TronWeekly

Crypto World News

You are here: Home / Archives for Crypto Scam

Crypto Scam

BitBrowser Hackers Move $386M To Crypto Mixer eXch

by

The crypto community was shocked by the news of a massive hack on BitBrowser, a platform that allows users to participate in airdrops and earn tokens. The hackers managed to steal about $386 million worth of Ethereum and other cryptocurrencies from the platform’s servers, according to SlowMist, a prominent blockchain security firm.

According to a tweet by Colin Wu, a well-known Chinese crypto journalist, the hackers have recently transferred 236.27 ETH, or about 70.6% of the total stolen funds, to a crypto mixer service called eXch. Crypto mixers are used to hide the origin and destination of funds by mixing them with other transactions.

Wu cited SlowMist, a leading blockchain security firm tracking the hackers’ movements. SlowMist revealed that the hackers had previously moved some funds to various exchanges, including Binance, ChangeNow, and FixedFloat. They also sent funds to different blockchain networks, such as Ethereum, zkSync Era, Arbitrum, and Optimism.

BitBrowser acknowledged the security breach in an official statement and urged users to change their passwords and revoke their authorization on the platform. The platform also claimed that it was working with law enforcement agencies and security experts to recover the funds and catch the culprits.

BitBrowser Hackers Ignore Bounty Offer

Intere­stingly, the hackers displayed a curious disre­gard for a tempting incentive provide­d by BitBrowser. Despite the­ enticing promise of a $1 million bounty for any vital lead le­ading to their arrest and the re­covery of the funds, the hacke­rs chose to overlook it altogethe­r. 

BitBrowser had reached out to the­m via an on-chain message to their addre­ss, granting them 24 hours to return 90% of the funds or face­ dire legal consequences. Shockingly, they defie­d this request and instead transferred the­ir ill-gotten gains to eXch in what can be assume­d was an attempt to cash out discreetly. 

It is worth noting that throughout the fraudulent activities they were involved in, they displayed a modicum of compassion by returning a small portion of Ethereum (ETH) back to one victim who had pleaded for mercy via on-chain appeals amidst the perpetrators’ fraudulent activities.

This high-profile breach exe­cuted against BitBrowser stands as one of history’s most substantial cryptocurre­ncy heists, effective­ly underscoring the inhere­nt risks associated with centralized platforms re­sponsible for storing both users’ sensitive­ data and financial holdings.

Related Reading | Cardano’s Week of Triumphs: Development Milestones & Community Connections

Ronaldinho’s $61M Crypto Pyramid Scheme Defense: Testimony Unveiled

by

Retired soccer icon Ronaldinho Gaúcho has found himself entangled in the world of cryptocurrency, as he recently testified at a congressional hearing in Brazil to disavow any association with a purported crypto pyramid scheme bearing his name. The alleged scheme, known as “18kRonaldinho,” promised extravagant 2% daily returns on cryptocurrency investments. However, Ronaldinho vehemently denied his involvement and insisted that he was a victim of the fraudulent operation.

During the parliamentary committee inquiry on August 31, Ronaldinho presented evidence demonstrating that he had never partnered with the company behind 18kRonaldinho. He contended that his name and likeness were exploited without his consent. Images from the company’s marketing materials were displayed during the hearing, featuring Ronaldinho prominently. The former soccer star clarified that these images were taken as part of a contract he signed in July 2019 with a subsidiary of the company, focusing on the sale of watches. However, he emphasized that the contract was terminated in October of the same year and was never executed.

When queried by the inquiry’s president, Aureo Ribeiro, about whether he intended to reimburse those who invested in the company, Ronaldinho declined to provide an answer. He also remained silent when asked about the $61 million lawsuit filed against the firm, which sought damages resulting from the alleged scheme. The enigmatic responses from Ronaldinho left the committee members and spectators puzzled, eager to uncover the truth behind his involvement.

Inquiry Unveiled: 11 Crypto Schemes Under Scrutiny

Ronaldinho’s appearance before the parliamentary committee marked a pivotal moment in the ongoing investigation into crypto pyramid schemes in Brazil. The inquiry, launched in June, aims to probe 11 companies that allegedly lured investors with promises of lucrative returns using cryptocurrency. Brazil’s Securities and Exchange Commission raised concerns about these companies, leading to a thorough examination by the country’s Chamber of Deputies.

