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Alleged Bitcoin Fraudster Alexander Vinnik Appeals for Extradition to Russia

The former operator of now-shuttered crypto exchange BTC-e, Alexander Vinnik, has lodged an appeal with a Piraeus court for his release or extradition to Russia.

Former operator of now-shuttered crypto exchange BTC-e, Russian national Alexander Vinnik, has appealed with a Greek court for his release or extradition to Russia, local media outlet Kathimerini reported on March 21.

Vinnik — who is accused of fraud and laundering as much as $4 billion in Bitcoin (BTC) over the course of six years — has reportedly filed an appeal with Piraeus court for his release or extradition to Russia for humanitarian reasons.

Prior to that, Russia’s Commissioner for Human Rights Tatyana Moskalkova asked both the United Nations High Commissioner for Human Rights Michelle Bachelet and Greek Justice Minister Michalis Kalogirou to help extradite Vinnik to Russia. The petition was lodged in connection with Vinnik’s deteriorating health following a hunger strike he started last November.

At the time, Moskalkova stressed that Vinnik’s wife was seriously ill and is on the brink of death. The Commissioner said then:

“Given the extraordinary humanitarian situation, I would ask for help extraditing him [Vinnik] to Russia so that he could be closer to his family.”

Moskalkova also sent letters to the President of the International Committee of the Red Cross, Peter Maurer, the Greek Health Minister Andreas Xanthos, and the Greek Ombudsman, Andreas Pottakis, asking to provide Vinnik with medical assistance following the hunger strike.

Apart from Russia, French authorities also sought Vinnik’s extradition to France in regard to a further series of fraud allegations. France accused Vinnik of “defraud[ing] over 100 people in six French cities between 2016 and 2018.”

In late February, the Russian Supreme Court included the illicit use of cryptocurrencies in the list of criminal offences related to money laundering. The amendments were reportedly developed in order to comply with recommendations from the international Financial Action Task Force on Money Laundering.

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Texas: Crypto AriseBank CEO Pleads Guilty to Deceiving Investors in $4.2 Million Case

The U.S. Attorney for the Northern District of Texas reportedly described Jared Rice’s plea as one of the first of its kind.

The former CEO of reported cryptocurrency scam AriseBank has pleaded guilty to defrauding victims of over $4.2 million, Texas-based daily news outlet Dallas News reported March 21.

Jared Rice, whom the FBI arrested over securities and wire fraud in November last year, confessed to his activities, according to an announcement by the United States Attorney for the Northern District of Texas, Erin Nealy Cox. Rice had allegedly falsely claimed that AriseBank could offer customers “FDIC-insured accounts and traditional banking services, including Visa-brand credit and debit cards, in addition to cryptocurrency services.”

The announcement, seen by Dallas News, reportedly shows that Rice specifically entered a guilty plea for one count of securities fraud, implicating him in lying to investors of AriseBank while it operated.

As Cointelegraph reported, Rice initially faced a 120-year jail term for the combined counts, but sources now indicate the maximum term will be 20 years.

In total, AriseBank seized $4,250,000 from participants, which Rice may now have to repay in full. He will return to court for sentencing in July.

“Given the fairly recent emergence of cryptocurrency, Rice’s guilty plea is one of the first of its kind in the U.S.,” Dallas News references the Attorney’s office as adding.

In December of last year, both Rice and then-AriseBank COO Stanley Ford were also ordered by a U.S. federal court to pay around $2.7 million in fines to settle charges related to reportedly fraudulent initial coin offerings (ICO) operated by AriseBank.

The scheme had received notice it was no longer welcome in its home jurisdiction of Texas months prior to Rice’s arrest.

At the time, the Texas Banking Commissioner Charles G. Cooper sent a cease and desist order to AriseBank, arguing it did not have the required permission to offer banking services to residents.

The move closely followed a similar demand by Texas regulators sent to defunct cryptocurrency scheme BitConnect, which imploded shortly afterwards.

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Report: Malware Targets Israeli Fintech Firms Working in Crypto, Forex Trading

According to a cybersecurity company, Israeli fintech companies are being targeted by malware.

Israeli fintech companies that work with forex and crypto trading are being targeted by malware, according to a blog post from threat research department Unit 42 of cybersecurity company Palo Alto Networks published on March 19.

Per the report, Unit 42 first encountered an older version of the malware in question, Cardinal RAT, in 2017. Since April 2017, Cardinal RAT has been identified when examining attacks against two Israel-based fintech companies engaged in developing forex and crypto trading software. The software is a Remote Access Trojan (RAT), which allows the attacker to remotely take control of the system.

The updates applied to the malware aim to evade detection and hinder its analysis. After explaining the obfuscation techniques employed by the malware, the researchers explain that the payload itself does not vary significantly compared to the original in terms of modus operandi or capabilities.

The software collects victim data, updates its settings, acts as a reverse proxy, executes commands, and uninstalls itself. It then recovers passwords, downloads and executes files, logs keypresses, captures screenshots, updates itself and cleans cookies from browsers. Unit 42 notes that it witnessed attacks employing this malware targeting fintech firms that engaged in forex and crypto trading, primarily based in Israel.

The report further claims that the threat research team discovered a possible correlation between Cardinal RAT and a JavaScript-based malware dubbed EVILNUM, which is used in attacks against similar organizations. When looking at files submitted by the same customer in a similar timeframe to the Cardinal RAT samples, Unit 42 reportedly also identified EVILNUM instances.

The post further notes that also this malware seems to only be used in attacks against fintech organizations. When researching the data, the company claims to have found another case where an organization submitted both EVILNUM and Cardinal RAT on the same day, which is particularly noteworthy since both those malware families are rare.

EVILNUM is reportedly capable of setting up to become persistent on the system, running arbitrary commands, downloading additional files and taking screenshots.

As Cointelegraph recently reported, a Google Chrome browser extension tricking users into participating in a fake airdrop from cryptocurrency exchange Huobi claimed over 200 victims.

Also, a report noted last week that cybercriminals are reportedly favoring unhurried approaches in attacks made for financial gains, with cryptojacking as a prime example of this shift.

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Australia: Clients Take Crypto Fund Manager to Court, Cite $14.2 Million in Losses

Cryptocurrency fund manager Stefanos Papanastasiou is about to be brought to court by his clients over alleged losses.

The founder of what reportedly claims to be Australia’s first online mattress retailer OzMattress and cryptocurrency fund manager Stefanos Papanastasiou is about to be brought to court by his clients over the loss of over AUD$20 million ($14.2 million). Daily Australian newspaper The Age reported about the controversy on March 19.

Per the report, Papanastasiou told his clients in 2017 that he had spent half a million Australian dollars ($355,000) to develop an algorithm that delivers substantial returns through the trading of Bitcoin (BTC) and Ethereum (ETH)-based tokens. According to the claim filed by property developer Savvas Alexiadis, one of his clients, Papanastasiou owes him more than AUD$2.7 million (nearly $2 million).

The documents filed with the Supreme Court of Victoria state that Alexiadis transferred over AUD$2.1 million (nearly $1.5 million) into a Papanastasiou’s trading account. Furthermore, he reportedly also transferred an unspecified quantity of BTC into wallets managed by Papanastasiou.

The claim also cites messages allegedly sent by Papanastasiou:

“Sam, don’t get caught up in the details. Leave it to me. Let me know password login for ACX [trading account]. I’ll deal with whatever funds are in there … Eyes on the prize Sam. Understood? Got your back.”

Furthermore, the documents also claim that Papanastasiou asked Alexiadis to transfer AUD$40,000 (over $28,000) to his wife, AUD$35,000 (nearly $25,000) to his sister and $450,000 (almost $320,000) to a mattress supplier in Thomastown, promising to send an equivalent in crypto assets.

The Age notes that Papanastasiou and his wife, Shalini Ganapathy, defaulted on the purchase of a AUD$5.44 million house after December 2017, when Bitcoin had reached its $20,000 peak.

The website of Papanastasiou’s mattress retail business, OzMattress, is seemingly offline at press time. The claim also notes that Papanastasiou has repeatedly refused to provide an account of trading activity and did not comply with requests to repay the amounts asked by his clients.

