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SEC Charges Three Persons in Digital Asset Frauds of Over $11 Million

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The US Securities and Exchange Commission [SEC] has charged three individuals on the 1st of February with defrauding hundreds of retail investors of $11.4 million via the 2018 B2G token offering advocated by Hollywood actor Steven Seagal.

The accused were involved with the now-defunct crypto projects called Bitcoiin2Gen which was the 2018 initial coin offering for the Steven Seagal-promoted altcoin and Start Options.

Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit was quoted saying,

“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”

According to SEC’s complaint, Kristijan Krstic, the founder of Start Options and Bitcoiin2Gen, and John DeMarr, the primary U.S.-based promoter for these firms, fraudulently persuaded the investors to purchase digital asset securities from approximately December 2017 through May 2018.

The US watchdogs further alleged that Krstic and DeMarr also claimed Start Options’ purported digital asset mining and trading platform from December 2017 through late January 2018.

The SEC further noted that the two individuals in question allegedly went on to assert that that Start Options was “the largest Bitcoin exchange in euro volume and liquidity” among other claims and also promoted Bitcoiin2Gen’s unregistered initial coin offering [ICO] of digital asset securities known as B2G tokens.

The third individual in the SEC’s complaint was Robin Enos who worked with DeMarr and was accused of drafting sham promotional materials that Enos had known would be circulated to the investors. It further noted that the fraudulent materials included several fake statements including that the B2G tokens would be deliverable on the Ethereum blockchain, that the invested funds would be utilized to develop a cryptocurrency that was “mineable,” and that the tokens would be tradeable on a proprietary digital asset trading platform at the platform’s supposed ‘launch’ in early April 2018.

“In reality, the complaint alleges, these claims about the B2G tokens were false, Bitcoiin2Gen was a sham, and Krstic and DeMarr allegedly misappropriated millions of dollars of investor funds for their own personal benefit.”

UK’s FCA Claims Fintech Firm Lanistar Has Not Received Regulatory Sanction, Company Responds

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The rapid growth of the fintech industry has grabbed the attention of financial regulators all over the planet with the discussion around privacy taking priority. Europe is one of the few regions where the financial ecosystem has been taken over by digital innovation with some players trying to fly under the regulatory radar.

On Wednesday, the United Kingdom Financial Services Authority issued a warning to fintech company Lanistar for launching services without the body’s approval. The FCA stated that organizations will not be allowed to run investment scams under the pretense of nascent technologies.

Lanistar had recently made waves in the fintech space when several digital influencers posted about the fintech firm’s product on their social media handles. Some of these ‘celebrities’ even posted the new Lanistar digital card promo without clearly stating that it was an advertisement. As soon as the FCA got wind of the product, the government watchdog issued the aforementioned notice.

According to the FCA statement:

“ This firm [Lanistar] is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation. [S]ome firms act without our authorisation and some knowingly run investment scams”.

Lanistar claims to help customers better manage their facilities using their native polymorphic technology and an open banking system. The firm had earlier released statements citing FCA approval which seems to have come under fire after the latest warning. FCA officials have taken a stand that the services do not come under any audit conducted by them.

Founded by entrepreneur Gurhan Kiziloz, Lanistar has made its voice clear during the controversy. Lanistar said that they were aware of the notice and insisted that all of the company’s workings came under the legal prerogative. As of now, the company is set to contact the FCA and provide a clear answer to its user base.

Report: North Korea Hacking Group Targeting Government COVID-19 Stimulus Checks

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Popular North Korea hacking group, Lazarus Group, is preparing to launch a massive cyberattack this weekend. According to a report by the Internet security company Cyfirma, the infamous North Korean hacking group, the attack will take place after the government distributes the COVID-19 stimulus checks.

The notorious hacking syndicate may target Americans who are recipients of government stimulus checks, and all the recipients of stimulus checks worldwide. The group has planned a phishing strategy according to the report, targeting some specific 5 million individuals and companies, bridging across the United States, UK, Japan , India, Singapore and South Korea.

North Korea hacking group plans to impersonate government officials

The internet security firm anticipates the group to launch the attack this weekend for two days, impacting small, medium, and large businesses, on top of individual people. The plan is to lure these individuals by mimicking a government official, or the governing body in the victim’s country.

According to Cryfirma, if the individuals fall for the trap, they may then disclose information that the North Korea hacking group can use to access vital accounts. The report reads: 

“The hacking campaign involved using phishing emails under the guise of local authorities in charge of dispensing government-funded Covid-19 support initiatives. These phishing emails are designed to drive recipients to fake websites where they will be deceived into divulging personal and financial information.”

Massive phishing strategy

Every nation included in the report is undertaking some stimulus, either for businesses, its citizens, or even both of them. All the strategies outlined by Cryfirma in the report involve luring the victims by extra payouts, to squeeze out more private information, maybe to sell on the dark web.