Ronaldinho’s previous nonattendance at two hearings added to the intrigue surrounding the case. His assertion that adverse weather conditions prevented him from attending one of the hearings left some skeptical. However, the August 31 hearing served as his final opportunity to address Congress. Had he not appeared, Ronaldinho could have faced fines or even arrest, with authorities forcibly compelling his presence.

As the investigation into the alleged crypto pyramid schemes continues, Ronaldinho’s denial of involvement raises critical questions about the extent to which individuals’ identities can be exploited in the realm of cryptocurrency. The broader implications of such cases highlight the importance of regulatory oversight and the need to safeguard investors from fraudulent schemes in the evolving landscape of digital finance.

Cryptocurrency Scam Leaves DEA Short $55K: Lessons in Address Verification

by

In a recent turn of events, the U.S. Drug Enforcement Administration (DEA) found itself on the losing end of a cunning cryptocurrency scam, resulting in the agency’s loss of more than $55,000 in seized digital assets. The incident underscores the growing sophistication of cybercriminal tactics and the necessity of robust verification protocols in the realm of cryptocurrency transactions.

In May of this year, the DEA confiscated approximately $500,000 in Tether, a dollar-linked cryptocurrency, from two Binance accounts suspected of laundering illegal narcotics proceeds. However, unbeknownst to the DEA, a scammer was closely monitoring blockchain activities and spotted an opportunity when the agency sent a test amount of Tether to the United States Marshals Service. The scammer swiftly created a fake cryptocurrency address that mimicked the first five and last four characters of the legitimate Marshals’ account.

The swindler then used a technique known as “airdropping” to insert the fake address into the DEA’s cryptocurrency account, making it appear as if it were the legitimate Marshals’ address. Airdropping involves sending tokens representing a certain currency value into another user’s account – a practice sometimes used for legitimate token launches but exploited here for malicious purposes. Falling into the trap, the DEA mistakenly transferred over $55,000 in Tether to the scammer’s address.

Despite the DEA’s swift action to contact Tether and request freezing of the fraudulent account, Tether officials reported that the funds had already been used, leaving the agency with a substantial loss. Working alongside the FBI, the DEA traced the converted funds to an ether wallet, revealing that the scammer had been using cryptocurrency exchanges and Gmail accounts for the fraudulent transactions. These incidents highlight the importance of meticulous verification in cryptocurrency dealings.

DEA’s Crypto Security Lesson: Vigilance and Collaboration

This incident is reminiscent of a common crypto scam where attackers airdrop fake tokens alongside phishing websites, enticing victims to reveal their wallet keys. In the DEA’s case, the scam went a step further by exploiting the agency’s practice of checking only the first and last characters of unique account identifiers. This oversight allowed the scammer to manipulate the transaction, ultimately leading to the loss.

Cryptocurrency experts emphasize the need for heightened vigilance and multi-layered verification processes when dealing with significant sums of digital assets. While tools like Chainalysis’ Address Screening exist to detect rogue addresses, their use in the DEA’s operations is unclear. Jake Moore, a global security advisor at ESET, highlights the importance of involving multiple parties to confirm transactions involving substantial amounts of money to prevent such incidents.

In an era where cybercriminals are becoming increasingly adept at exploiting digital vulnerabilities, institutions like the DEA must adapt by implementing stringent security practices. This incident serves as a stark reminder that the digital landscape demands constant vigilance, thorough verification, and collaboration among various stakeholders to thwart potential threats and protect valuable assets from falling into the wrong hands.

ZachXBT Reveals $13.3M Crypto Heist Via 54 SIM Swap

by

ZachXBT, known as a detective for cryptocurrency transactions, has uncovered a series of digital thefts that have shocked the crypto community. In just four months, a massive $13.3 million has been boldly taken by hackers who tricked their way through 54 cases of SIM card swapping. These focused attacks have seriously shaken up the safety of people who own cryptocurrencies.

