to McAfee. As proof, the company is offering a $100,000 bounty to anyone who can hack the wallet. That bounty has faced sharp criticism: those who have tried to claim the bounty insist that the rules aren’t fair, for example, and that the company is taking deliberate steps to dissuade researchers from claiming the bounty.
The rules for collecting the bounty for hacking rhe BitFi wallet can be found here: https://t.co/RUF9pRnAmN
Before you waste your time, however, I have outlined why the wallet is unhackable. If you still think it is hackable after reading, then you need to reeducate yourself. pic.twitter.com/n32lwsJaKo
— John McAfee (@officialmcafee) July 28, 2018
The bounty controversy occurred last week.
This week, we have two new controversies with the Bitfi wallet. As reported by AMBCrypto, the CEO of Bitfi, Daniel Khesin, was once being watched by the Securities and Exchange Commission.
Prior to running Bitfi, Khesin was the CEO and President of D.S. Healthcare Group Inc. Here’s what happened next, according to AMBCrypto:
“The company’s board and management sought for the Federal Government in order to protect the shareholders after Daniel unlawfully took control of the D.S. Healthcare Group, Inc.”
The controversy occurred in 2016. In a press release from the SEC, the regulatory agency claimed that,
“Mr. Khesin engaged in a series of questionable stock transactions without board authorization, engaged in self-dealing and potentially engaged in transactions designed to artificially inflate the price of DSKX common stock.”
The SEC statement goes on to explain Khesin’s inappropriate conduct:
“Both prior and subsequent to his dismissal, Mr. Khesin engaged in totally inappropriate conduct, including an illegal campaign of self-help, additional violations of the federal securities laws, as well as intimidation and defamation against Board members, management, and outside professionals.”
This is the man who is now the CEO of Bitfi.
Bitfi Wallet Uses Parts from “Cheap” Smartphones
After the news about Khesin’s connection to the SEC broke, it was revealed that the Bitfi wallet uses parts from “cheap” smartphones.
The cheap parts were spotted by @Cybergibbons and @Mindstalker612, who posted the accusation on Twitter.
— StOrE_yOuR_kEyS (@Mindstalker612) July 28, 2018
So now we have pictures of the bare @Bitfi6 board.
It's just a MEDIATEK MT6580.
No sign of a secure element.
— Ask Cybergibbons! (@cybergibbons) July 29, 2018
Cybergibbons posted pictures of the bare Bitfi wallet motherboard, revealing it to be just a MEDIATEK MT6580 board with no sign of a secure element.
As explained by Kamil Brejcha on Twitter, that’s the same board used by cheap Android phones. The lack of any secure element makes Bitfi’s hardware equivalent to a cheap Android.
All of this is reinforcing the idea that John McAfee’s unhackable wallet is just a marketing gimmick designed to lure gullible Android users.
It Doesn’t Look Good for Bitfi
Ultimately, all of this news is beginning to pile up against Bitfi. Anything that comes out of John McAfee’s mouth should be treated with skepticism, and the unhackable claim was dubious to begin with. Redditor CryptoPujeet perhaps explained it best when he summarized the complaints against Bitfi, John McAfee, and Daniel Khesin:
“BitFi’s CEO one Daniel Khesin was under the SEC scanner wherein he is alleged inter alia to have violated duty to shareholders, physically taking control of the company’s headquarters and misappropriating company’s property after his termination from the company.”
CryptoPujeet also added that McAfee is facing renewed heat over his pump and dump scams and other issues:
“Last but not the least, any crypto company choosing to hire McAfee for promotion needs to be seen with suspicion. Its really guilty until proven otherwise. No one is in a hurry to forget all the PND scams McAfee has been involved in. Since the SEC’s crackdown on celebs promoting ICOs and shitcoins, his stream of income has died down and this is nothing but a meek attempt to revive his image by promoting the least secure hardware wallet product out there.”
Ultimately, Bitfi has a dubious claim about being “unhackable”. It has a CEO who has been on the SEC radar in the past for shady corporate activity. And it’s being promoted by a man infamous for his marketing gimmicks and pump and dump scams. It doesn’t look good for Bitfi right now.
You can read the full Reddit post here: