Category: Crime

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Crime Crypto News Illegal Scams

Stolen COVID-19 Vaccines and Fraudulent Certificates Sold on Darknet Markets for Crypto

An investigation undertaken by the Coinfirm blockchain analytics team has uncovered illicit trade in Covid-19 vaccines, certificates, and tests on darknet marketplaces.

According to a July 1 report, Coinfirm has identified addresses linked to various vendors selling illicit Covid-19 essentials for crypto assets including Bitcoin (BTC), Ethereum (ETH), Dash (DASH), Litecoin (LTC), Tron (TRX), Monero (XMR), and Zcash (ZEC).

Privacy coins are commonly used as assets on Darknet Markets (DNM) to pay for illicit goods. This is due to properties that allow users to transact anonymously, as well as darknet platforms that cater for people who wish to stay anonymous.

The ‘Vaccine Shop’ wallet was found to be linked to 145 other payment-accepting addresses that have been flagged for stolen/cloned credit card vendors, drug traders, and perpetrators of scams – specifically Bitcoin “doublers” (fully automated investment platforms operating with no human intervention).

Vaccines Including AstraZeneca For Open Sale

One darknet vendor known as ‘COVID-19 Vaccine Shop’ was openly selling an assortment of vaccines in bulk ranging from AstraZeneca to SputnikV.

Screenshot of the ‘COVID-19 vaccine’ shop. Source: Coinfirm

Another vendor, the similarly named ‘Vaccine Shop’, openly states it is selling stolen vaccines.

Screenshot of ‘Vaccine Shop’. Source: Coinfirm

A vendor on one of the largest darknet marketplaces, Hydra, claims to deliver “certification of the completion of a full course of vaccinations from Covid-19, the dates of the vaccine and the series, the doctor’s signature and the seal of the medical organisation”.

Notwithstanding “the obvious dangers of having rogue agents within the medical profession”, one of the most worrying aspects is that some of these services are linked to people who can input and alter information within national health systems.

A US-based vendor, catering to US residents, claims to be able to input client details into the system.

Coinfirm report

Rigorous KYC Measures Remain Vital

The importance of stringent Know Your Customer (KYC) standards have long been a topic of debate. Exchanges and other entities that handle and swap crypto and don’t have KYC built into them can play host to criminals and malicious interest groups seeking an easy way to cash out their funds.

It is for these reasons that every obliged entity should institute rigorous KYC policies.

Coinfirm report
Categories
Australia Bitcoin Crime Crypto News Monero

Aussie Couple Charged for Operating DarkMarket Platform Accepting Bitcoin and Monero Payments

German prosecutors have charged the Australian couple allegedly behind DarkMarket, one of the world’s largest illegal marketplaces operating on the darknet.

DarkMarket was shut down on 11 January and the suspected operator of the marketplace, a 34-year-old Australian man, was arrested near the Germany-Denmark border soon after. It is alleged that his 32-year-old wife was responsible for the design of the website and mediation of customer disputes. The couple, who are living in Australia and cannot be named for legal reasons, have now been officially charged by German prosecutors.

German news breaks of DarkMarket seizure. Source: Europol

What Was DarkMarket?

DarkMarket was a virtual marketplace that sold all manner of illegal items. It operated on the darknet and users paid with crypto such as Bitcoin and Monero.

Illegal drugs of all kinds, counterfeit money, stolen or forged credit cards, malware and many other illegal goods were traded on ‘DarkMarket’.

Koblenz Prosecutor General’s Office

DarkMarket was a huge marketplace with almost 500,000 users and more than 2,400 sellers. Over 320,000 transactions were made during its operation: more than 4,650 Bitcoin and 12,800 Monero were traded (at the current rate, this represents more than €140 million, or A$220 million worth).