In response to Alexadais’s claim to return the around $2 million, Papanastasiou reportedly said:

“The Supreme Court action is new to me and I intend to defend myself against his claim as he has been compensated in excess of $2.7m […] Sam [Alexadais] and his associates have a lot to answer for as the truth of events is vastly different and far more sinister.”

Also, Mark Thompson, a former Australian Football League coach accused of MDMA and methamphetamine trafficking in May last year, contributed over one million Australian dollars (about $709,000) to Papanastasiou’s fund as one of his clients.

As Cointelegraph reported, the Australian anti-money laundering watchdog has recently suspended the registrations of two cryptocurrency exchanges in connection with an unrelated drug trafficking case.

In other law enforcement and crypto news, a United States District Attorney also recently charged the founders of an international cryptocurrency pyramid scheme that involved the marketing of an allegedly fraudulent digital currency called “OneCoin.”

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New Report Warns 87 Percent of Cryptocurrency Exchange Volume Is Potentially Suspicious

A reports from trading analytics platform The Tie shows that the majority of exchanges may be faking their exchange volume.

Almost 90 percent of cryptocurrency exchanges’ reported trade volumes may be incorrect, new research from trading analytics platform The Tie warned in a digest released on March 18.

Reporting on figures gathered from 97 exchanges, researchers found that the vast majority of the volume claimed to come from users may not in fact exist.

The revelations came as a result of calculations of lesser-known exchanges versus well-known businesses such as Binance and Kraken.

“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie wrote in social media comments on the findings. The organization added:

“If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1 (billion) per day. Currently that number is being reported as $15.9 (billion).”

Exchanges have often fielded accusations of volume misreporting: a similar reported issued in March 2018 warned of similar problems with data from exchanges.

Then, as now, Binance CEO Changpeng Zhao (CZ) took industry participants to task, arguing listing resources such as CoinMarketCap added to the confusion.

“Why do exchanges fake volumes?” he queried on Twitter following The Tie’s report. CZ also wrote:

“(CoinMarketCap) is [the] highest traffic website in our space, and [the] biggest referrer for all exchanges. Ranked high on CMC has benefits for getting new users. BUT at the expense of DESTROYING CREDIBILITY with pro users.”

Zhang repeated similar claims about CoinMarketCap which appeared in December, focusing on the the top 25 Bitcoin (BTC) trading pairs.

Last month, meanwhile, Cointelegraph reported on how overall exchange volumes had dropped to their lowest levels since May 2017.

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BitGuards: Why the Crypto Elite Are Increasingly Relying on Personal Security

The crypto elite are hiring bodyguards, but that may change once the industry becomes more legitimate.

Security is paramount in crypto. “Keep your hardware wallets safe,” we’re told. “Keep your private keys safe.” “Keep your seed words safe.” “Keep your computer safe.” This list could go on almost indefinitely, and while you might be forgiven for assuming that it contained only objects of an electronic or cryptographic constitution, you’d be wrong. Because one of the most important links in this chain of security is your own self.

Yes, what good is a securely held private key if thieves force you at gunpoint to tell them what this key is? This might seem like an improbable risk for anyone with only modest savings in crypto, but for anyone with hundreds of thousands or even millions of dollars worth of Bitcoin in their wallets, it’s all too real. The kidnappings of Pavel Lerner and Skycoin’s “Synth” underline this point forcefully, so it’s no wonder that an increasing number of crypto millionaires and CEOs are choosing to enlist the services of personal bodyguards.

However, while it’s clear that a large number of “cryptonaires” currently make use of bodyguards, it’s likely that third-party solutions to personal security may soon emerge and make them less necessary. It’s also possible that the safety of high-profile figures will improve in parallel with an increase in regulations and the standardization of the industry, since, in some cases, it would seem that threats to security are associated with the questionable business practices of those threatened.

Being your own bank carries risks

Tadas Kasputis is one of the many cryptocurrency executives who now employs the services of personal bodyguards. For a while, the founder of CoinStruction and the ExMarkets crypto-exchange didn’t see any use for them, but he tells Cointelegraph that this changed in 2015, after he was kidnapped.

“Yes, actually I was kidnapped in my hometown Kaunas city in Lithuania,” he said. “They came out of nowhere, pushed me into a van and drove around town trying to get me to tell them my bitcoin wallet passwords. Their plan did not work and they’re now facing charges in Lithuanian court. That was the only time it happened, but it was enough.”

