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Binance Secures Dismissal in $8 Million Scam Lawsuit

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In the past year, the world of cryptocurrencies has witnessed numerous legal battles. Binance, the leading cryptocurrency exchange, became embroiled in one such lawsuit. The case revolved around a crypto scam commonly known as a “pig butchering” scheme. The plaintiff asserted that this cryptocurrency exchange was accountable for her significant financial loss amounting to $8 million. However, it appears that the court ruling did not favor this claim, as a judge in Texas dismissed the alleged involvement of Binance in the case.

Divya Gadasalli, a Texas resident, suffered a loss of $8 million and subsequently sought legal help. According to sources, Gadasalli became a target of a fraudulent scheme led by Jerry Bulasa, whom she had encountered on the dating application Tinder. Allegedly, Bulasa lured Gadasalli with promises of romantic and financial prosperity. Consequently, she was convinced to transfer millions of dollars as part of the deceptive “pig butchering” scheme.

After discovering the fraudulent scheme, Gadasalli extended her legal efforts to include Binance, along with TD Bank, Abacus Federal Savings Bank, and Poloniex. In addition to initiating legal action against these entities, she also sought injunctive relief. Gadasalli’s decision to involve these institutions indicated her belief that they were involved in facilitating or enabling the fraudulent activities that led to her financial loss. In this case, she alleged that the exchange was complicit as it provided exchange services to the scammer involved in the scheme.

Lack of Evidence Exonerates Binance in the Case

In a recent ruling, U.S. District Judge Amos Mazzant determined that there was insufficient substantial evidence to substantiate the assertion that this cryptocurrency exchange had played an active role in endorsing or facilitating the mentioned scam. The judge also highlighted that Gadasalli was unable to provide any concrete evidence regarding Binance’s direct involvement in the case. He stated:

“Considering the presented facts, it is possible that the stolen funds were eventually converted into cryptocurrency using this exchange. However, there is no indication that Texas was implicated in those transactions.”

Gadasalli contended that Binance and Binance.US were essentially indistinguishable entities. She put forth the argument that individuals utilized virtual private networks (VPNs) to circumvent restrictions and gain access to the exchange’s services.

Judge Mazzant also observed that Gadasalli was unable to provide evidence demonstrating that the fraudulent activities involving Binance took place within the jurisdiction of Texas. This was due to the fact that both Binance and Binance.US were prohibited from operating within the state. Consequently, the judge concluded that Gadasalli’s allegations against the exchange lacked the required evidence to establish a connection to Texas. This further restricted the legal foundation for her lawsuit against the exchange.

Cardano Founder Labels Ethereum Classic A ‘SCAM’ With No Roadmap, Innovation, Or Vision

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The Founder of Cardano (ADA), Charles Hoskinson, recently expressed his views on Twitter, alleging Ethereum Classic (ETC) is engaged in fraudulent activities. According to Hoskinson, ETC lacks any meaningful objective other than facilitating insiders to offload their holdings onto unsuspecting investors. Hoskinson criticized the project for lacking a roadmap, innovation, a competent team, and a clear vision.

Cardano Founder’s Critical Remarks On Ethereum Classic

Charles Hoskinson’s remarks, triggered by a Twitter post from the Proof of Work (POW) Summit, have generated attention and speculation within the cryptocurrency community. The timing of Hoskinson’s comments has sparked inquiries since Ethereum Classic (ETC) has recently experienced a notable upswing in its price and overall popularity.

Hoskinson believes that Ethereum Classic (ETC) was constructed over several years through extensive efforts and marketing conducted at Input Output Global (IOG), a prominent technology company specializing in blockchain engineering and research. Hoskinson argues that it would be unethical to subject the project’s followers to a scheme that is now considered fraudulent.

Moreover, Hoskinson believes that Ergo, a project he is presently engaged in, should have embodied the qualities and objectives that Ethereum Classic (ETC) initially aimed for Ergo, a cryptocurrency, addresses blockchain technology’s limitations, including enhancing scalability, interoperability, and security.