ZachXBT, renowned for uncovering crypto scams, has brought the concerning information to light. The approach is both malicious and triumphant: hackers capitalize on account vulnerabilities, rapidly immersing victims in a manufactured state of urgency. This compels victims to believe their assets will vanish, coercing hasty and anxious actions.

To thwart such insidious attacks, ZachXBT issues a solemn warning against using SMS two-factor authentication. Instead, he champions the utilization of foolproof security measures like authenticator applications and security keys. Vigilance in safeguarding accounts has become paramount in the face of mounting threats.

Delving into the patterns that underscore these 54 SIM swaps, ZachXBT sheds light on the disturbing geographical concentration of victims. A vast majority find themselves entangled within the United States, their vulnerability exploited by cunning hackers. Noteworthy carriers like T-Mobile, Verizon, and AT&T are unwittingly implicated in facilitating these breaches.

John Deaton’s Response to ZachXBT’s Tweet

John Deaton, a prominent figure in the crypto legal domain and the visionary behind Crypto Law, highlights the immense seriousness of this circumstance. Furthermore, Deaton’s personal experience with a SIM swap attack in March underscores these cybercriminals’ alarming level of expertise. Their adeptness in assuming false identities and manipulating situations is remarkably persuasive.

The narrative gains traction as Deaton recounts the treacherous path that led to his account freeze on Uphold, a prominent digital wallet and trading platform. The attacker’s calculated maneuver involved a duplicitous call after a seemingly innocent verification email. The attacker, masquerading as “Uphold Verification,” cunningly coerced Deaton into divulging sensitive information.

The mechanics behind these SIM swap attacks are elucidated by law enforcement. The FBI has outlined the intricate process by which these criminals “socially engineer” customer service representatives of mobile carriers, ensuring a seamless switch of the victim’s phone number to a SIM card under the attacker’s control. This sinister shift grants unrestricted access to confidential codes and texts, providing a direct gateway into victims’ financial coffers.

The crypto realm is now left grappling with the problem of how to fortify its defenses against a rapidly evolving breed of cybercriminals. As the shockwaves of ZachXBT’s revelations reverberate, stakeholders must reevaluate their security protocols and brace for a new wave of digital onslaughts.

Related Reading:| Tennessee’s Crypto Scam: Blessings Turned To Sham

Crypto Crackdown: Thailand Takes Aim at Facebook Scam Ads

by

Crypto stands firm as Thailand’s Ministry of Digital Economy and Society challenges Meta’s Facebook, warning of potential legal measures unless the platform takes active steps to combat the surge of cryptocurrency scam ads. This stance declared on Monday, emphasizes the mounting apprehension about the unregulated propagation of deceptive tactics within the digital landscape.

The Ministry’s decision to potentially seek the closure of Facebook in the country is a response to the platform’s alleged failure to combat scam ads, some of which are linked to cryptocurrencies. These ads have enticed victims with promises of substantial returns on investments, primarily within the realm of digital coins and cryptocurrencies. With more than 200,000 individuals reportedly affected by these scams, the Ministry’s intention to take the matter to court signifies a significant step towards regulating online fraud.

Evidence of Facebook’s complicity in these scams is being amassed by the Ministry, with plans to present it before a local court. By doing so, Thailand aims to hold the social media giant accountable for allowing these scams to proliferate on its platform. The Ministry’s move is not just a reaction to financial losses incurred by victims, but also a reflection of the broader threat that such scams pose to the integrity of online spaces.

Crypto Celebrity Exploitation: Trust Undermined by Scammers

A particularly troubling aspect of these scams is the exploitation of celebrity images to gain victims’ trust. By leveraging the recognition and credibility associated with well-known personalities, scammers manipulate individuals into believing the legitimacy of their offers. This underscores the sophistication of modern online scams and highlights the need for platforms like Facebook to be proactive in implementing measures that can thwart such tactics.

Facebook’s response to this situation will undoubtedly set a precedent for how social media platforms address fraudulent activities on their platforms. The Ministry’s insistence on a more proactive approach from Facebook aligns with the growing global emphasis on the accountability of tech companies for the content they host. Whether this standoff will lead to Facebook adopting stricter measures to identify and remove scam advertisements or a potential shutdown in Thailand, the case serves as a reminder that the digital age necessitates responsible oversight.

