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Cryptocurrency scam: Illegal assets seized in a $162M fake ICO case

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Under the pretext of launching a fake coin called Morris cryptocurrency, a Kerala businessman Nishad K has allegedly collected over $162 million from hundreds of investors following which India’s Enforcement directorate [ED] seized illegal assets worth $4 million belonging to the accused kingpin. The assets attached under the Prevention of Money Laundering Act [PMLA] belong to the 31-year-old and his associates who allegedly duped at least 900 individuals.

Drilling deeper, the financial investigation agency has revealed that Nishad K, through his various firms such as Long Rich Global, Long Rich Technologies, and Morris Trading Solutions collected money from gullible investors who fall for the flashy promotional events, glossy websites along with the provision of e-wallets to each investor via web-based applications.

Officials further alleged that the deposits taken from the general public were illegal and without any statutory permission from any regulatory agencies. Moreover, the investigators asserted that the money duped from investors was spent for buying immovable properties, various other cryptocurrencies, and purchasing luxury cars and hotels. The ED stated,

In this regard, the cryptocurrencies such as Ethereum [5.92387265], BTC 90.08267646], BNB [5.51232875], YFI [0.023062], VET [4284.4], ADA [226.479601], USDT [35.88576551] totally valued at $34924 were found and all the above cryptocurrencies, purchased out of the proceeds of crime, were converted into INR and attached by the Enforcement Directorate.

That being said, with more people in India trading in all sorts of cryptos, hackers are having a field day.

Cryptocurrency scams- Regulation is the need of the hour

Some experts feel that the lack of regulation on cryptocurrency in India has increased the risk, as many users don’t have much knowledge of which coins are legitimate and which are not. N.S. Nappinai, an advocate of the Supreme Court of India believes that “at a very basic level” regulation will ensure that there is some sort of clarity with respect to what is permissible and what is criminal. “So that, from an investor’s point of view, it is preventive and protective. And from the law enforcement perspective, it gives them clarity to prosecute.”

Argentina Border Crossing Process Affected as Bitcoin Scammers Take Off with Sensitive Information

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Scams and frauds have become prevalent in the cryptocurrency industry, with the community taking precautions against the devastating consequences they can have. Over the last few years, the world of virtual assets has done its best to combat this pariah, but even then, one or two major issues are still emerging.

The latest scam to rock the financial and decentralized world was a ransomware attack that halted Argentina’s border crossing for four hours. According to reports, the hackers demanded Bitcoin to lift the curb that they had put on the national system.

What makes this ransomware attack different from other instances is the fact that this was the first time a national process was interrupted for the sake of money. Argentina’s official immigration agency, the Dirección Nacional de Migraciones first reported the Netwalker ransomware attack on August 27th after which the discussion has been about paying the $4 million ransom. 

The agency added:

“Being approximately 7 a.m. of the day indicated in the paragraph above, the Directorate of Technology and Communications under the Directorate General Information Systems and Technologies of this Organization received numerous calls from various checkpoints requesting technical support. The Comprehensive Migration Capture System (SICaM) that operates in international crossings was particularly affected, which caused delays in entry and exit to the national territory”

Further details revealed that the organization did not consider it as an ordinary situation and that the event was evaluated against the infrastructure of the Central Data Center and Servers Distributed. The attack targetted the organization’s MS Windows-based files such as ADA SYSVOL and SYSTEM CENTER DPM. Sources have revealed that the $4 million ransom first started out as $2 million, which was jacked up because of the delay in payment. The attackers demanded the ransom to be paid in bitcoin, almost worth 55 BTC. 

 The website run by the scammers can be viewed on Tor with a link to a “Stolen Data” page. Here, users can view a screenshot of the content stolen from the Argentinan agency as proof. Investigative agencies are still trying to deal with the threat with many claiming that the hackers had covered every last step. 

Alabama and Texas Bans South African Firms After Crypto Credit Card Scam

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Securities watchdogs in both Alabama and Texas issued a cease and desist order following a crypto credit card scam promoted by South African firms. Accordance to a joint order issued by both the Texas State Securities Board (TSSB) and the Alabama Securities Commission (ASC), companies such as the South African Liquidity Gold Trust, Liquidity Gold Solution and Liquidity Global Card Solution and an individual named Lance Angus Jerrard have issued prohibition orders.

As per reports, the sanctioned firms and Jerrard advertised a fraudulent debit card, dubbed Liquidity Card on social networks and a radio station in Austin, Texas. The perpetrators wrongfully stated that there is a secure way for people to make money while staying at home amid the COVID-19 disaster.

Crypto credit card scam breakdown

The firms allegedly utilized their advertisements to claim that Liquid Card could help investors evade taxes by transacting in stablecoins such as TUSD, USDC and PAX coin. The fraudsters were to recruit and convince new users to commit a minimum of $1,150 in one portion or more of 8,400 parts in the crypto credit card scam. Furthermore, the investors claim that the debit card functions as a traditional debit card.

The project, which was scheduled to start in October, aimed to register over 8 million new users in 36 months. According to the joint order release, the firms mentioned above offer investors a written 100 percent cash back guarantee, which the order terms as fraudulent. Notably, the watchdogs also noted that they had disguised vital information; the risks posed by the project to potential cardholders, and how they make money from the capital employed.

Involved parties have 30 days to issue a response

According to the prohibition order, all the liquidity companies listed are under no obligation to sell securities in Texas or Alabama. Moreover, the firms allegedly used fake pictures to lure investors into the crypto credit card scam. The authorities have given all the involved firms a 30-days grace period to respond to the cease and desist order.