The founder of Cardano also asserts that Ergo is innovative, has a goal, has morally sound leadership, and has money for the future. He thinks Ergo is a superior option for investors seeking a cryptocurrency with a distinct vision and a strategy for the future.

Hoskinson’s remarks have ignited a discussion within the cryptocurrency community regarding the credibility of ETC and the ethical obligations of developers and industry insiders. While some individuals have criticized Hoskinson’s statements, others have commended him for taking a stand against practices that he deems unethical.

Hoskinson Highlights Key Factors for Secure Hardware Wallets

The controversy surrounding Ledger has triggered a discussion among cryptocurrency users regarding the significance of security in hardware wallets. In light of this, Charles Hoskinson, the Founder of Cardano, has offered his insights on the factors that users should consider when selecting a hardware wallet.

Hoskinson stresses the significance of regularly auditing open-source software from multiple sources, which guarantees transparency and enables the swift identification and resolution of potential vulnerabilities.

Furthermore, he proposes that simplicity plays a crucial role in ensuring security. Creating a hardware wallet with a minimized size reduces the potential for attacks, making it challenging for hackers to identify weaknesses.

The founder of Cardano emphasizes the significance of non-updatable firmware when a company makes explicit security assurances. This guarantees that attackers cannot exploit any vulnerabilities uncovered post-release of the hardware wallet. He proposes that enhancing security in the hardware wallet realm could be achieved by decentralizing the update process.

Additionally, the founder of Cardano cautions users that hardware wallets are not purchased for everyday usage or to provide a similar user experience to hot wallets but rather to maximize the personal protection of their cash. Hardware wallets are an extreme kind of self-custody created to ensure that the private keys remain on hardware that is difficult to tamper with and remain in one location.

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Binance Australia Halts PayID AUD Deposits, Westpac Implements Ban Amid Scam Concerns

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In a surprising turn of events, Binance Australia, one of the leading cryptocurrency exchanges, announced its inability to process PayID AUD deposits for its valued users. 

The shocking revelation came through a heartfelt tweet from the official Binance Australia Twitter account, leaving countless investors and enthusiasts in dismay.

The statement unveiled the unfortunate decision imposed by a third-party payment service provider. This unexpected roadblock has forced Binance Australia to halt the facilitation of PayID AUD deposits immediately. 

The sudden disruption raises questions about the reliability and resilience of the current financial infrastructure supporting cryptocurrencies.

To compound matters, it has been reported that Bank Transfer withdrawals are also anticipated to be affected by this unforeseen setback. While the timeline for this additional impact remains unconfirmed, Binance Australia has vowed to keep its users informed once more information becomes available. 

The delay in clarifying the matter might heighten concerns among crypto enthusiasts, as withdrawal capabilities are an integral part of the overall trading experience.

However, in an effort to ease apprehensions, the company assures its users that they can still participate in cryptocurrency trading by utilizing credit or debit card transactions. 

This temporary alternative will allow individuals to continue buying and selling digital assets without interruption. Additionally, the company’s renowned P2P marketplace will operate as usual, enabling users to engage in peer-to-peer transactions seamlessly.

Moreover, addressing the anxieties surrounding the safety of funds, Binance Australia seeks to assure its customers that their assets remain secure.

Westpac Bans Customers From Binance Amid Scam Concerns

Meanwhile, according to a latest report, Sydney-based Westpac Bank has prohibited its customers from transacting with Binance to reduce losses caused by scams. 

According to Scott Collary, Westpac’s group executive of customer services and technology, scammers increasingly exploit overseas exchanges, leaving customers vulnerable to financial losses that are difficult to recover. 

Westpac is implementing new security measures to safeguard customers from scams, with investment scams accounting for about half of all scam losses and a third of scam payments being transferred to cryptocurrency exchanges. 

This action by Westpac follows the cancellation of Binance Australia’s derivatives license by Australian regulators and the ongoing lawsuit filed by the US CFTC.

CFTC accuses the company of operating an illegal exchange and a deficient compliance program, allegedly evading US law while soliciting American customers for its derivatives business.