As a result of this incident, Kasputis states that he “decided to put extra security measures to protect me and my family,” although he didn’t specify the extent of the protection he now pays for (perhaps for security reasons). And he’s not alone in taking additional security measures, because even though most cryptocurrency executives are understandably sheepish when it comes to divulging specific details, there’s ample online record of such execs using bodyguards.

Most notably, Ethereum co-founder Anthony Di Iorio is one of these figures. While he didn’t reply to a request for comment, a Fortune interview from June describes him walking around Manhattan with a private bodyguard, while a November article from The Globe and Mail offers further detail, revealing that he employs seven full-time bodyguards.

“Being my own bank, there are consequences — I’m at risk,” he told the Canadian newspaper, offering a vivid indication of just how threatened some of the more conspicuous figures in the cryptocurrency industry feel.

A few of the biggest names in the industry have taken Di Iorio’s lead and publicly stated how many bodyguards they employ and in what specific capacity (i.e., whether full-time or not). Still, it’s known that Litecoin creator Charlie Lee, for example, has his own “head of security,” John Kim, who — in between acting as Lee’s personal bodyguard — also doubles as an “evangelist” for the altcoin. And as with Kasputis, there are many other lesser known crypto figures who have been known to use personal security, such as “the Dollar Vigilante” Jeff Berwick and the now-jailed Josh Garza (who was known to attend conferences with two bodyguards in tow).

Berwick explained to Cointelegraph:

“For my entire life I’ve deemed it my own duty to supply protection to myself and my family. For that reason, aside from being a trained fighter and often armed, I always utilize private security services in one way or another.  I would never, under any circumstance, leave my security up to a centrally planned, communist style, bureaucratic and slow, dog killing, kidnapping and extortion racket like government police.”

Admittedly, a list of five names doesn’t offer a very comprehensive window into just how many people in crypto actually walk around with hired muscle. That said, bodyguard firms have been reporting that they’re increasingly working for people in the industry, with a Bitcoin.com article from last year showing that this is especially true in Russia. Yet, this is also the case elsewhere in the world, with the United Kingdom-based Spetsnaz Security International, for instance, informing Cointelegraph that it does have clients in the crypto industry.

“I do provide bodyguard services for individuals who work in the cryptocurrency industry,” says director Fidel Matola, who, unfortunately, wouldn’t share the number of such individuals his agency works for. Nonetheless, there’s little doubt that a not- insignificant proportion of people in the industry do use personal security, even if some of the most notable members of the crypto elite still apparently don’t (e.g., Vitalik Buterin).

“Most people I know are anarcho-capitalist and therefore use private security regularly,” notes Berwick, who currently resides in an informal anarchist community in Acapulco and organizes the annual Anarchapulco event. Although he adds, “I haven’t particularly noticed an increase in this usage amongst people I know.”

Eastern Europe or the rest of world?

While it isn’t controversial to assert that crypto millionaires (or billionaires) do use bodyguards, there are a number of questions surrounding this phenomenon that aren’t so obvious. For one, it would be useful to know where in the world bodyguards are most widely used by members of the crypto elite. And while it’s tempting to suggest that the answer to this question is Russia and Eastern Europe, people who actually live in this region aren’t so sure. According to Kasputis:

“I don’t know the statistics and aren’t too concerned about them. Perhaps the cases are more common in Eastern Europe right now, but the cryptocurrency penetration and popularity in this region is also higher than, say, in South America, right? Maybe the geographical scope will change.”

Given that there aren’t any statistics on this subject, it’s very difficult to conclude anything with any certainty, particularly when Di Iorio is based in Canada, for example, when Berwick is based in Mexico, and Garza was based in the U.S.

And Berwick, for his part, believes that it’s not Eastern Europe that’s the most dangerous area in the world for cryptocurrency holders, but rather, the United States. Although, in his case, he regards the danger posed in the US in more general terms, and not restricted solely to Bitcoin or Ethereum holders who might be robbed at gunpoint:

“The most dangerous place in the world, in my opinion, is the US. Nearly everyone in the US gets extorted for half the money they make every year and are extorted on thousands of other items as well. When not being extorted they live in the world’s largest police state where most people at one point or another are kidnapped and thrown into rape camps [prisons]. I try to avoid going to the US for this reason.”

