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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.

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.

Cryptocurrency Debacle Predictor Slammed By Washington DC

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Caitlin Long, the CEO of Custodia Bank, has criticized lawmakers and regulators in Washington D.C. for their “misguided assault” on the cryptocurrency industry and for dismissing her warnings of significant “fraud” that was allegedly committed by now-bankrupt firms.

Shame On Washington, DC For Killing A Messenger Who Warned of Crypto Debacle is the subject of a Feb. 17 blog post by Long, who slammed the government for its approach to cryptocurrency regulation, which failed to safeguard investors and alienated good actors in the space. She said,

“Washington’s misguided crackdown will only push risks into the shadows, leaving regulators to play whack-a-mole as the risks continuously pop up in unexpected places.”

Long emphasized that she has “been calling out the worst of cryptocurrency while striving to develop a legitimate, compliant alternative that relegates frauds to the trash heap” via her digital asset custody company. But, the majority of today’s legislators appear determined to put an end to the high-integrity innovators.”

The CEO of Custodia Bank recalled the string of unpleasant encounters her company has recently encountered and stated that her attempts to cooperate with government organizations were ultimately flung back in her face.

She claimed that the White House, the Federal Reserve Board of Governors, the Kansas City Fed, and Senator Dick Durbin all launched simultaneous attacks against Custodia (who conflated the non-leveraged, 100-percent liquid and solvent bank with FTX in a Senate floor speech).

She added,

“Custodia tried to become federally regulated – the very result bipartisan policymakers claim to want. Yet Custodia has been denied and now disparaged for daring to come through the front door.”

She expresses views that are similar to those of individuals like Coinbase CEO Brian Armstrong, who has asserted on numerous occasions that organizations like the Securities and Exchange Commission (SEC) have responded coldly to his company’s attempts to maintain a dialogue in good faith.

Following the SEC’s decision to shut down Kraken’s staking services on February 9, Armstrong also questioned the lack of regulatory clarity in the U.S. and what appears to be a “regulation by enforcement” strategy.

Long wrote in her blog post that lawmakers and regulators in Washington today are probably ashamed of themselves for not putting an end to the cryptocurrency crooks and that Washington is calling for heads to roll. She further stated,

“Calls for a crackdown today are coming from many of the same policymakers who were charmed by the fraudsters. In a 180-degree turn, they’re now throwing the baby out with the bathwater.”

Unheeded Cryptocurrency Warnings

Long also claimed on Twitter that numerous people sought to warn Washington and “assist law enforcement stop” significant fraud before the collapse of several crypto corporations in 2022, but to no effect.

Long revealed in public for the first time that “months before the company crashed and left its millions of clients with losses,” she gave evidence of likely crimes perpetrated by an unnamed cryptocurrency firm to law authorities.

Jesse Powell, co-founder and CEO of Kraken, commented on Long’s Twitter thread and supported her claims by pointing out,

“I can’t tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years.”

Circle Warns Of Ongoing Phishing Activity Targeting USDC Token Holders

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On November 24th, Circle, a leading provider of financial technology and the creator of the USD Coin (USDC) stablecoin, tweeted a warning about an ongoing phishing activity that aims to trick users into sending USDC tokens to malicious addresses.

According to the statement:

The scammers are pretending to be from @centre_io. There is not a new version of USDC in the marketplace. Please do not fall for this.

However, a recent study by the Interisle Consulting Group shows that phishing is at its peak. So far this year, there have been over one million phishing attacks alone – a 61% increase from last year. Not only does it represent a significant threat to many users out there, but it also poses real consequences for companies.

Moreover, Phishing attacks targeting wallets and exchanges specifically have increased dramatically in the cryptocurrency space. Phishers successfully attack virtual currency using methods they have used against traditional financials.

The number of cryptocurrency-related phishing attempts rose by 257% yearly. Crypto wallets were the most often targeted companies, and over 80% of the generic top-level domains (gTLD) identified for phishing were fraudulently registered.

StraitsX’s Partnership With Circle

The company also issued a press release on November 24th, announcing that to grow their network, Circle Internet Financial and StraitsX, a Southeast Asian payment system, have teamed up. Through the StraitsX platform, users may swap USDC and deposit it into their personal or company accounts.

The press release said:

With USDC being one of the fastest-growing stablecoins in the world and a widely requested asset from partners on StraitsX, the integration aims to better serve its business, corporate, institutional and retail users. 