Related Reading | Coinbase Expands Service Offerings In Singapore To Boost Local Adoption

Navigating Crypto Scam Waters: Study Exposes Increased Fraud Potential in Celeb-Backed Token Offerings

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Recent studies indicate a correlation between the involvement of celebrities in promoting cryptocurrency projects and the increased probability of those projects being fraudulent.

In the study titled “The Impact of Celebrity Endorsements on Cryptocurrencies,” Joshua T. White and Sean Wilkoff, both former economists at the SEC, examined the consequences of celebrities endorsing different initial coin offerings (ICOs).

The researchers discovered that there was a significant rise in fraudulent activity related to initial coin offerings (ICOs) that received endorsements from celebrities. Their findings indicated a 23-26 percentage point increase in scams until September 2019 and a further 39-40 percentage point increase in fraudulent ICOs until April 2023.

The researchers emphasized that this “suggestive evidence” serves as a warning sign for investors. The study specifically analyzed the actions of 21 celebrities, such as Floyd Mayweather, Snoop Dogg, Paris Hilton, and Lionel Messi, during the period from 2016 to 2018.

Celebrity-Backed ICOs: Profits Soar as Star Power Drives Crypto Investment

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Navigating Crypto Scam Waters: Study Exposes Increased Fraud Potential in Celeb-Backed Token Offerings 2

Joshua T. White explained in an email to Decrypt that their assumption was that celebrities could enhance the visibility of cryptocurrencies due to their extensive social media presence, which could trigger a fear of missing out (FOMO) among potential investors.

Considering the nascent nature of blockchain and cryptocurrency, the researchers were uncertain whether celebrities possessed the expertise to identify reputable projects or the knowledge about legal obligations when endorsing a specific coin without disclosing any compensation.

Additionally, the researchers discovered a notable pattern: celebrity endorsements were more likely to be associated with scams when the celebrity’s profession did not align with the product of the ICO, based on their sample data.

On the other hand, the researchers found that when a celebrity’s profession aligns with the product of the ICO, such as a soccer player endorsing an ICO that aims to fund a blockchain-based sports gambling website, the likelihood of it being a scam decreases.

According to White’s comments to Decrypt, this observation indicates that celebrities tend to exercise greater diligence or possess a better comprehension of the product they are endorsing when they understand the specific use case of the token. To illustrate, he drew an analogy between a soccer player endorsing cleats versus shampoo, suggesting that the player would likely have a better understanding of the cleats’ features compared to the chemical composition of the shampoo.

In the research’s conclusion, the authors emphasize the importance of improved understanding and due diligence for both investors and celebrities when it comes to cryptocurrencies. They underscore the necessity for both parties to familiarize themselves with the associated risks before endorsing any digital asset.

Kraken Creates Decoy Crypto Accounts to Lure in Scammers

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A person who was running a scam from a call center pretended to be President Joe Biden and tried to steal an amount of Bitcoin that they believed was worth $450,000 from a streamer. However, the situation did not go as planned and instead led to disorder and confusion.

Kraken, a cryptocurrency exchange in the United States, has come up with an innovative way to identify suspicious cryptocurrency wallets. They have created a fake cryptocurrency account on their exchange to attract and trap fraudulent individuals.

On May 10, popular streamer Kitboga, who creates content about irritating scammers, posted a tweet stating that Kraken had provided him with a specially designed platform to interact with scammers. He used this environment to irritate a scammer who pretended to be President Joe Biden, whom he had previously encountered about a year ago.

Joint Operation to Catch Crypto Scammers

In the video clip that accompanies the tweet, Kitboga is shown having an amount of Bitcoin worth approximately $450,000 (which is equivalent to $27,506 according to the current ticker price) in the fake cryptocurrency account provided by Kraken.

The scammer is able to see the funds through a screen-sharing software that he had convinced Kitboga’s character to download, and he becomes extremely excited at the prospect of a large sum of money entering his crypto wallet.

In the video, Kitboga is playing the role of an elderly woman and mistakenly sends all the funds to the wrong wallet address belonging to the scammer. The scammer becomes extremely angry and starts using foul language to berate Kitboga.