Humble Origins … in a Hackathon

DarkMarket’s origins are quite fascinating. In 2014, DarkMarket was one of the winners of the Bitcoin Expo hackathon in Toronto, Canada. The project was described as a decentralised marketplace that could not be shut down. The official Ethererum Twitter account even put up a post congratulating the team:

Crypto Crackdown Goes Global

Of late, there appears there to be an increased global crackdown on those using crypto for nefarious purposes.

At the start of the month, Chinese police arrested 1,100 people for crypto-related money laundering charges. And in April, a Swedish-Russian citizen was arrested for operating a darknet Bitcoin website, Bitcoin Fog, and was accused of laundering over US$366 million.

Categories
Bitcoin Crime Crypto News United Kingdom

UK Police’s Biggest Ever Crypto Seizure: £114 Million

London’s Metropolitan Police have impounded the equivalent of US$160 million in cryptocurrency as part of a money-laundering investigation, to date the largest haul of its kind in Britain and one of the largest in the world.

Police would not specify which cryptocurrencies were intercepted, but revealed the operation was carried out by its Economic Crime Command team in connection with money-laundering offences.

The Met’s Deputy Assistant Police Commissioner Graham McNulty spoke to Britain’s Sky News of the link between money and violence and how the latter is used to protect criminal profits and maintain control of territories.

Cash remains king, but as technology and online platforms [continue to] develop, some [criminals] are moving to more sophisticated methods of laundering their profits. But we have highly trained officers and specialist units working day and night to remain one step ahead.

Graham McNulty, Deputy Assistant Commissioner, London Metropolitan Police

Detective Constable Joe Ryan added: “Criminals need to legitimise their money, otherwise it risks being seized by law enforcement.”

The proceeds of crime are almost always laundered to hide the origin, but by disrupting the flow of funds before they are reinvested, we can make London an incredibly difficult place for criminals to operate.

Det. Const. Joe Ryan, London Metropolitan Police

New Record in Crypto Misappropriations

The global record in crypto seizures once belonged to dark web marketplace Silk Road and its founder Ross Ulbricht when in 2020 the US Department of Justice recovered US$1 billion in stolen Bitcoin. But that amount is dwarfed by the US$3.6 billion in Bitcoin that’s gone missing following the disappearance earlier this month of the Cajee brothers who founded a cryptocurrency investment platform in South Africa.

Closer to home, in February, NSW Police arrested the head of a multimillion-dollar money-laundering syndicate after stopping his car in Sydney’s inner west and finding AU$1 million cash on board.

Categories
Crime Crypto News Hackers Investing Scams

Founders of South African Crypto Investment Company Vanish with $3.6 Billion Worth of Bitcoin

Ameer and Raees Cajee, the brothers behind Cape Town-based crypto investment platform Africrypt, have disappeared under suspicious circumstances, together with 69,000 Bitcoins belonging to their clients.

Africrypt Investor Presentation 2020: Moneyweb

The Promise of Exceptional Returns and Where Things Started Going Wrong

The company was founded in 2013 and over the years had managed to secure a lot of support from investors, including some prominent local celebrities. Ostensibly, it was a well-run business that continued to grow on the back of “sophisticated algorithmic trading” that promised returns of 10% per day.

Things took a strange turn in April when investors were sent an email alleging a hack. The email noted that the platform would be shut down and investors’ accounts, wallets and nodes frozen. Most surprisingly, investors were requested not to contact law enforcement authorities as this would “slow the recovery process”.

Investors Appoint Investigators as Suspicion Grows

Shortly thereafter investors hired specialist legal practice Hanekom Attorneys who established that the company had moved 69,000 Bitcoins from their clients’ wallets through a crypto tumbler, making them virtually untraceable. Investigators also found that Africrypt employees had lost access to the back-end platforms seven days before the alleged hack.

We were immediately suspicious as the announcement implored investors not to take legal action.

Derek Hanekom, Hanekom Attorneys

Hanekom indicated it was unlikely that all funds came from South Africans, saying it looked more like an international money laundering operation. The South African Police has been assigned to the case and has contacted exchanges to ensure the funds aren’t liquidated. It is alleged that the Cajee brothers have since decamped to the UK, but that remains unclear.