Despite Berwick’s impassioned testimony, it’s interesting to note that Lerner was kidnapped in Kiev, Kasputis was kidnapped in Lithuania, and that there have been numerous instances of people being robbed for crypto in Moscow over the past couple of years. There are, then, good reasons to suspect that bodyguards might be more common in Eastern Europe, even if the the rest of the crypto world (particularly in the Americas) probably also has its fair share.

Third-party protection

Cases of kidnap and robbery are highly disturbing for anyone with significant crypto holdings, and it might seem that the only response to such incidents is to turn to the nearest reliable personal security agency. But even if this may be a perfectly rational response right now, it’s possible that it might not be necessary in the near future. As Kasputis argues:

“I think soon enough there will be accessible solutions in the cryptocurrency space which will allow putting your holdings into trusted-third-party protection similar to what we have bank vaults right now. There are still many business opportunities out there, one, for example, being crypto wills and arrangements of the digital asset and private key transfers upon death. I am not the one to evaluate the QuadrigaCX controversy, but it is a good example of that.”

This might simply sound like speculation, but there is, in fact, a move toward “third-party protection” for cryptocurrencies in the security industry. Back in October, the London-based multinational security company G4S announced that it had launched a “vault storage” service for crypto. The corporation has copious experience protecting and storing money and high-value items, and it’s now using this experience to provide a service that breaks up a client’s cryptocurrency into “fragments,” which are then kept in a number of high-security vaults.

By “fragments,” G4S is presumably referring to private keys and/or seed words rather than cryptocurrencies themselves. Regardless, G4S Risk Consulting’s senior risk analyst, Dominic MacIver, noted at the time that this service isn’t being proposed merely as a bulwark against hacking, but also against physical robbery:

“Offline storage has become a more established and secure way of storing crypto-assets. At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of ‘vault storage’. Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within.”

And aside from G4S, there are signs that other companies are in a “race” to provide custodial services for cryptocurrencies, as CNBC put it in an article from September. Chief amongst these is BitGo, which, in that same month, received a license from the South Dakota Division of Banking to act as a custodian for the holdings of institutions and big investors. And they have since been joined by the likes of Gemini, ItBit and Coinbase Custody, indicating that you don’t necessarily need to store your holdings in your own wallet and hire a bodyguard in order to preserve your crypto-wealth.

The correlation between threats and fraudulence

One other thing that might, in the future, reduce the need for bodyguards is the regulation and standardization of the cryptocurrency industry. If the industry becomes more normalized, if all exchanges are required to be licensed and maintain standards of best practice, and if legislation brings crypto closer to the mainstream, then there may be at least a slight reduction in the threat posed to crypto execs. That’s because a number of cases of kidnapping and robbery appear to be related to exchanges that were potentially fraudulent.

For instance, in June 2018, Skycoin’s CEO, known as Synth, was robbed at his home in China. Nine individuals — apparently from the company’s marketing team — reportedly broke into his house, assaulted him and his girlfriend and stole 18.88 Bitcoin and 6,466 Skycoin (there is a police report that confirms parts of Synth’s story). What makes this more interesting is that Skycoin had been accused of being a scam by, among others, the Next Web and altcoins.com, largely because it was offering investors the chance to buy a miner in order to to mine a coin (Skycoin) that was, in fact, premined. There were also indications that insider trading was taking place within the company, and while these can’t be confirmed, the potential of there being a fraudulent environment is important here. That’s because, if Skycoin was fraudulent, this could have contributed to the feeling among potential kidnappers/robbers that they could steal Synth’s crypto with impunity, given that Synth may have been wary about exposing too much of his business to public scrutiny.

Similarly, in May 2018, two bodyguards working for MasBitcoin CEO Jorge Sanchez were gunned down in Cerritos, Mexico. In this case, it was widely accepted that MasBitcoin was a Ponzi scheme, which had closed in March 2018 after operating for around a year. Once again, it seems that the fraudulence of MasBitcoin had made this crime likelier, and given that Sanchez had promised to exact revenge in a bizarre video posted to Facebook, it’s possible that the murderers were people known to him. In other words, they were aware that MasBitcoin was a scam, and they were therefore more willing to regard Sanchez as fair game for an attack or robbery.