As of November 24th, 2022, over 20 million USDC has been traded through this new exchange, “the StraitsX OTC desk,” and the strong demand for digital assets on the platform has tripled what it was in 2021, according to the press release.

Aymeric Salley, Head of StraitsX, also asserts that this relationship is the first time they have worked directly with another stablecoin issuer, and they look forward to additional partnerships with similar-minded companies like Circle.

Vice President of Asia Pacific for Circle, Raagulan Pathy said:

We are excited to partner with StraitsX and we look forward to them offering the stability of USDC to their customers in the Asia Pacific region and beyond.

Related Reading | Solana Loses About $180M In Crypto On FTX

$575 Million Crypto Fraud & Money Laundering Scheme Busted in Tallinn

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Two Estonian citizens were detained in Tallinn after being accused of participating in a $575 million crypto fraud and money laundering scheme, according to the press release published by the U.S. Department of Justice (DOJ) on November 21st.

Sergei Potapenko and Ivan Turõgin allegedly defrauded hundreds of thousands of people by luring them into fraudulent equipment rental contracts with their crypto-mining company called Hashflare.

They also set up a fake bank called Polybius Bank. In reality, this company was never legitimate, so they never paid the dividends they had promised to those who invested in it. 

“Victims paid more than $575 million to Potapenko and Turõgin’s companies.” They then laundered the funds through shell companies that bought expensive real estate, cars, and other items for themselves.

Kenneth A. Polite, Jr., an assistant attorney general in the Criminal Division of the Justice Department, said that using more sophisticated frauds, unscrupulous actors may now more easily take advantage of innocent victims both domestically and internationally due to new technologies. 

He asserts that the department will not permit these scammers to get away unscathed and will do whatever they can to prevent the public from being exploited further.

Both Estonian Runs “Astounding” Crypto Fraud Scheme

U.S. Attorney Nick Brown for the Western District of Washington said:

The size and scope of the alleged scheme is truly astounding. These defendants capitalized on both the allure of cryptocurrency, and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme.

The indictment alleges that both of the defendent claimed that HashFlare was a major cryptocurrency mining operation. To compensate them, they sold contracts that allowed customers to buy a portion of the company’s mining power in exchange for the profits generated from their rented share.

Customers may view the quantity of virtual cash that their mining activity was said to have produced on the HashFlare website. Between 2015 and 2019, HashFlare contracts totaled more than $550 million, with customers from all around the world, including western Washington.

When investors demanded access to their mining funds, they couldn’t meet the demands. They either resisted providing a payout or just repaid them using virtual currencies they’d purchased on the open market – not ones they’d mined themselves. 

The defendants established Polybius in 2017 and raised $25 million, which they transferred to various bank accounts and cryptocurrency wallets they owned. 

In addition, hundreds of bitcoin mining devices, six luxury cars, at least 75 real estate assets, and cryptocurrency wallets were reportedly used in the money laundering scheme.

According to the news release, Potapenko and Turõgin are both accused of conspiring to conduct wire fraud, as well as 16 counts of wire fraud and one count of conspiring to launder money.

Both of them will receive up to 20 years in prison if they found guilty. The U.S. Sentencing Guidelines and other statutory considerations will also be considered when a federal district court judge decides on a sentence.

Related Reading | Bitcoin (BTC) Drops Below $16,000 As Market Troubles Mount

Crypto Ponzi Scheme: Ohio Man Arrested For $10 Million Worth Of Scam

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An Ohio man was arrested for allegedly running a Crypto Ponzi scheme, from which he raised at least $10 million from investors, according to a press release by the Department of Justice published on November 18th.

As the allegations state, Rathnakishore Giri has been accused of deceiving investors by lying to them about his experience in trading Bitcoin derivatives. As asserted by the indictment, he falsely promised them profitable returns without putting their principal investment at risk.

In fact, Giri is alleged to have used money from new investors to repay old ones, which is typical of a Ponzi scheme. He also misled his investors by making them believe that there were delays when they wanted to cash out or receive their promised principal.

According to the press release:

Giri is charged by indictment with five counts of wire fraud. If convicted, he faces a maximum penalty of 20 years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Crypto Crime Trends For 2022

A blockchain analysis firm, Chainalysis, previously reported that the amount of cryptocurrency-related crimes reached a new all-time high in 2021, with illegal addresses collecting $14 billion during the year.