It is worth noting that the scammer had given a Bitcoin wallet address hosted by Kraken, which allowed the exchange to detect their activity and flag it as suspicious.

The collaboration between Kraken and Kitboga was made possible thanks to the efforts of the exchange’s chief security officer, Nick Percoco.

Kitboga has a significant following on social media platforms, with 1.2 million followers on Twitch and 3 million followers on YouTube. He creates comedic content that involves wasting the time of call center scammers by portraying non-tech-savvy characters.

In some instances, he has even been successful in getting the fraudulent websites used by the scammers taken down by reporting them to the hosting companies.

According to his YouTube profile, Kitboga’s main goal is to expose and mock scammers who take advantage of people every day. He aims to waste their time, expose their lies and methods, and report their activities when possible, all while bringing humor to a serious and dark situation.

On May 1, Kitboga shared a video in which he discussed a new scam related to Bitcoin and social security. The scam targets victims through emails or text messages claiming that unusual purchases have been made with their bank accounts.

The scammers involved in the social security scam ask victims to call a provided number and then claim that their identity has been stolen. They instruct the victim to withdraw all their money, purchase Bitcoin, and send it to a supposedly “secure government wallet.”

In response, Kitboga had some fun with these scammers by pretending to be a grandson who bought 10,000 BTC and then accidentally sent it to the wrong address.

Binance Prioritizes User Safety With Joint Anti-Scam Campaign

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In light of recent criticisms regarding money laundering, Binance has launched a campaign in partnership with law enforcement agencies to prevent scams and protect potential victims. 

Recently Binance was on the hotline with the news that Senators had accused the exchange of illegal financial activity and requested various documents from the exchange, including balance sheets and information about its anti-money laundering policies. 

The exchange denies the allegations, but the senators’ accusations have raised doubts about the legitimacy and stability of the company.

According to the latest blog post by the exchange, the COVID-19 pandemic has increased traditional and crypto-related scams, making it easier for criminals to obtain sensitive information through social engineering tactics. 

Binance Tackles Rising Scam Trends with Targeted Alert System

As part of their commitment to user safety, Binance has launched the Joint Anti-Scam Campaign, starting in Hong Kong, where they worked with local law enforcement to provide targeted alerts and crime prevention messages to users initiating withdrawals on the platform.

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Source: Binance

The campaign includes helpful tips, examples of common scams, and relevant resources and contacts, with the message sent to users based in Hong Kong when they initiate a withdrawal on Binance. 

The project has seen tremendous results since its launch, with approximately 20.4% of users reviewing their transactions for potential scam risks within the first four weeks. 

The Hong Kong Police Force noted that they had joined forces with stakeholders such as Binance to deliver key crime prevention advice to relevant users.

Moving forward, the exchange aims to cooperate with law enforcement agencies in other regions and continue promoting its anti-scam program, complementing its existing anti-crime and crime prevention initiatives worldwide. 

The Joint Anti-Scam Campaign represents a small but impactful tweak to improve user safety without affecting the user experience. Binance encourages law enforcement and government agencies to submit case support requests to their Law Enforcement Portal.

However, the exchange’s Joint Anti-Scam Campaign is a proactive effort to prevent scams and protect potential victims in partnership with law enforcement agencies. 

By providing targeted alerts and resources to users initiating withdrawals, the exchange aims to empower users to identify and avoid scams and seek help in the event of a potential attack. 

The project has already achieved significant results in its initial phase, with Binance looking to expand the campaign to other regions and continue promoting its user safety initiatives.

DFPI Unveils Crypto Scam Tracker To Help Californians Avoid Fraudulent Activities

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The Department of Financial Protection and Innovation has taken a significant step towards safeguarding Californians from cryptocurrency scams. In an announcement, the agency unveiled the DFPI Crypto Scam Tracker, “a database searchable by company name, scam type, or keywords.”

As per the DFPI, scammers are exploiting people’s growing interest in digital assets to prey on vulnerable individuals in California. The move is in response to the increasing prevalence of scams in the crypto space and is part of the department’s commitment to protecting consumers and investors.