Investors Cautioned: Do Your Own Research

The crypto space remains a very new market that is highly volatile and experimental, and investors are advised to always DYOR (do your own research).

Some recent scams we have seen:

Despite the discernible scams occurring, crypto remains an exciting prospect for the African continent with projects like Cardano developing blockchain solutions for decentralised identity and financial systems.

Categories
Binance Crime Crypto News

Binance Assists International Agencies in Taking Down $500M Ransomware Gang

Binance Assists International Agencies in Taking Down $500M Ransomware Gang

Leading crypto exchange Binance has been commended for playing an active role in taking down a ransomware group known as “FANCYCAT“ which had reportedly laundered about US$500 million in cryptocurrencies. 

Binance Teams with International Agencies

Binance closely collaborated with international law enforcement agencies including the Ukraine Cyber Police, the Korean National Police Agency’s Cyber Bureau and US authorities to halt the operations of the notorious cybercriminal ring. 

According to the announcement, FANCYCAT was responsible for several high-profile attacks, which involved Cl0p and Petya ransomware. It was also alleged to have laundered money from the dark web and conducted a high-risk exchange. 

How Binance Identified FANCYCAT

The exchange said it employed a two-pronged approach in this case, which eventually led to the apprehension of FANCYCAT. The first involved Binance’s anti-money laundering and analytics program, which alerted it to the suspicious activities of the ransomware gang.

Upon detection of the group’s activity, Binance then worked with analytics companies TRM Labs and Crystal (BitFury) to further investigate the on-chain activities of the group, which led to its identification. 

We are continuing to investigate the FANCYCAT criminal syndicate across multiple jurisdictions and the connections associated with other cyber attacks.

Binance announcement

Curbing Illicit Flows to Exchanges

Crypto News Australia has previously reported several cases of Ransomware attacks, where ransoms were demanded in either Bitcoin or any privacy coin. Some cybercriminals have also opted to launder ill-gotten funds in cryptocurrencies, due to their anonymous property. 

This is a thorn in the side for the growth of the crypto space. However, these exchanges can help minimise crypto laundering by stepping up AML measures, as Binance noted. 

Categories
Australia Crime Crypto News Cryptocurrency Tax Superannuation

Australian Federal Taskforce Targets Crypto Fraud, Tax Avoidance

A multi-pronged taskforce that includes the Australian Tax Office (ATO), Federal Police, ASIC and the Australian Criminal Intelligence Commission (ACIC) is poised to investigate cryptocurrency transactions and their role in tax avoidance, fraud and money laundering.

The six-year-old SFCT (an acronym for the portentously named Serious Financial Crime Taskforce) claims responsibility for 40 current court cases involving individuals, along with 50 more operations it says are under investigation.

Focus On Money Laundering, Pandemic Stimulus Fraud and Misuse of Early Release Super Funds

Subjects of interest to the SFCT include the misuse of pandemic stimulus measures (such as JobKeeper), attempts to launder money via cryptocurrency, and fraud associated with last year’s early release of superannuation funds.

According to ATO deputy commissioner Will Day, who heads up the taskforce, “about 14” cryptocurrency exchanges are now sharing data with the SFCT.

Will Day, SFCT chief and ATO deputy commissioner

We’ve got a data matching program that we’ve had in place for a couple of years with digital currency exchanges … We are able to look at data matching to observe people’s spending habits, if they’re purchasing, say, luxury cars or real estate.

Will Day

In December 2018, the federal government injected $182 million in funding over four years to the ATO to extend its investigative brief. Also involved in SFCT activities are the federal Attorney-General’s department, the Commonwealth Director of Public Prosecutions, Border Force, and the Australian Transaction Reports and Analysis Centre.

Tax Time is Approaching in Australia

As tax time looms in Australia, the ATO is set to target Aussie crypto investors as they try to match data from crypto exchanges with taxpayers’ tax returns.