CityUptake and Community Take on Telegram Scammer as Ecosystem Shows its Mettle

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Scams, Ponzi schemes, and exits are a persistent crypto problem that often leaves victims angry but without recourse. Occasionally, a group effort on the part of the cooperating parties will strike back at the scammer and get back what was lost.

The origin of the scam

Telegram is a haven of activity for tokens on the TRON network and deals are often made between trusted parties. While tools have been built to conduct trustless trades, some still prefer to simply send and receive their own wallets. Unfortunately, this may result in scammers assuming usernames that resemble trusted users. One such incident occurred a few weeks back when a scammer impersonated a CityUptake official and had almost 40,000 CITY Alphatokens (~$1,100 USD). Subsequently, the assets were later recovered through a well laid-out plan by company officials and cooperation from a valuable community.

According to CityUptake, it took more than 24 hours and the efforts of four separate people to recover the stolen funds. The issue began when Michael, the CityUptake user, was approached by a scammer who impersonated Rob’s name, an actual CityUptake agent. Michael, being unaware of the deception and the change in the username, forwarded his requirements to the ‘agent.’ Michael was actually wanting to sell some of his CITY Alpha tokens in return for the corresponding amount of TRX tokens.

Retrieving the Funds

The CityUptake Alpha tokens are valuable in the CU community because of its relevance to the changing price climate. The Alpha tokens allow the holder to receive passive gains from a USD-based trade desk which provides a stable platform for dealing with crypto assets.  It was only after the transfer that Michael realized that he was taken for a ride by the scammer. 

Once Michael reported the scam to the CityUptake fold, the company jumped right on board to help recover the funds. Since the scammer’s wallet address was known, it was only logical to track it for any suspicious transfers pertaining to the stolen amount. The wallet was doubly verified when the wallet holder posted a sell order for 40,000 CITY Alpha(the exact amount that was stolen). Following this, the team proceeded with executing a plan to recover the funds. 

The first step was to contact IAmGroot, the administrator for the TRON Collectors trade channel. Once he was filled in with what had occurred, IAmGroot and Micaletol worked together to set up a simulated trade to reel in the scammer. During the trade it was spotted that the scammer’s wallet had moved 10,000 CITY Alpha tokens plus an additional 30,000 CITY Alpha tokens to the address TDQTg5Qx37djroUTBN1reZ5b2vF4Ywe7ae. IAmGroot and Michael scoured through the blockchain to find more pseudonyms used by the scammer and discovered that the wallet in question had conducted similar transactions earlier. 

Once the trade simulation was completed, IAmGroot and Micaleto were successfully able to retrieve the funds and call the scammer out on a public forum. Michael even stated:

“Today is a great day and also a big surprise !!! Last week I was scammed over 40k city and today MicaLETO, Groot4Rocket hangel72 and rudytwo bring it back in a fantastic cooperation and unbelievable collaboration. Big THANKS to this honorable and honest guys, who make that success against scam possible!!!!I’m proud and happy to be a member of CityUptake and TRONCollector under such super together working people!! who fight against this fki.. scammers with great success.”

Such a collective effort is something that sets the CityUptake community apart from the rest of its compatriots. This cohesion and spirit of working together are just one of several factors that make CityUptake and its ecosystem a tight–knit community.

Youtube Refutes Ripple Inc Claims of Perpetrating Cryptocurrency Scams

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Youtube video sharing platform was under pressure from a lawsuit filed by Ripple in April 2020 blaming it for supporting crypto scams. Youtube responded to the April lawsuit citing the site failed to stop XRP scammers and impersonators from doing so.

According to today ‘s report, Law 360, the legal team representing Youtube referred to Section 230 of the Communications Decency Act during a dismissal bid; claimed that the publisher was not liable for any information provided on the platform by a third party. In that case, Garlinghouse accused the video-sharing platform of benefiting crypto scammers from Paid Advertisements.YouTube said that it is not Youtube ‘s fault for cryptocurrency scammers using its platform

The lawyers argued that it was completely unwise to accuse the video publisher of content that it had not created. In addition, Youtube’s verification of the scam channels did not in any way change the fact that the channels were the product of third parties.

Since the video-sharing platform did not solicit, encourage or participate in third party video scams, Ripple had no reason to back the accusation.

Youtube Scams Include Identity Theft, Impersonation and Phishing

A Forbes post on Youtube scams indicated that much of the scamming on the platform involved phishing the credit card, promising traffic spikes, identity theft and impersonation. Ripple ‘s lawsuit provided Ripple Executive Brad Garlinghouse had been impersonated by at least 305 youtube channels.

The lawsuit argued how the fraudsters took over entirely unrelated but verified channels, modified the branding, content and layout to make it look more like a legitimate crypto-currency giveaway.

Cryptocurrency scammers on Youtube not only impersonated the CEO of Ripple but also a variety of key figures in the fintech industry, according to the lawsuit’s filings. With that they could scam hundreds of thousands of subscribers. Nevertheless, the legal team of Youtube argued that the right to publicity law protected the names, voices or images of individuals from being used for any commercial gain; without the owners’ prior permission.

Conclusion

Recently, a twitter hack staged the famous “ double your money”;  through twitter profiles of influential leaders such as Barack Obama, Elon Musk and Bill Gates. Social media platforms and blockchain projects are at the onset of a cyber criminal bubble, and most of them are taking initiative to protect users from fraud and identity theft.