The utilization of cryptocurrencies is increasing more quickly than before. In 2021, the total amount of transactions across all cryptocurrencies recorded by Chainalysis increased to $15.8 trillion, an increase of 567% over the total in 2020.

Source: Chainalysis

The biggest surprise of all, though, could be that the growth in illegal transaction volume was only by 79%, or by a factor of almost an order of magnitude less than total adoption. 

In addition, the value of crypto stolen from victims increased by 82% in 2021 to $7.8 billion. More than $2.8 billion, or almost as much as the rise over 2020’s total, came from rug pulls.

Moreover, by transaction volume, scams continued to be the most common cryptocurrency-based crime, stealing over $7.7 billion in cryptocurrency from victims all around the world.

That is an increase of 81% from 2020, a year in which scam activity dramatically decreased compared to 2019, mainly due to the lack of big Ponzi schemes. That changed in 2021 when Finiko, an Eastern European Ponzi scam primarily preyed on Russian-speaking individuals, collected more than $1.1 billion from its victims.

Source: Chainalysis

Related Reading | Crypto Miners In Russia To Get The Green Light To Sell On Global Markets

Crypto Scams Alert: Expert Compiled Active Scammer Strategies On Twitter

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A cyber security expert who goes by the name of Serpent wrote a detailed post on 8 currently active crypto/nft scams running amok on the social blogging site Twitter.

The analyst who heads artificial intelligence and community-powered crypto threat mitigation system, Sentinel shared how fraudsters utilize multiple channels like URLs, hacked verified accounts, fake projects, fake airdrops, and malware to target uninformed crypto users.

The first of them is spoofing URLs using lookalike Unicode letters. Here Hackers use visually similar characters to deceive people in online phishing scams.

Next, scammers masquerade as OpenSea representatives and attempt to induce a state of urgency to trick users into visiting a phishing website.

“This scammer, in particular, botted the likes, retweets & replies to his tweets to make it look legit, then locked the tweet so no one else can reply. They also use bots to mass DM people on Twitter linking them to the tweet, or mass mention people on the tweets”, Serpent wrote.

Another most common tactic is by using hacked verified accounts, bad actors here usually launch fake airdrops/mints, where they can get pretty creative.

Fake P2E Game/Project

Here, fraudsters target high-value NFT collectors, by impersonating/creating Play-To-Earn projects and releasing a “beta version” which is filled with malware.

Fake Art Commissions

“This is an individualized attack [predominantly targeting artists] commissioning fake work for an illegitimate company.”

Scams That Prey On The Already Fallen

The analyst, who has over 253k followers on Twitter, has expressed concern over the rise of sophisticated strategies after a recent wave of crypto phishing scams and protocol hacks incidents.

Serpent then brought light to Crypto Recovery Scam that is used by malicious actors to trick those who have recently lost funds to a widespread hack, stating:

“I’m sure most of us have seen these bots in the reply to tweets containing certain keywords. Simply put, they attempt to target people who have already been scammed, and claim they can recover the funds”.

As per Serpent, these scammers claim to be blockchain developers and hunt down users that have been victims of a recent large-scale hack or exploit, asking them for a fee to deploy a smart contract that can recover their stolen funds. Instead, they “take the fee and run.”

Over $1 Billion in Crypto Scams in 2021 Points to Social Media as the Root Cause

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According to the US Federal Trade Commission, social media and cryptocurrency are a “combustible combination for scams,” with social media platforms accounting for over half of all crypto-related scams in 2021.

The research, which was released on Friday, indicated that scammers stole up to $1 billion in cryptocurrency this year, a more than five-fold increase from 2020 and over sixty-fold increase from 2018.

The amount of cryptocurrency lost as of March 31 was already reaching half of the projection for 2021, indicating that progress isn’t slowing.

Crypto scams are more than ever

The top platforms utilized for crypto frauds, according to the FTC, were Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%). Interestingly, despite being clogged with spam and scam bots pushing fraudulent coin giveaways, Twitter, the social media medium commonly used by the crypto-community, was not listed.

Investment Related Fraud was the most common type of crypto scam, accounting for $575 million of the total $1 billion in fraud reports to the FTC’s Consumer Sentinel Network.

According to the FTC, frequent investment scams involve a so-called “investment manager” contacting a client and promising to grow their money if the consumer purchases cryptocurrencies and deposits it into an online account.