In conclusion, Thailand’s Ministry of Digital Economy and Society’s threat to take legal action against Facebook showcases the escalating battle against cryptocurrency-related scams on social media platforms. By targeting Facebook’s inaction against fraudulent advertisements, the Ministry aims to safeguard its citizens from financial harm. This development underscores the pressing need for robust measures to combat online scams and emphasizes the shared responsibility of tech companies to create secure digital environments.

Blockchain Capital Falls Victim to Token Claim Scam

by

In a recent incident that underscores the persistent vulnerabilities of the cryptocurrency space, Blockchain Capital, a renowned venture capital firm specializing in blockchain and crypto technologies, fell victim to a malicious hack on the social media platform Twitter. The hack involved the promotion of a fraudulent token claim, highlighting the importance of enhanced security measures in the digital asset realm.

Screenshot 309
Scammers posting a link to a fake Blockchain Capital website under the guise of a token claim.

The attack on Blockchain Capital’s Twitter account was a grim reminder that even prominent players in the blockchain industry are not immune to cyber threats. The attackers managed to gain unauthorized access to the account and subsequently posted tweets promoting a dubious token giveaway. Unsuspecting followers were enticed to participate in the giveaway, lured by promises of substantial returns. This type of scam, known as a token claim scam, has become increasingly prevalent in the crypto sphere.

Blockchain Capital swiftly responded to the breach by deleting the fraudulent tweets and issuing warnings to its followers about the scam. Blockchain Capital stressed that it would never ask users to send cryptocurrency or private keys for any reason. While these immediate actions helped mitigate the potential fallout, the incident serves as a stark reminder of the need for continuous vigilance against cyber threats.

Cryptocurrency Scams Spur Blockchain Education

The hack also shines a light on the critical role of social media platforms in maintaining the security and integrity of their users’ accounts. As more blockchain and crypto-related activities occur on these platforms, it becomes imperative for them to implement robust security measures to prevent unauthorized access and fraudulent activities. This includes multi-factor authentication, stronger password policies, and prompt response protocols in case of breaches.

Screenshot 310
Tierion founder Wayne Vaughan was one of many to warn of the scam attempt.

The incident further underscores the importance of educating users about potential scams and fraudulent schemes in the cryptocurrency space. As the industry gains mainstream attention, there’s a parallel increase in the number of scams aiming to exploit the lack of understanding among newcomers. Industry participants, including companies, influencers, and communities, must take it upon themselves to educate their followers about the risks and best practices in the digital asset landscape.

The recent Twitter hack that targeted Blockchain Capital highlights the pressing need for enhanced security measures and education within the cryptocurrency industry. As the popularity of blockchain and crypto continues to rise, so do the risks associated with cyber threats. Industry players must prioritize security and remain vigilant against scams and breaches, while also fostering a culture of awareness and education among their users. Only by doing so can the industry maintain its credibility and pave the way for a safer and more secure future.

Tennessee’s Crypto Scam: Blessings Turned To Sham

by

A couple from Tennessee is currently facing charges related to an investment scheme called “Blessings of God Thru Crypto,” which the Commodity Futures Trading Commission (CFTC) alleges to be a fraudulent venture that duped more than 100 victims and collected at least $6 million within a mere six months.

The accused, Michael and Amanda Griffis, utilized their connections from their real estate business to persuade people, including mortgage brokers and former real estate customers, to invest their savings into a multi-million dollar crypto investment pool. Despite lacking any trading experience, the defendants successfully convinced over 100 individuals to hand over their funds for this venture.

CFTC Seeks Restitution for Crypto Victims

Under the guise of trading crypto futures contracts, the scheme promised high returns and assured participants that their funds would be securely managed by the Griffis couple. However, the CFTC asserts that no actual trades were ever executed. Instead, a substantial amount, approximately $4 million, was diverted to digital wallets outside of the Griffis’ control. Additionally, more than $1 million was misappropriated to cover personal debts and extravagant expenses, including college tuition, an all-terrain vehicle, and credit card debts.