And then there’s Garza, who was the CEO of the GAW Miners Ponzi scheme and who also roamed around in the presence of bodyguards. It’s arguable that he wouldn’t have felt the need to do this if he had been running a legitimate business that wasn’t defrauding people of money. But the fact that he was scamming people out of money made him a target, and it’s possible that he was well aware of this.

Of course, this isn’t to say that many or most of the crypto execs with bodyguards are also running fraudulent or deceptive businesses. However, there is at least a moderate correlation between questionable business practices and the threat to personal security, so it’s likely that once crypto becomes more regulated, the need to enlist bodyguards will partially decline. And it will also decline when more security companies like G4S launch reliable storage and custodial solutions for crypto. But until then, the industry’s elite will need to continue looking out for their own personal safety, since they still remain the final line of defense between criminals and their crypto.

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Businesses Increasingly See Crypto Mining Attacks in Cloud Infrastructures

American telecoms firm AT&T said that businesses are more seeing crypto mining attacks despite the ongoing bear market.

Cryptocurrency mining is reportedly one of the most observed objectives of hackers attacking businesses’ cloud infrastructures, according to a report by AT&T Cybersecurity on March 14.

The cybersecurity wing of United States telecoms firm AT&T stated that organizations of all sizes continue to face major crypto mining attacks despite the ongoing bear market.

In the new report, AT&T examined the most significant forms of cryptojacking associated with mining attacks on organizations’ cloud infrastructure.

AT&T outlined four major cryptojacking tactics used by hackers such as compromising container management platforms, control panel exploitation, theft of application programming interfaces (APIs), as well as spreading malicious Docker images.

Container management is a major process deployed by enterprise systems, which includes all necessary components to run software, including files and libraries. AT&T researchers have found that crypto jackers were using unauthenticated management interfaces and opened APIs to compromise container management platforms for illicit cryptocurrency mining.

In this regard, AT&T cited an attack reported by security vendor RedLock, where an attacker compromised open-source container management system Kubernetes. The attackers used the compromised Kubernetes server in Amazon Web Services to mine Monero (XMR) and take over access to client data.

After providing a detailed description of hackers’ strategies to mine crypto through cloud structures, AT&T provided a number of recommendations for detecting mining attacks on cloud systems.

Recently, crypto mining service Coinhive announced its closure, as the platform has reportedly become economically inefficient. It reportedly had to shut down its services amidst a 50 percent decline in hash rate following the last Monero hard fork. The firm said its would halt operations on March 8, 2019, while users’ dashboards will be accessible until April 30, 2019.

Following the news, researchers from Canadian Concordia University reported that Coinhive script was placed on more than 30,000 websites, representing 92 percent of all websites based on JavaScript cryptocurrency mining scripts.

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Google Deletes Crypto Malware Targeting Blockchain.com, MyEtherWallet Users

The malicious Google Chrome web extension was tied to a fake token airdrop from cryptocurrency exchange Huobi.

A Google Chrome browser extension tricking users into participating in a fake airdrop from cryptocurrency exchange Huobi claimed over 200 victims, a security researcher reported in a blog post on March 14.

The extension for Chrome web browser, with the name NoCoin, gained 230 downloads before Google deleted it, according to Harry Denley, who runs cryptocurrency scam database EtherscamDB.

Denley noted that hackers had purposely disguised the malicious extension to look like a tool protecting users from cryptocurrency malware or so-called cryptojacking.

“From the start, it looked like it did what it should — it was detected [sic] various CryptoJacking scripts […] and there was a nice UI to let me know it was doing its job,” he explained in the blog post.

Behind the facade, however, it became apparent the extension requests the input of private keys from popular wallet interfaces MyEtherWallet (MEW) and Blockchain.com. Private keys are then sent to hackers, who can empty wallets of holdings.

The extension lay at the end of a fake giveaway campaign, ostensibly from crypto exchange Huobi, which offered worthless ERC20 Ethereum network-based tokens to unwitting consumers.