Impersonating a celebrity who can multiply any cryptocurrency sent to them or promising free cash or cryptocurrency are two other tactics. Scams involving investment in false art, gems, and rare coins, phony investment seminars and advice, and other miscellaneous financial scams are also included in this category, according to the FTC.

Romance Scams, with $185 million in losses, were the next highest crypto-fraud-related losses, in which a love interest tries to persuade someone into investing in a crypto scam.

People in their 20s–49s were the most likely to lose crypto to a fraudster, with those in their 30s being the heaviest hit, accounting for 35% of total reported fraud losses.

The amount of cryptocurrency lost increases with age, with the median individual recorded cryptocurrency losses for those in their 70s reaching $11,708, compared to just $1,000 for those in their 18s and 19s.

MetaMask Joins Hands With Asset Reality to Assist in Recovering Stolen Crypto

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To assist users in recovering stolen funds, Metamask has partnered with Asset Reality, a platform for accessing and recovering seized crypto and digital assets. The service is free, but customers must pay any applicable litigation fees.

The new collaboration has the potential to make legal action against scammers considerably easier for victims, as they will be able to pool their resources and split the costs of litigation.

MetaMask’s initiative to assist victims

Metamask is one of the most popular non-custodial wallets in the world, with over 30 million monthly active users. However, as cryptocurrency’s popularity has grown, so has the number of frauds and phishing attempts aimed at early adopters.

Scams involving stolen assets have been particularly difficult to combat because Metamask does not have access to users’ cash. The decentralized nature of cryptocurrency, which is based on pseudo-anonymity and immutability, has made it difficult for entities to track and recover stolen cash.

According to the official release, the new cooperation intends to assist users in recovering their digital assets, with Asset Reality in charge of researching scam operations.

All Metamask users throughout the world will be able to use the new service. Victims must report their losses through the official Metamask site, according to the press release.

Aidan Larkin, the company’s CEO, saw the relationship as a critical step toward closing a gap in the sector:

“When a user has funds stolen, often due to being scammed into handing over their passwords or Secret Recovery Phrase, they often have nowhere to turn to, in what is an incredibly difficult time for them emotionally and financially.”

According to Asset Reality, the usual system demands victims to pay a significant amount of litigation fees during the lengthy litigation process. The company will bring victims together to pursue collective action in order to change how things are done. In this approach, even users who have suffered a minor loss may be able to reclaim their possessions.

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.

Bitcoin: Jeff Bezos, Elon Musk, Joe Biden; No one survived the recent BTC hack!

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Bitcoin scams and hacks have been extremely common over the last few years, but the recent conundrum on Twitter may have been the most memorable one in recent years.

Surrounding a cryptocurrency scam, an unidentified hacker found his way into several high-profile Twitter accounts and asked for BTC donations on social media platforms.

From Apple to Uber, from Kanye West to Barack Obama, everyone’s profile was intertwined, and a common tweet shared across everyone’s handle echoed a BTC donations message.

“I am giving back to the community. All Bitcoin sent to the address below will be sent back doubled! If you send $1000, I will send back $2000. Only doing this for 30 minutes.”

BTC donation
Source: Instagram

Following the incredible mess, Twitter CEO Jack Dorsey made an online statement stating the organization’s regrets about the situation. The CEO said the company felt “terrible this happened.”

Dmitry Alperovitch, the co-founder of Crowd Strike, informed media outlets that the above-mentioned hack could possibly be the “worst witness” on a major social media platform in history.

Hacker possibly made $120,000 in Bitcoins; unconfirmed

Although unconfirmed, Business Insider suggested that data from available blockchain records suggested that a hacker might make up close to $120,000 over the short scam period.

The hack was identified within hours, but hundreds of people took the bait on the platform and one particular wallet address reported receiving more than 350 transactions.

Ironically, the functionality of Bitcoin may make it difficult to properly identify the exact amount that the hack was able to collect during the scam.

Tron’s Justin Sun announces $1 million bounty following hack

The attention received by the scam was widespread and crypto proponents were taking centre stage as well. Justin Sun, Founder of TRON, released a bounty of $1 million for the capture of the hacker as he revealed that his team was working closely with Twitter on the issue. He informed outlets,

“We are working closely with Twitter to resolve this issue immediately and return our accounts to normal. We are always vigilant in handling our accounts; operating safely and responsibly — taking the security of our accounts to the highest standards possible. This only further illuminates the urgent need for our society to adopt decentralized, trustless software, and services.”