Screenshot 299
Excerpt from the futures trading document purportedly written by defendant Michael Griffis

The defendants now face charges of defrauding over 100 victims and failing to register with the CFTC. In response to the complaint, the CFTC is seeking a permanent injunction to prevent the Griffis couple and any potential collaborators from engaging in future commodity interest transactions. The commission also demands full restitution for the victims who suffered losses due to the scam and proposes imposing civil penalties on the Griffis.

However, the CFTC acknowledges that obtaining full restitution may prove challenging, as the accused individuals might not possess sufficient funds or assets to cover the losses. Meanwhile, Michael and Amanda Griffis are associated with Exit Realty Screamin’ Eagle, located in Clarksville, Tennessee, as per their LinkedIn profiles. Amanda is listed as a “Broker/Co-Owner,” while Michael holds the title of “Realtor.”

North Korea’s Crypto Caper: $700 Million Sweep

by

In the past, there have been numerous instances of cryptocurrency theft linked to hackers operating from North Korea. The rising global acceptance of cryptocurrencies has rendered them an appealing target for cybercriminals. Their decentralized nature and the regulatory uncertainties surrounding them have exposed cryptocurrencies to vulnerabilities and made them susceptible to such attacks.

In the year 2022, the trend of cryptocurrency theft persisted, witnessing a surge from $3.3 billion in 2021 to $3.8 billion in reported thefts. North Korean hackers were involved in the theft of approximately $1.7 billion worth of cryptocurrencies, as stated in various reports.

Safeguarding Cryptocurrency: Security Measures Needed

Recent updates from Yonhap, South Korea’s state intelligence agency, revealed that a staggering $700 million worth of crypto was stolen by North Korea during a crypto heist in 2022. This substantial amount, if used differently, could afford North Korea the resources to acquire 30 intercontinental ballistic missiles, as highlighted by the intelligence agency.

A high-ranking official from the National Intelligence Service (NIS) affirmed that North Korea was responsible for seizing $700 million in virtual assets through two separate incidents in the previous year.

Over the past years, North Korea’s cyberattacks have intensified, with a specific focus on the space and defense sectors both within its borders and beyond. This escalation coincides with the country’s ambitions to bolster its nuclear capabilities and launch space satellites, as disclosed by an official source.

Despite facing international pressure, North Korea persists in intensifying its efforts to pilfer virtual assets and convert them into monetary gains. According to experts’ estimates, hacking activities contribute to approximately 30 percent of North Korea’s foreign currency earnings.

The series of thefts involving digital assets underscores the necessity for enhanced security measures in the digital financial realm. As the popularity and adoption of digital currency continues to grow, so does the allure for cybercriminals seeking to exploit the vulnerabilities present in the decentralized system. Regulatory bodies and industry stakeholders must collaborate to develop robust protective measures to safeguard against such threats and maintain the integrity of the digital assets landscape.

Father and Son Brace for Extended Jail Time over $10M Crypto Scam Allegations

by

Brandon Austin and his father, Eugene “Hugh” Austin, have been arrested by American authorities on allegations of orchestrating a significant cryptocurrency scam, where they are accused of misappropriating more than $10 million from investors.Brandon, who has admitted his guilt, is scheduled to receive his sentencing on September 6th.

Crypto Investors Exploited for Luxurious Living

As per recent reports, federal agents apprehended Brandon Austin, 27 years old, in April, and subsequently arrested his father on July 5. US Attorney Damian Williams stated that the father-son duo “exploited both experienced and inexperienced investors in the cryptocurrency market, defrauding them of millions of dollars.”

The family, specifically, enticed individuals to invest in cryptocurrencies through their scheme, promising significant returns. However, they dishonestly appropriated all the invested funds for their personal gain.

Authorities allege that the perpetrators indulged in a lavish lifestyle, staying at luxurious hotels, purchasing expensive vehicles, and dining at high-end restaurants. Additionally, they used wire transfers to gift money to their loved ones. Brandon sent $50,000 to the mother of his children and $32,000 to his girlfriend, while Hugh transferred $10,000 to his father and romantic partner.

Expanding their fraudulent activities, the Austin family took it a step further by organizing extravagant trips to prominent destinations such as New York, Miami, and various locations in Europe. They invited investors as special guests, who later discovered that these lavish gatherings were merely a ploy for the Austin family to identify and target new victims.

