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Israeli Citizen Accused of Stealing Over $1.7 Million in Crypto

A Tel Aviv resident has been arrested and accused of international phishing fraud, using a collection of websites to steal cryptocurrencies.

Eliyahu Gigi, a 31-year-old from Tel Aviv, has been charged with stealing over $1.7 billion in a variety of cryptocurrencies. Gigi allegedly stole BTC, Ethereum, and Dash from users in the Netherlands, Belgium, and Germany. 

Lawyer Yeela Harel of the cyber department in the State Attorney’s Office filed charges against Gigi on July 17, according to a report published the same day by Globes. Gigi has reportedly been charged with crimes including theft, fraud, and money laundering, among others.

According to the report, Harel’s indictment claims that Gigi set up a network of scam websites to steal crypto through the use of malware. He is accused of using a number of methods to cover his tracks, including employing remote servers and shuffling the stolen funds around through different wallets. 

Gigi and his brother, a demobilized soldier, were reportedly arrested in June. The pair were suspected of being involved in international phishing fraud, but Harel moved to indict only Gigi.

The police apparently first began to look into Gigi when they received information suggesting that he was dropping scam links on digital wallet forums. According to the report, Gigi would link to a website that appeared to have a downloadable wallet manager. However, Gigi appeared to have collected and misappropriated users’ account credentials to steal their crypto.

As previously reported by Cointelegraph, an employee at Microsoft was recently arrested on suspicion of stealing $10 million in crypto. Volodymyr Kvashuk allegedly stole and flipped crypto gift cards for Microsoft products, selling them for a profit to customers over the Internet.

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Belgium’s Financial Watchdog Updates Crypto-Related Blacklist to Total of 120 Websites

Belgium’s Financial Services and Markets Authority updated its crypto-related fraud blacklist to total of 120 websites.

Belgium’s Financial Services and Markets Authority (FSMA) has updated a blacklist of crypto-related websites associated with fraud, according to an official statement on April 4.

Following a previous crypto-related scam blacklist update in December 2018, the FSMA has added seven new crypto trading platforms where it has found signs of fraud.

The blacklist now includes a total of 120 websites.

In the statement, the financial authority noted that it continued to receive new complaints of consumers who invested in cryptocurrencies on those trading platforms, adding that crypto fraud is still taking place in Belgium.

Similar to the previous update, the FSMA wrote that the list of crypto-related websites is based solely on the findings of the authority, in particular as a result of user reports. The regulator warned that the blacklist does not include all the companies that might be operating illegally in Belgium in the crypto industry.

Last year, Belgian financial authority FPS Economy (FPS) launched a website to raise awareness of the risks associated with crypto investment. According to the FPS, Belgian investors reported losses of about $2.5 million in crypto scams in 2017, which is evaluated to account for only four percent of overall crypto fraud cases, with the total losses estimated to amount to $152 million.

Yesterday, the European Union launched the International Association of Trusted Blockchain Applications (INATBA) in Brussels, Belgium. The new blockchain alliance’s charter was signed by more than 100 members including global tech giant IBM, Accenture and Deutsche Telekom, as well as blockchain-related firms such as Ripple, Iota and ConsenSys.

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Belgian Government Issues Cryptocurrency Fraud Warning

Belgium’s top financial regulator has issued a new warning about cryptocurrency scams.

The Financial Services and Market Authority (FSMA) declared that “cryptocurrencies are the hype of the year” in an announcement published on Monday. The FSMA is a public institution that supervises the Belgian financial sector alongside the National Bank of Belgium (NBB).

The regulator said in its missive that would-be investors should beware of would-be fraudsters who are peddling the idea of big profits through crypto-sales that ultimately prove to be fictitious.

The FSMA wrote:

“Fraudsters are well aware of that, and try to attract customers online through fake cryptocurrencies and huge profits. The only thing they actually do, however, is take the customers’ money and disappear. It is as simple as that.”

Officials added a list of 28 trading platforms that they have said are fraudulent in nature, and the agency said that it issued the update “based solely on the findings of the FSMA, in particular as a result of consumers’ reports.”

In February, FSMA issued its first warning on crypto scams, contending that people who trust suspicious-looking websites with their money “never recover the funds invested” or “simply have heard nothing further from the company with which they invested their money.”

Magic trick image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Report: Belgian Think Tank Calls for Crypto Exchange and ICO Regulations at EU Level

A report from a Belgian think tank that will reportedly be distributed to European Union (E.U.) ministers calls for unified legislation on cryptocurrencies and more scrutiny on how they are distributed to investors, Reuters reported September 5.

