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Donald Trump Sets His Eyes On Crypto

The President of the United States, Donald Trump, has ordered the creation of a new task force to investigate crimes related to the use of cryptocurrencies, especially “cyber fraud and digital currency fraud.”

The details appear in an executive order from the U.S. President and his administration seeking to tackle this problem with higher efficiency and severity.

Read Also: U.N. Chief Of Cybercrime To Crypto-Hackers: “We Will Track You Down, And We Will Bring You To Justice”

According to information provided by Bloomberg, the White House is now more concerned than ever about the growing number of frauds that have been committed through the use of cryptocurrencies and ICO funding.

This wave of “cybercrime” has led them to take the issue more seriously, including this type of actions in the same spectrum of traditional crimes. With this approach, a more thorough investigation of these cases is expected.

Also, in addition to research, one of the positive results expected is the reduction of bureaucracy and conflicting competences. Through the creation of a task force by executive order, the various bodies involved should establish a coordinated policy rather than act independently of each other.

First, the executive order calls for the creation of this new Task Force by The Justice Department (DOJ), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).

SEC Logo Hanging on its Headquarters

The two most active agencies within crypto verse (SEC and CTFC) now have the possibility of establishing more robust and more effective policies by including agencies that have a level of research that goes beyond the purely administrative.

The commission will initiate investigations into various frauds involving cryptocurrency. Some scams (especially some exit scams and Ponzi schemes) will be in Mr. Trump’s sights:

“Fraud committed by companies and their employees has a devastating impact on American citizens in the financial markets, the healthcare sector, and elsewhere,” Deputy Attorney General Rod Rosenstein said at a press briefing in Washington.

Thanks to this new commission, the controversial president of the United States has the possibility of exercising a higher level of influence on the actions taken by the state agencies regarding cryptocurrencies

A Hidden Purpose Behind a “Good Cause”

Bloomberg also points out that Mr. Trump’s move has a political component and is not a simple, selfless action by the president:

“The creation of the task force comes as the Trump administration is moving to overhaul the CFPB, an agency formed after the financial crisis to better protect people from predatory mortgage lending and abusive credit card contracts. The CFPB has become one of the most politically divisive agencies in Washington, hailed as a regulatory crown jewel of consumer protection by Democrats while maligned by Republicans as a bastion of government overreach.”

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Authorities Dismatle a Criminal Organization That Accepted Bitcoin (BTC) As Payment in Darkmarkets

A criminal gang using cryptocurrencies to produce and distribute “new psychoactive substances” (NPS) through various markets on the deep web was investigated for years by the Spanish and Austrian authorities until finally, a few days ago, they were able to identify and capture its members.

The joint work between the Spanish Civil Guard, the Austrian Federal Police and Europol involved a rigorous level of planning, coordination, and secrecy since it is normal that in the event of any suspicion, this type of gang fade entirely out of the network.

cryptocurrency scamAccording to official information from the Spanish Civil Guard, Operation DRYER started in 2015 with the interception of a package in Bavaria. It contained a significant amount of drugs from a PO box in Ogijares (Granada, Spain).

The criminal network had a high level of organization and handled connections in over 100 countries around the world:

Researchers detected a significant movement of parcels and postal envelopes, sent from that post office box to more than 100 different countries, containing narcotic substances camouflaged as other products of recognized brands whose marketing is legal, such as cement additives or anti-humidity products.

Behind this operation was a giant conglomerate of companies and firms in several countries, some of them offshore, whose purpose was none other than to give an appearance of legality to the illegal activity they carried out and to launder the economic benefits obtained from it.

The authorities were able to determine that the criminal gang had been operating at least since 2012. The raw material for the production of the drugs came from China, although they mention that the band had to change its modus operandi after legal regulations in the Asian country underwent significant changes.

As a consequence, the organization set up a laboratory in Amsterdam, which served as a production unit for the NPS, hiring two chemical engineers and purchasing scientific material valued at more than €200,000, such as synthesis reactors, chromatographs, stone crushers or numerous analysis and laboratory materials.

From this laboratory, the narcotic substances were designed and produced, then transfered to two other laboratories located in Alhendín (Granada) and La Pobla de Vallbona (Valencia), which were directly managed by the organisation and in which the final treatment of the product, packaging, and distribution to the final consumer were carried out.

Anonimity: Good, Bad, or Something in Between?

To cover its tracks, the gang accepted cryptocurrencies. In fact, it was the payment method recommended by the merchants. Besides, they used other virtual payment systems which then went redirected to various bank accounts when necessary.

The means of payment offered by the websites to their customers were virtual payment platforms such as Paypal, Payward or Payvision, which were deposited in bank accounts linked to companies of the organization, or through crypto transfers, mainly using Bitcoin (BTC).

To convert these profits into cash, those under investigation used the traditional “Hawala” system, through various intermediaries with other criminal organizations, making transactions of up to €700,000, which were then deposited in safes of specialized companies.

Authorities seized 509 BTC, (about €2,500,000), plus €137,000 in IOTA and €30,000 in LUMEN.

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$1.2 Billion Dollars Have Been Stolen Since 2017 According to a Report

As cryptocurrencies expand and attract many investors all over the world, there have also been criminals trying to scam users and steal their funds. According to estimates form the Anti-Pishing Working Group, criminals have ben able to steal about $1.2 billion dollars in cryptocurrencies sin the beginning of 2017.

Cryptocurrency Criminals

The research shows that an important number of virtual currencies have been stolen from their owners. These are very alarming numbers for the crypto community. How to avoid being hacked if even top virtual currency exchanges have been affected by hacks?

The estimates that the non-profit group was able to gather, include reported and unreported theft of cryptocurrencies. That includes the most important hacks in the last times, and also minor thefts that couldn’t be reported to local authorities.

Dave Jevans, Chief Executive Officer of the cryptocurrency security firm CipherTrace, explained:

“One of the problems that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys.”

Additionally, the recovery rate of owners has been 20% of the stolen funds – which is always better than nothing. Though, these numbers could be bigger if other security measures are implemented. But the truth is that law enforcement officials are having trouble to find criminals involved in these thefts.

According to Jevans, the new General Data Protection Regulation (GDPR), will negatively impact the overall security of the internet and will also aid cybercriminals. GDPR rules aims to simplify the rules that companies ned to follow

“By restricting access to critical information, the new law will significantly hinder investigations into cybercrime, cryptocurrency theft, pishing, ransomware, malware, fraud and crypto-jacking.”

Important Hacks

Since the beginning of 2018, the market has experienced different hacks that took place in different virtual currency exchanges. Two of the most important where the Japanese exchange Coincheck and the Italian platform BitGrail.

Coincheck was one of the most important virtual currency exchanges in Japan. At the beginning of the year, the exchange reported that it had been hacked resulting in a loss of 523 million NEM coins – which at that time were valued at $500 million dollars.

The company had to explain the situation to the media giving a press conference. The cryptocurrencies were not properly stored in cold or multi sig wallets, making it very easy for hackers to access the funds.

Another important hack occurred to BitGrail, an Italian cryptocurrency exchange that was focused on Nano tokens (former RaiBlocks / XRB). During a hack that took place at the beginning of February, the company announced that lost 17 million Nano – which price fell from $11.5 to $9.12 dollars.

$195 million dollars have been stolen, which means that between Coincheck and BitGrail they account for an important percent of the total $1.2 billion dollars stolen since the beginning of 2017.

After these two hacks took place, other exchanges decided to impose further security measures to avoid being attacked. It is always advised to users to save their virtual currencies in cold storage wallets.