Furthermore, the internet security firm has highlighted some emails that are likely to be used in the phishing plan. Cryfirma has identified the following emails as impersonator accounts:

[email protected];

[email protected];

[email protected]; 

[email protected]; 

[email protected]; 

[email protected]

Austrian Government Funds QualiSig, a Blockchain Project to Create the Covid-19 App Prototypes

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Criminals worldwide are using the Covid-19 pandemic to scam unsuspecting people. Anti-scam campaigns are being promoted by authorities and governments and people have been advised to be alert and report any suspicious cases. The Austrian government, meanwhile, is taking a different approach to dealing with fake news, health data, and fraud prevention. The Government has granted $67,600 to an initiative called QualiSig through the Federal Ministry for Digital and Economic Affairs. The initiative will exploit aspects of Austria’s digital identity system to design three prototypes of COVID-19 apps. These three prototypes will enable the government to curb fraud and scams.

Fraud Prevention During Pandemics

 

Fraud Goes Viral, according to a Forbes article; a UK-based association for fraud prevention warned individuals of a growing amount of schemes where criminals are taking advantage of the pandemic. The article mentioned phone calls, the internet, text messages, and direct door-to-door visits as some of the means fraudsters use to get data, cash or initiate identity theft.

Therefore, QualiSig will study all these approaches and attempt to design a system that will perform identity verification ensuring that Covid-19 door-to-door testers will not fall prey to fraudsters. The initiative has already begun, and three application prototypes are being tested.

The prototypes will, in fact, request that testing agents display a unique QR code.Using a mobile application, a person being tested scans the QR code and the application directs them to a page for verification. The verification page reveals the tester ‘s identity and highlights their responsibilities. The page will also reveal a public authority digital signature and maybe some more signatures from a government health agency or the Red Cross.

That being said, the applications will only be live after eight months. Alexander Pfeiffer, one of the developers says; app applications are boundless and not limited to the Covid-19 cause alone.

Beware of Fake Decryption Tool Exploiting Desperate Ransomware  Victims

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Cyber criminals can be really annoying. This time round hackers have created malware in the shape of a decryption software that helps ransomware attack victims by encryption. The fake decryption tool will actually double encrypt your compromised files, not knowing you ‘re jumping from the frying pan to the actual fire.

A recent report by information security and technology news publication, Bleeping Computers, fake ransomware decryption software by STOP Djvu Ransomware, double-encrypts files that create a much bigger victim problem. According to the report, it lures already desperate victims with the guarantee of a free malware decryption tool, infecting them with another ransomware instead.

The malware dubbed “Zorab” was uncovered by the creator of ID Ransomware, Michael Gillespie. There are existing decryption tools that don’t charge huge amounts of money to decrypt files, exactly what the fake decryption tool is trying to do. The malware promises to decrypt files at no cost, but it eventually encrypts them multiple times.

 

Ransomware operatives such as REvil, Netwalker, DoppelPaymer and Maze are popular due to their high profile victims and attracting huge ransoms. Now there is another ransomware, STOP Djvu, which is already infecting more victims than the aforementioned popular operatives combined together on a daily basis.

How the fake decryption tool works

When a victim downloads the fake decryption tool and starts scanning his computer system by clicking the ‘start scan’ button, the ransomware draws out an executable file dubbed crab.exe; this is the zorab malware itself. Once this file is deployed, the fake decryption software double encrypts the entire files in the system with a .ZRB extension.

Fake Decryption Tool

Additionally, the ransomware creates ransom notes in every encrypted folder labeled ‘–DECRYPT–ZORAB.txt.ZRB.’ Inside the notes, there are details on how to reach the ransomware attackers to pay the ransom. The creation of a fake decryption tool was a clever idea to easily and quickly spread malware. Indeed, the Bleep Computer’s report described STOP Djvu Ransomware as “the most actively distributed ransomware over the past year.

FBI Warns Rising Cryptocurrency Scams During COVID-19 Pandemic

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The coronavirus pandemic tends to bring out the best of so many people as individuals, governments, and companies come together to fight COVID-19. And there are the cybercriminals taking advantage of paranoia and the need for information to spread malware and defraud victims.

As cybercriminals continue to exploit the COVID 19 pandemic, the FBI is advising that people be alerted to a spike in COVID-19 related cryptocurrency fraud schemes. The widespread acceptance of cryptocurrency by business and its growing popularity have contributed to the spike in crypto scams. In a warning published on its website said :

“Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystem”

According to the FBI, people should be watchful about cryptocurrency fraud schemes such as blackmail attempts, work from home, paying for non-existent treatments or equipment, investment scams.

With the current COVID-19 situation, traditional methods of blackmail are coming with a twist. The scammer may threaten you to release your personal information or secrets and infect you and/or your family with coronavirus unless payment is sent to the Bitcoin wallet.

The FBI warns about the Money Mule Scheme in work from home scams, where criminals trick their victims into illicit money laundering by asking them to send donations or receive money on behalf of someone who pretends to be in need.

Scammers may try to sell online products claiming to prevent COVID-19 and accept payment in cryptocurrencies for products that do not actually exist. Many of the COVID-19 scams are attempts by corporations and individuals to sell goods that they say to prevent or cure the novel coronavirus that has already killed more than 100,00 people all over the world.