With the Tracker, consumers and investors can research complaints and scams that the public has reported. The goal is to help individuals spot and avoid crypto scams, thereby preventing harm to themselves and others.

DFPI Commissioner Clothilde Hewlett stated:

Scammers are in the shadows, using the public’s interest in crypto assets to take advantage of the most vulnerable Californians. Through the new Crypto Scam Tracker, combined with rigorous enforcement efforts, the DFPI is committed to shining a light on these ruthless predators and protecting consumers and investors.”

How the Crypto Scam Tracker Works

The Crypto Scam Tracker also features a glossary designed to help users better understand common scams. The DFPI will continue to update the database as new scams are reported, enabling prompt alerts to protect the public.

Each year, the DFPI receives thousands of consumer and investor complaints. Among the most reported are imposter scams, which are also challenging for individuals to detect. 

As per the DFPI’s findings, imposter websites are frequently reported scams. These websites or companies often have names that resemble those of legitimate businesses or websites operating in the same market. 

This can create significant confusion for consumers, making them vulnerable to exploitation by bad actors seeking to profit from unsuspecting victims. By taking advantage of this confusion, scammers can easily mislead individuals into making fraudulent transactions.

Moreover, among the 36 complaints currently recorded in the Tracker, the predominant cases involved social media and social engineering scams. These fraudulent schemes typically involve users being deceived into taking action through scams on platforms such as Facebook, WhatsApp, Instagram, TikTok, and dating apps.

Furthermore, a significant proportion of these complaints, around Four-fifths, are categorized by the DFPI as “pig-butchering scams,” which are essentially social engineering ploys employed by scammers to build a rapport and gain the victim’s trust.

Related Reading | Terra Founder Slapped With Lawsuit Over $40B Loss

Ethereum Gas Spenders Scam Alert: Report

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The top two gas consumers on the Ethereum network, according to the most recent data from blockchain security company PeckShield, are zero-transfer con artists. To access the victims’ wallets, scammers utilize bogus wallet addresses to coerce users into sending money to these addresses.

It is well known that Ethereum Virtual Machine (EVM) chains are the primary target of zero-transfer scammers. Fraudsters construct fictitious wallet addresses that mirror the genuine addresses of their potential victims. Using a smart contract and the “TransferFrom” feature, they transfer 0 tokens from any wallet. They can deceive unwitting victims in this way by fabricating a phony wallet history with zero transfers.

Users who don’t do their homework can utilize the scammer’s address, putting their money at risk because their wallets are probably compromised. According to PeckShield, scammers who make these zero-token transactions are the biggest spenders on Ethereum.

Users must exercise extreme caution when making blockchain transfers, particularly on the Ethereum network. Before transmitting any money, users should always verify the legitimacy of the wallet addresses they are utilizing. Users can secure their money and stay safe from zero-transfer scams by taking these precautions.

Ethereum, Platform For Stablecoin Testing

In other news, Visa is reportedly testing the use of the stablecoin USDC to accept payments and make payouts on Ethereum. The transactions were “big value settlement payments,” according to Cuy Sheffield, Vice President and Head of Crypto at Visa.

He supposedly stated,

“That’s been one of the areas where we want to build muscle memory. The same way that we can convert between dollars in euros on a cross-border transaction, we should be able to convert between digital tokenized dollars and traditional dollars.”

A group of researchers and engineers from Visa have also been analyzing the theoretical underpinnings of several blockchains. Security, scalability, interoperability, privacy, and use cases for various protocols are among the topics of focus.

The business began looking at possibilities for enabling auto payments through Ethereum wallets a few months ago. The industry leader in credit cards published a proposal explaining how customers may set up automated payments in the second part of December 2022. Users were able to take banks and other centralized organizations out of the equation.

XRP Scam Hit A U.S Sports Channel

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XRP scam has raised its ugly head once again, this time invading the official Twitter account of GOL TV, a U.S based TV sports channel.

Scams masquerading as XRP or Ripple-affiliated entities have become a nuisance on social media offering lucrative investment opportunities that are not backed by legitimate contracts or regulatory oversight.