The report, ostensibly released by Brussels-based think tank Bruegel, comes ahead of an informal meeting of economic and financial affairs ministers from the E.U. on cryptocurrency investments and taxation of the digital economy. The meeting will take place in Austria from September 7-8.

According to Reuters, the report urges the regulation of cryptocurrency exchanges and Initial Coin Offerings (ICOs) at the E.U. level in order to manage associated risks and harness the potential of blockchain technology.

At the same time, Bruegel reportedly notes that the virtual nature of cryptocurrencies limits the development of regulations, while entities operating crypto trading platforms could face stricter disclosure rules, or even a potential ban.

Drawing on global experience, Bruegel notes the Chinese approach to cryptocurrency market regulation, suggesting “as done in China, mining farms can be forbidden.”

The report added that there may be a “scope for regulatory arbitrage” following the crackdown on crypto business in Asia, citing the upcoming move of crypto exchange Binance to the island state of Malta.

Bruegel notes that regulators should tolerate crypto exchanges that move in order to seek jurisdictions with more laissez faire regulations, stating that there is a need “to experiment and learn about the best approaches to this fast-developing technology.”

On August 30, Bloomberg reported that E.U. ministers plan to discuss the challenges posed by digital assets and the possibility of tightening regulations at the upcoming meeting.  Per a draft note seen by Bloomberg, participants will also discuss a general lack of transparency in the industry and the potential for cryptocurrencies to be used for tax evasion, terrorist financing and money laundering.

Earlier today, Cointelegraph reported that members of the European Parliament along with blockchain experts held a meeting entitled “Regulating ICOs — Is the Crowdfunding Proposal what we were looking for?” on Tuesday to discuss possible regulations for ICOs. The attendees examined potential complications currently arising in the ICO industry.

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Belgium's Financial Watchdog Adds 28 Sites to Crypto Scam Blacklist

Belgium’s Financial Services and Markets Authority (FSMA) has added 28 new sites to its crypto-related fraud blacklist, as it reiterates its warnings to consumers in a fresh alert posted today, September 4.

The FSMA has said that despite its prior risk alerts, the agency continues to receive complaints from consumers swindled by fraudsters capitalizing on the cryptocurrency “hype.” The warning says that scammers are canny enough to lure victims in with easy-seeming profits, but that at this point, “the only thing they actually do […] is take the customers’ money and disappear. It is as simple as that.”

The agency notes that the updated list is not comprehensive, and has been assembled largely as the result of victims’ reports. The warning appeals to the public to come forth with further information about any other crypto-related entities operating unlawfully in Belgium. It also invites readers to consult its prior warning from February 2018, which includes a testimony from one victim of a fraudulent crypto platform that the agency describes as “particularly detailed and telling.”

The FSMA’s efforts to educate investors about the risks associated with cryptocurrency fraud have been preempted by other national regulators and financial security experts.

In May, a government-led study in China outlined what it considered to be the key features of fraudulent digital currency profiles.

And in the U.S., the Securities and Exchange Commission (SEC) created a website for a fake Initial Coin Offerings (ICO) with a similar educational goal. The mock HoweyCoins.com lured investors with a “too good to be true investment opportunity” — using the very “red flags” the organization claimed to be present in the majority of fraudulent ICOs — and redirected those who attempted to purchase the ersatz tokens to an educationally-oriented page on the SEC’s own site.

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Belgian Gov’t Launches Website to Warn Public About Crypto Scams, Risks

Belgian authorities have launched a website to raise awareness of the risks associated with investments in crypto, the FPS Economy (FPS) announced in a public statement June 5.

The FPS noted the sharp spike in interest towards crypto investments, which they said “causes a lot more people to be scammed.” According to the statement, Belgian investors reported the loss of €2.2 mln ($2.5 mln) in crypto scams to the FPS last year. The FPS said that this is “just the tip of the iceberg” as only 4 percent of crypto fraud cases are reported. Per their estimations, investors in Belgium lose about €130 mln ($152 mln) to scam crypto projects per year.

The website “Too Good to Be True” from FPS Economy and the Federal Services and Markets Authority (FSMA) warns the public about crypto investment risks, stressing that crypto fraudsters usually “promise big profits,” and “often seem reliable.” The website encourages potential crypto investors to carefully check the details of the projects before investing as well as to be “cautious when paying online with cryptocurrencies.”

The website offers a portal with which users can report instances of scammy companies, in addition to a scanner that screens websites for complaints of fraud.

The site claims that “the absence of [a] warning about a company” after checking does not necessarily mean that the crypto project has a “valid license,” and that it may require further consideration. The site says that companies will sometimes change their names in order to avoid appearing on lists of fraudulent or scammy projects.