To Stop Scams Involving Cryptocurrency

The FBI advises

  • Verify that a vendor/charity is legitimate and accepts cryptocurrency before sending payments/donations.
  • Conduct extensive research on potential investment opportunities.
  • Do not use your personal bank accounts for work-from-home business-related activity or provide your bank account information to someone who is not named on the account.
  • Contact law enforcement before paying out blackmail and/or extortion attempts and before converting your money into cryptocurrency to pay them.

 

Since the end of February, phishing emails have increased by more than 600 percent as cybercriminals try to capitalize on the fear and confusion caused by the COVID-19 pandemic, according to reports.

The confusion, diversion and, weakness that results from crises spells space for criminals. Epidemic coronavirus is no exception. When some of you are at home, practicing social distance and regular hand washing to stop the coronavirus, note that scammers are always busy trying to trick people.

It is the duty of the person to protect themselves and their loved ones from being scammed by staying alert and contact the law enforcement immediately if you think you have been a victim of a coronavirus scam.

Temasek Holdings CEO Hit By Fake Stories Linking Her To ‘Wealth Loophole’

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The world has seen a massive rise in cybercrime after the rapid development of technology and with that the internet. In today’s time, it has become very easy to run a scam on the internet and the latest victim of such an activity was Madam Ho Ching, the Chief Executive Officer [CEO] of Temasek Holdings. 

Recent reports showed that fake portals were issuing articles on their website that stated how Ho Ching made a lot of money using ‘financial loopholes’. 

Ho Ching is also the wife of the current Prime Minister of Singapore, Lee Hsien Loong. Her connection to the political leader is also seen as a reason for this defamation. The Monetary Authority of Singapore warned that websites were posing as legitimate portals to publish fake news.

One website posed as The Strait Times and published a piece that claimed: “Ching’s latest investment has experts in awe and big banks terrified”. While there was no mention of any backing for the statement, the article continued to shed light on the fake news. The piece also added that Singaporean citizens were ranking in millions of dollars sitting at home because of the same wealth loophole.

The usage of Mdm Ching’s photo has also drawn her comments, blasting the portals for it. She stated that such practices were wrong and that people should not fall for it as she would never endorse such efforts. Her Facebook post back in November said:

“These fake articles talk about fantastical ways of making money from bitcoins and such like, and pretend there are loopholes for multiplying your money quickly.They sometimes use old pictures of me, and other fake news would use newer pictures of me, photoshopped in front various banks.Pls report to Facebook, WhatsApp, or whichever social media channel you have been seeing this.More importantly, don’t get scammed or conned into investing into this or that get rich schemes.”

The Monetary Authority of Singapore has been very serious when it comes to such malpractices because of its efforts to promote digital money. The body is also responsible for bringing in technological changes as blockchain technology and cryptocurrencies into the country.

This was not the first time that Singapore was hit with such a scam as other politicians had also been affected earlier. Last year, Senior Minister and Coordinating Minister for Social Policies Tharman Shanmugaratnam was also hit by such a scandal. He also serves as the Chairman of the Monetary Authority of MAS.

 

Source:CNA

Bitcoin Scammers Threatening to Shut Off Power of Toronto Hydro Customers

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Scammers these days are preferring bitcoin and other digital currencies to avoid traceability and 2019 witnessed several such cases. The most recent was reported by Toronto Hydro customers who reportedly received threatening phone calls, demanding Bitcoin payment to retain electricity.

Phone Scammers Are Demanding Bitcoin

As per the Canadian media outlet Narcity, few customers of the country’s biggest electric utilities centre, Toronto Hydro have been threatened by scam phone calls. Scammers are reportedly intimidating to cut the electricity supply of customers if they don’t pay them in Bitcoin. However, a spokesperson for Toronto Hydro said;

“Over the last couple of months, we have been reminding Toronto hydro customer to be aware of sophisticated scams that are targetting both businesses and residential customers,”

However, as part of Toronto Hydro, they don’t disconnect their power supply immediately and also warned their customers to stay away from handing over money to the scammers. They also said that they never accept bitcoin as payment which sounds that the scammers are misrepresenting themselves as representative of Toronto Hydro.

As per the firm, if at all customers experience electricity cut, it will be due to nonpayment issues. The spokesperson further elaborated it as follows;

“We will never disconnect power without first contacting customers through multiple channels,”

Moreover, such threatening or scamming phone calls often appears on rising volume during the holiday season and long weekends. The firm also shared a couple of guidelines for customers to protect themselves from possible fraud. However, if anyone wants to verify that the calls received are legitimate from the Toronto Hydro, they can do so by calling at 416-542-8000 and speak to a real representative.

Even though Bitcoin isn’t favouring the crypto market for quite long, it looks like scammers are fond of bitcoin and other virtual currencies. Notably, at the press time, the crowning cryptocurrency Bitcoin is trading at $7263 against USD. The currency is currently declined by 2.04 percent within the past 24Hrs and reportedly counts the market capitalization of $131,701,588,695.

Undeniably, this isn’t the new case in the crypto industry, the market has quite often expressed several cases like this. However, it is worth looking at the market condition in 2020.