This time too, the scammers exploited the image of Ripple founder Brad Garlinghouse to trick users into clicking dubious links by posting too good-to-be-true easy investment schemes.

Victims who take the bait find themselves with no recovered capital and no way to recoup their lost funds.

In order to do fraudulent activities that target XRP holders, these bad actors use a variety of strategies, including false accounts, public sentiment manipulation, misrepresenting credentials, multi-level marketing scams, complex phishing networks, and more advanced techniques.

Even if these techniques are not new, unaware victims can still be taken advantage of and suffer the consequences before it is too late.

One needs to exercise restraint and look for reliable sources before investing any money or sending money in order to avoid falling for any more of these scams in the future.

That being said, XRP is in the limelight as the legal tussle with the SEC is heading toward a decisive end, with many believing that its major backer Ripple would emerge as a victory.

Brad Garlinghouse, the chief executive of blockchain firm Ripple, recently expressed optimism about the token and revealed his expectations for the resolution of the legal dispute between Ripple and the SEC in Davos.

Shortly after his statement, multiple sizable transactions of XRP have been detected, including one that might be deemed “big”, data from the top cryptocurrency tracking service Whale Alert revealed.

Massive XRP Transactions After Ripple CEO’s Statement

The aforementioned cryptocurrency tracker discovered four significant transactions, one of which had a staggering 261,094,839 XRP, valued at $102 million.

In accordance with information released by community explorer Bithomp, this enormous lump was transferred between two anonymous wallets without any indication of addresses associated with any crypto exchange.

The rest of the transfers carried 34,700,000 XRP by Bitso crypto exchange.

It is a unicorn based in Mexico and one of Ripple’s major On-Demand Liquidity [ODL] partners, moved 34,700,000 XRP internally as it has often been doing recently, as it is actively spreading the usage of OLD in Latin America.

The other two lumps of the tokens were shoveled by whales from Bittrex exchange to Bitstamp and Bitso.

Four Bitcoin Scammers Sentenced to 15 Years in Prison for Stealing $25M

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Four individuals involved in a large-scale Bitcoin and other crypto assets scam that resulted in the theft of $25 million have been sentenced to a combined 15 years in prison. They were found guilty of fraud and money laundering at Preston Crown Court, according to the CPS report.

Three Months Fraudulent Bitcoin Scheme 

The group, consisting of three men and one woman ranging in age from 24-54, participated in a scheme to acquire £21 million (US$25 million) through a fraudulent Bitcoin scheme between October 2017 and January 2018. Their leader, James Parker, who operated the scheme from his home in Blackpool, passed away in 2021 before facing charges.

Despite this, the prosecution service unit, in collaboration with the North West Regional Organised Crime Unit, was able to identify and seize assets acquired through illegal means, totaling approximately £1,000,000 through a Civil Recovery Order in the High Court.

In court, it was revealed that Parker had exploited a loophole to illicitly withdraw £15 million worth of crypto assets from his trading account on an Australian-based exchange. His associates, Kelly Caton and Jordan Robinson were also found to have removed £2.7 million and £1.7 million, respectively, through deceitful means. 

Parker’s financial advisor, Stephen Boys, collaborated with a UK national based in the United Arab Emirates to convert the stolen cryptocurrency into cash and then laundered the money through various foreign-based online accounts.

A Crown Prosecution Service spokesman said:

A very significant amount of the laundered assets have been returned or are in the process of being recovered on the behalf of the Australian cryptocurrency exchange.

Additionally, Jonathan Kelleher, the prosecutor, stated that the individuals in question utilized the internet from their own residences to acquire a substantial amount of Bitcoin, valued at tens of millions of pounds, which they were not entitled to possess.

However, Stephen Boys was sentenced to six years for converting and transferring criminal property. Kelly Caton and Jordan Robinson, both convicted of fraud and the illegal acquisition and conversion of criminal property, received four-and-a-half years each in jail. 

James Austin-Beddoes, also found guilty of fraud and acquiring criminal property, received an 18-month suspended sentence after pleading guilty to converting criminal property, per the report.

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