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Crypto mining scam

US Authorities Charge Seven International Hackers Over Cyber Crime Including “Crypto-Jacking”

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Hackers and scammers have begun to see the crypto industry as a valuable stage, as the number of crypto-related violations is clearly on the surge.  A recent bust by the United States has put a stop to an array of hacks.

Hackers Eye Crypto Mining Rewards

The United States Department of Justice recently shared an announcement highlighting charges on seven individuals for carrying out hacks on over 100 companies across the globe. The US officials suggested that the alleged criminals included two businessmen from Malaysia and five residents from China. The statement revealed that the hackers operated under the labels, “APT41,” “Barium,” “Winnti,” “Wicked Panda,” and “Wicked Spider.”

The hackers engaged in several illicit activities like theft of source code, software code signing certificates, customer account data, and valuable business information. Along with this, the alleged criminals went on to employ crypto-jacking schemes where they mined cryptocurrencies via victim computers. Over the years, the crypto mining industry has attracted a lot of interest from individuals, thanks to miner rewards. People stealing electricity or software to aid their mining process has caused a huge ruckus across the globe.

Speaking about the latest incident, the Deputy Attorney General, Jeffrey A. Rosen suggested that the officials were looking into disordering the interventions of the cybercriminals. He added,

“Regrettably, the Chinese communist party has chosen a different path of making China safe for cybercriminals so long as they attack computers outside China and steal intellectual property helpful to China.”

The statement further revealed that the hackers had targeted software development companies, video gaming platforms, computer manufacturers, nonprofit platforms, think-tanks, telecommunication firms along with governments as well as politicians. The hackers not only focused on the United States but also steered into Australia, South Korea, Taiwan, Thailand, Vietnam, Indonesia, Japan, Malaysia, Pakistan, Singapore, Brazil, Chile, Hong Kong, and India.

The five Chinese men charged by the US officials were identified as Tan Dailin, Jiang Lizhi, Qian Chuan, Fu Qiang, and Zhang Haoran.  The Malaysian businessmen were Ling Yang Ching and Wong Ong Hua. All the aforementioned individuals were aged between 32 to 46.

Malaysian Authorities Bust Crypto Miners For Stealing $600K Worth Electricity

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The cryptocurrency ecosystem has gained tremendous popularity and value over the last decade. The cryptocurrency mining industry, specifically, miner rewards has caught the attention of many. The rewards that miners earn after mining every block seems to have opened doors for many crypto miners as they have been flooding the ecosystem regardless of the resources. In more recent updates, two crypto platforms were raided by Malaysian officials for stealing electricity to facilitate crypto mining operations.

Malaysia’s Big Crypto Mining Arrest

As reported by The Star, a total of 2.5 million Malaysian Ringgit [600,000 USD] worth of electricity was stolen over a period of three years in Iskandar Puteri. The raid was carried out by Malaysia’s Energy Commission along with Tenaga Nasional Berhad [TNB], a multinational electricity company along with Iskandar Puteri City Council.

TNB reportedly incurred a loss of 80,000 Malaysian Ringgit every month which was about 20,000 USD. Nazlin Alim Sadikhi, the Regional Director of the Energy Commission revealed that illegal wiring was installed to make sure that the electricity went through directly and not through the TNB meter. The Director further said,

“The first premises is believed to have been operating for three years while the second premises for two years. We found 100 mining machines in the first premises and another 48 in the second premises.”

Post the raid, the authorities concluded that the electricity bills for both the first and the second premises accounted for 30 Malaysian Ringgit and 60 Malaysian Ringgit a month, respectively, as opposed to the 80,000 Malaysian Ringgit.

It is not news that crypto mining consumes a lot of electricity. Reports even suggest that crypto mining accounts for 0.21% of the world’s electricity supply. If the accused are found guilty, they would be obligated to face a total of ten years in prison or a hefty penalty of $1.2 million, under Section 37 of the Electricity Supply Act of 1990.

After China, Malaysia seems to be a hotbed for electricity thefts, particularly for crypto mining. In 2020 alone, Malaysian authorities reportedly took down about 90 such operations. A total of 288 mining busts have taken place in Johor since 2018. TNB’s Team Engineer, Mohd Satari Mohamad added,

“In most cases, the owners of the premises were in cahoots with the cryptocurrency mining operators. They have similar operation methods where they have illegal wiring installed to the mining machines to illegally draw electricity supply.”

DoJ Arrested Five People for Allegedly Running a $20 Million Crypto Mining Scam

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According to a statement by the United States Department of Justice (DoJ) on August 18, five individuals were detained in connection with a crypto mining scam that ended up defrauding investors to the tune of $20 million.

The suspects allegedly urged investors to invest in their cryptocurrency trading and mining firm, AirBit Club, which in reality does not exist. According to the report, the suspects include Gutemberg Dos Santos, Jackie Aguilar, Pablo Renato Rodriguez, Cecilia Millan and Scott Hughes. They allegedly lured unsuspecting victims to invest in their crypto mining scam, promising a massive return on capital.

Crypto mining scam lands five in hot soup

Notably, Renato Rodriguez and Gutemberg Dos Santos founded the AirBit Club back in 2015. Both of them recruited both Cecilia Millan and Jackie Aguilar as marketers. The suspects falsely claimed that the company’s income generation is derived from its cryptocurrency mining and trading activities.

As per the report, investors were required to purchase a membership plan for the various programs of the Ponzi scheme to start earning passive income. At the end of the day, however, the firm failed to keep its promise to investors. Suspects have used the proceeds of the crypto mining scam for personal gain, the acquisition of luxurious properties such as apartments, sports cars, and jewelry,

“As alleged, the defendants put a modern-day spin on an age-old investment scam, promising extraordinary rates of guaranteed return on phantom investments in cryptocurrencies. Thanks to HSI, the defendants are in custody and facing serious criminal charges,” stated Acting U.S. Attorney Audrey Strauss.

Suspects to face charges against conspiracy to commit fraud

Moving forward, the DoJ report notes that three of the suspects, Dos Santos, Rodriguez, and Millan are up against one charge against conspiracy to commit banking fraud, conspiring to commit money laundering, and conspiracy to commit wire fraud. On the other hand, Aguilar is being charged with a single conspiracy to commit wire fraud while Hughes is facing charges against one count of conspiracy to commit money laundering and one count of conspiracy to commit banking fraud.