Last month, the office of Investor Education and Advocacy at the US Securities and Exchange Commission (SEC) launched a fake initial coin offering (ICO) website to increase awareness of the typical warning signs of scam ICOs and to promote investor education. The website of so-called “HowieCoins” included archetypical details of a scam ICO, including a misleading and blurry white paper, guaranteed returns claims, and celebrity endorsements.

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Belgian Government Launches Site to Warn Crypto Investors About Scams

Belgium’s government is backing a website that seeks to warn cryptocurrency investors about the signs of potential fraud.

The new site, entitled “Too Good to Be True,” is run in part by the Belgian Federal Public Service Economy and the Financial Services and Markets Authority. Saying crypto assets “are the hype of the year,” the site warns that because they are extremely easy to develop, these tokens may be used for illegitimate purposes, including “scams, drug trafficking, terrorism or any other criminal activity.”

As such, the site advises that anyone considering funding a token sale should research the people behind a project, avoid sharing any personal information, ask for clear information about the project and be careful if a project promises large returns.

Crypto scammers “often seem reliable,” according to the site, but they can still dupe would-be investors.

It explained:

“Collision with crypto coins can take different forms. Scammers try to trap consumers in different ways. Be extra cautious when paying online with cryptocurrencies, when investing in sports betting with crypto coins and with platforms for investments in crypto coins.”

Further, the site includes a website checker on the home page. The site claims to be able to determine if a website is fraudulent, though it notes that the developers “are not responsible for any errors in the system.”

The checker service adds that organizations must have a license to operate in the Belgian financial markets. Some sites may not show up despite lacking a license, though, and part of the site’s database will be populated by user-reported websites.

Editor’s Note: Statements in this article have been translated from Dutch. 

Belgium image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Belgium Contributes To World Food Programme Blockchain Project

The government of Belgium is making a contribution of €2 mln to promote a Blockchain project by the World Food Programme (WFP), the WFP announced April 19.

The contribution will reportedly allow the United Nations (UN) to use Blockchain technology to fight against hunger in impoverished areas. The “Building Blocks” project is piloted with other agencies in the UN and has been implemented to make WFP cash transfers to refugees more efficient and transparent. Over 100,000 Syrian refugees in camps in Jordan have benefited from the project, using donations provided by donors to get food and other crucial resources.

The project was presented at the Leveraging Innovation for Humanitarian Action in New York. Commenting on Belgium’s contribution to the initiative, the country’s Deputy Prime Minister and Minister for Development Cooperation, Alexander De Croo, said:

“Innovation saves lives. This year, more than 128 mln people across the world will need humanitarian assistance and protection. This is triple the number of three years ago. Only by finding better ways to deliver aid more efficiently will we close the gap between requirements and aid delivery on the ground. Belgium lauds the efforts of WFP to come up with innovative solutions to save more lives and help more people in need.”

In May last year, the UN announced its plans to use Ethereum Blockchain technology to ensure refugees in Jordan have access to food rations by distributing coupons which would be used in place of the local currency. The technology had already been tested by the WFP in Pakistan with more than 10,000 people having benefited.

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Bitfinex in Poland: Were There Money Laundering Links?

On April 7 reports started emerging from Poland that Polish prosecutors seized €400 mln from an account that was allegedly linked to one of the biggest exchanges globally, Bitfinex.

While links to the crypto exchange existed, they were tenuous at best, and involved a long string of players that apparently led back to Bitfinex. From the Belgian Ministry of Foreign Affairs to an embassy in the Democratic Republic of Congo, links to Colombian cocaine cartels and a Panama registered company; it all sounded like the makings of a James Bond movie.

Bitfinex came out and vehemently denied the allegations and refused to comment further, indicating the matter was closed. But just how deep do these allegations lie? Is there any hard evidence, or is it all conjecture and circumstantial?

Going down the rabbit hole

The story goes that the €400 mln seized at the Cooperative Bank in Skierniewice, Poland, was tied to the exchange Bitfinex. The reason that the funds were seized is that they were tied to the defrauding of €400,000 from the Belgian Ministry of Foreign Affairs during the construction of its embassy in the Democratic Republic of Congo.

  • The funds were seized out of two accounts from the bank, one registered in the vicinity of Pruszków and owned by someone of Canadian-Panamanian descent. The second account was allegedly presided over by a man with Colombian and Panamanian citizenships, and is the one with alleged ties to Bitfinex.
  • A slew of documents posted online supposedly tie Bitfinex to this account in a long line of links. Some of the documents show Bitfinex directing its customers to an account at the bank.
  • A Bitfinex user claimed he was interrogated by Police because of a case involving Crypto sp z o.o, as he received a payment from them via Bitfinex.
  • Crypto sp z o.o (and parent company Crypto Capital Corp.), registered in Panama, was reported to have dealings with narcotics trafficking networks, which led police to believe that the criminals were using crypto to launder fiat.