It is unknown how long the extension remained available for Google Chrome users.

As Cointelegraph continues to report, bad actors targeting cryptocurrency users have sought increasingly nefarious methods of tricking novices into handing over access to funds. Just this week, a report identified cryptojacking as a sign of increasingly discreet behavior among hackers.

Google itself has come under fire for its own apparent lack of diligence in the past, in February pulling a fake version of popular decentralized app MetaMask from its Play store.

As Cointelegraph reported last month, users of cryptocurrency wallets Electrum and MEW were also facing phishing attacks, according to posts published on Reddit and Twitter.

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Canadian Police Asks for Public Assistance to Identify Bitcoin Fraudsters

The Calgary Police Service Cybercrime Team has asked the public to assist in the identification of four individuals allegedly involved in multiple fraudulent Bitcoin transactions.

Canadian police are seeking information on individuals alleged to be involved in defrauding Bitcoin (BTC) ATMs (BTMs), according to an announcement published by the Toronto Police Service on March 13.

The Calgary Police Service (CPS) Cybercrime Team has asked the public to assist in the identification of four individuals allegedly involved in multiple fraudulent transactions made within the country and targeting one Canadian Bitcoin firm. The CPS initially received the information in October 2018.

The press release states that in September of last year, the suspects allegedly made 112 fraudulent transactions at BTMs in seven Canadian cities, including Calgary, Toronto, Montreal, Ottawa, Hamilton, Winnipeg, and Sherwood Park. The CPS believes that the suspects made “double-spend” attacks.

In such attacks, the suspect allegedly withdrew money from a kiosk and subsequently cancelled their transaction remotely before the BTM operator could process the withdrawal. The fraud reportedly resulted in CA$195,000 ($146,666) in losses to the company.

Recent research published by crypto analytics company CipherTrace in January revealed that about $1.7 billion in cryptocurrency had been obtained via illicit means in 2018. Of that $1.7 billion, over $950 million was stolen from crypto exchanges, representing a 3.6 times increase over 2017. In 2018, at least $725 million was lost to scams such as ponzi schemes, exit schemes and fraudulent initial coin offerings.

At the same time, analytics company Chainalysis reported that cryptocurrency-related crime has decreased over the past few years, only accounting for 1 percent of all Bitcoin transactions in 2018. Chainalysis also made a prediction of criminal trends in the space in 2019, outlining increased usage of decentralized platforms and efforts to move and launder money around the world through cryptocurrencies.

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Australia: Financial Regulator Suspends Two Crypto Exchanges in Drug Trafficking Case

Australia’s financial watchdog has shut down the operations of two crypto exchanges in connection with a drug trafficking case.

The Australian anti-money laundering watchdog has suspended the registrations of two cryptocurrency exchanges in connection with a drug trafficking case, the agency announced in a press release on Friday, March 8.  

The Australian Transaction Reports and Analysis Centre (AUSTRAC) — a government financial intelligence agency that aims to prevent money laundering, tax evasion, welfare fraud and terrorism — suspended the two crypto exchanges’ operations because of their association with a suspect in an alleged organized crime syndicate.

According to the joint press release from AUSTRAC and the Australian Federal Police, a 27-year-old man has been arrested on several drug trafficking-related charges. The investigation found that the accused man “was a key member” of the crypto exchange businesses, leading the watchdog to suspend their operations.

According to Reuters, the move is the first crypto exchange suspension under AUSTRAC’s authority, since new legislation last year brought crypto exchanges within its sphere of oversight.

The number of cryptocurrency-related fraud and crimes has dramatically increased worldwide. As previously reported, about $1.7 billion in cryptocurrency had been obtained via illicit means in 2018, according to research published by crypto analytics company CipherTrace.

Previously, the United Kingdom Financial Conduct Authority had revealed that investment scams related to crypto led to over $255 million in investor losses in 2018, with approximately 5,000 reported cases, as Cointelegraph wrote on Feb. 6.

As Cointelegraph reported just yesterday, the South Korean Supreme Prosecutors’ Office established a new task force, aimed at fighting cryptocurrency-related scams. The number of such crimes in the country has reportedly increased from 53 registered cases in 2016 to 4,591 in 2018.