Each investor fell prey to varying amounts, with one individual losing over $500,000. Frustrated with Hugh’s deceit, some investors demanded that he fulfill his promises by delivering the promised assets and investment returns. In response, the alleged criminal replied succinctly, stating, “I will call you in about 25 minutes. Thanks, Hugh.”

Brandon, having pleaded guilty, has accepted the forfeiture of $3.4 million and agreed to pay $2 million in restitution. Additionally, federal agents confiscated a 2022 E-Pace P250 Jaguar, estimated to be valued at over $60,000.

Both individuals now face the possibility of up to 20 years in prison, charged with offenses such as money laundering and wire fraud. The sentencing for Brandon is expected to be determined on September 6 by the judges.

A Mini Version of Crypto OneCoin?

The case mentioned bears resemblance to one of the largest cryptocurrency frauds in history, known as OneCoin. The Ponzi scheme, masterminded by Ruja Ignatova, also known as “The Cryptoqueen,” operated from 2014 to 2016 and resulted in the loss of around $4 billion for investors.

Following the initiation of an investigation into OneCoin by authorities, the primary orchestrator of the scam mysteriously vanished. Ignatova was last seen in Athens, Greece, in 2017, and her whereabouts have since become the subject of various conspiracy theories.

Speculation suggests that she may be evading capture on a luxurious yacht, strategically positioned in the Mediterranean Sea, beyond the jurisdiction of coastal law enforcement agencies.In addition, some sources have hinted at the possibility that Ignatova met a gruesome fate in 2019, allegedly at the hands of a Bulgarian drug lord who incurred significant losses as a result of investing in her fraudulent scheme.

77% Of Crypto Scams Recede, Victims Wisely Take Heed

by

Chainalysis reports a noteworthy decrease of 77% in cryptocurrency scams, which fell from $3.3 billion to $1.1 billion in the initial half of 2023. Conversely, ransom attacks have made a strong comeback, with perpetrators earning 62.4% more revenue than in the corresponding period of 2022.

According to Chainalysis’ latest Mid Year Crypto Crime report published on July 12, a noteworthy trend has emerged: scam revenue has been declining for the second year in a row. This stands in contrast to the usual pattern where scam revenue tends to rise during bullish market conditions. However, in 2023, this customary trend has been broken.

The firm speculated that the decline in scam revenue could be attributed to victims becoming more cautious with their investment decisions and being better informed about the risks of scams through government initiatives, industry awareness campaigns, and media reporting.

AI-Assisted Scams Rise: Crypto’s New Battleground

While inflows into illicit entities have dropped by 65% compared to the previous year, inflows into risky entities like cryptocurrency mixers and high-risk exchanges decreased by 42%. Chainalysis partially attributed these declines to decreasing transaction volumes, although illicit inflows have fallen at a faster rate than legitimate services.

8de74339 3715 4619 8ea5 16526552e540
Cumulative flows for legitimate, risky and illicit services from January 1 to June 30 for 2020-2023

Chainalysis also warned about the potential use of artificial intelligence tools, including deepfakes, to promote scams. They noted the increasing prominence of AI-assisted scams, particularly text-based ones like romance and pig butchering scams.

Hacks experienced a decline of $1.1 billion compared to the first half of 2022. However, ransomware revenue increased by 62.4% to $449.1 million in the first half of 2023. Attackers are now focusing on “big game hunting,” targeting large organizations with deep pockets to extract the maximum possible ransom payments.

0c482b18 9d3e 42ab 8671 ddb2d5435bb6
Cumulative flows for ransomware revenue from January 1 to June 30 for 2022 and 2022.

Risk Officer Andrew J. Davis of cybercrime consulting firm Kivu suggested that the decrease in ransomware attacks in 2022 may have been due to improved cybersecurity practices and stricter sanctions against paying ransoms. Consequently, ransom attackers are now aiming to maximize their gains from willing victims.

Chainalysis highlighted that these figures are conservative estimates and that illicit and risky transaction volumes are likely to increase as new illicit activities emerge. It’s also important to note that the data does not include cryptocurrency-related crimes where cryptocurrency is used as a mode of payment.