With all this coming to light, the alleged connections supposedly show that Bitfinex had ties with the bank where money was seized by Polish police as it pointed users in its direction back in 2017.

With that in mind, the connection between that account and Crypto sp z o.o is relatively weak, as it’s based on the fact that Crypto sp z o.o is a Panamanian company, and the account is owned by a Canadian-Panamanian.

Furthermore, the link apparently relies on the word of one interrogated witness who said that Crypto sp z o.o paid him using Bitfinex, the biggest Bitcoin exchange globally.

Tenuous links

While Polish police are unwinding a tale of drug trafficking and money laundering, the connections of those activities to Bittinex are tenuous at best.

Simply linking Bitfinex to Cooperative Bank in Skierniewice is possible, but far from easy with a number of points where the entire process can fall down. A piece by Trustnodes, published in November last year, goes to great lengths to tie Bitfinex to the Polish Bank, registered in Panama.

However, even with small links holding Bitfinex in proximity to where the illegal activity is allegedly taking place, the evidence tying them to the seized funds are circumstantial at best.

The allegations are trying to tie the exchange to active and substantial criminal claims, such as drug trafficking through Columbia, fraud in regards to money laundering, which is why the funds were seized, yet, Bitfinex’ only real tie that could be proven is based on the word of one person questioned.

Full denial

Despite the conspiracy theory nature of the allegations raised, Bitfinex came out two days later with a statement to certain media outlets denying all claims of any wrongdoing related to drug trafficking and money laundering.

Cointelegraph reached out to Bitfinex on the matter but received no comment at time of publication. Their official response read:

“Bitfinex can confirm that it is aware of the current allegations that have been reported by Polish media over the past several hours. Bitfinex believes that these allegations are untrue and Bitfinex customers and operations are unaffected by false rumors. Bitfinex is proud to be the world’s leading crypto exchange, and in this capacity works tirelessly to remain in strict compliance with authorities and regulators worldwide.”

Bitfinex has found it hard in the past to distance themselves from allegations and other controversies. On January 30, Bitfinex received a subpoena from the SEC, along with sister company, Tether, as questions continue to arise of its true value.

However, even these controversies seem to be a little harsh towards both companies. The SEC, an organisation that operates only within the borders of the US, sent their subpoenas to two companies that are not from, or based, the USA.

Although it is not totally unheard of for foreign companies to be approached by the SEC, with Telegram contacting the SEC regarding its ICO, it still points towards how Bitfinex seems to garner a lot of attention for the negative reasons.

Easy target

As it stands, neither Tether nor Bitfinex have been convincingly tied to any wrongdoings, despite a number of investigations and allegations being presented to them. As the biggest exchange globally, it is not so surprising that they are an easy target in an ecosystem that is rife with dodgy dealing.

In summarizing the situation, CEO of Altmarket, Bryce Weiner maybe said it best:

Just like there is a link between criminal activities and Bitcoin, there could be instances of criminal activities being linked to Bitcoin exchanges. That is not to say that exchanges are directly partaking in the criminal activities, just like Bitcoin is not to be directly blamed for people buying drugs.

As it stands, Bitfinex cannot be held accountable for the allegations leveled at it. If criminals have used their service to illicit illegal activities, then that is a different situation, and not a criminal one that can be aimed at the exchange.

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Japan’s IT Giant Fujitsu Opens International ‘Blockchain Innovation Center’ In Belgium

The leading Japanese information and communication technology (ICT) firm Fujitsu recently announced the opening of its international Blockchain Innovation Center in Brussels, Belgium to explore the technology’s potential applications in all possible areas, according to a  press release published March 21.

In its official statement, Fujitsu claimed that the new center will research and develop Blockchain-based solutions in “sectors of all kinds”, from Distributed Ledger Technology (DLT)-based audits to Blockchain-based voting.

Yves de Beauregard, head of Fujitsu Benelux (Belgium Netherlands Luxembourg), noted growing interest to Blockchain technology among customers and claimed that many DLT-based applications are still unexplored.

“This is just the beginning, as we intend to explore the wider potential use of blockchain in a variety of commercial areas,” Beauregard said.

According to the company’s press release, Brussels was chosen as the location of the Blockchain Center for its “geographical, political, technological and linguistic advantages for international organizations that are considering applications of blockchain technology.”

Previously Cointelegraph reported that Japanese Blockchain and cryptocurrency firm Tech Bureau offered its private Blockchain to Belgian company Digipolis, an organization for inter-municipal ICT services for Belgian cities Ghent and Antwerp, as part of “The Blockchain Lab” to provide more efficient administrative framework for cities.