As well as investigating new crypto investors, the ATO may also target those who failed to declare their crypto holdings in previous years.

Categories
Australia Bitcoin Crime Crypto News

IT Student Busted Buying Meth Parcel Off the Dark Web With Bitcoin

The Dark Web is a place where you can purchase drugs and have them delivered to your parents’ house, because it’s where you still live. And you can use Bitcoin to pay for them … unless, of course, you get caught.

Bag containing crystal meth, similar to that seized by Rockhampton Police

Joshua Ashton appeared in Rockhampton Magistrates Court this week after being charged with possession of methamphetamine. Ashton was alleged to have ordered the drug online in March 2021 and paid for it with A$300 worth of Bitcoin. He pleaded guilty to one charge of possessing a dangerous drug after Australia Post had intercepted a parcel bound for his parents’ address.

Parcel Intercepted After Police Tipoff by Australia Post

Ashton, a first-year IT student at Central Queensland University, claimed to have purchased the drug for his personal use. On March 25, his express post shipment containing 1.5 grams of methamphetamine was seized by police after the Australia Post tipoff.

Magistrate Jason Schubert recorded a conviction and fined Ashton $600, effectively tripling his investment.

Categories
Australia Betting Crime Crypto News Gambling

Australian Serial Crypto Conman Will Strike Again, Warns Alleged Victim

A former commercial airline pilot defrauded of millions of dollars in Bitcoin has cautioned other cryptocurrency investors about notorious Australian serial scammer Peter Foster.

Peter Foster arrested by Queensland Police on Port Douglas beach, August 2020. Image: IFW GLOBAL/BLOG.IFWGLOBAL.COM

Konstantinos “Dino” Stylianopoulos, a resident of Hong Kong, claims he was defrauded of A$2 million in Bitcoin by Foster in an online gambling scheme, Sport Predictions, run by Foster under an alias.

Police allege bets made by Stylianopoulos and others participating in the scheme were never placed and instead diverted to Foster.

How a $2 Million Bitcoin Investment Ballooned Into An Estimated $8 Million Loss

“Getting anything back from somebody like this is very difficult,” says Stylianopoulos, who claims he lost an estimated A$8 million when the price of Bitcoin later soared. “The bigger objective is to stop (Foster),” he told The Australian newspaper. “In Australia, I don’t believe anybody else has hurt more people.”

“It’s like (the fable of the frog and) the scorpion … ‘Why did you bite me?’ ‘Because I’m a scorpion’.”

Konstantinos Stylianopoulos

Foster remains at large, released on bail in a jurisdictional mix-up between authorities in NSW and Queensland, where the Sport Predictions operation was based. He had been extradited to NSW as the operation’s Bitcoin transfers were made through a Sydney cryptocurrency exchange.

Police In Two States Lack Shared Jurisdiction

According to Stylianopoulos, NSW prosecutors contacted him the day before Foster was bailed by a Sydney court. “There was no chance for me to voice any opinion on it,” he told The Australian. “My biggest question is, why didn’t they coordinate with police in Queensland to just do a handover?”

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Bitcoin Bitcoin Mining Crime Crypto News

British Police Discover Illegal Bitcoin Mining Farm in Search for Cannabis

English police stumbled upon a Bitcoin mining operation when their drone detected a considerable amount of heat emanating from a warehouse in the West Midlands on May 18.

Suspecting a cannabis farm, the police were able to seize around 100 Bitcoin mining devices which were running on stolen electricity.

Mining operation found by the Police in Sandwell, UK

Detectives said they were tipped off about lots of people visiting the unit throughout the day and a police drone picked up a lot of heat coming from the building.

It’s certainly not what we were expecting. It had all the hallmarks of a cannabis cultivation set-up.

Sandwell Police Sergeant Jennifer Griffin

The computer equipment has been seized but no arrests have been made.

Bitcoin mining equipment in question

Bitcoin Mining Is Not Illegal But Stealing Electricity Is

The police said although it wasn’t illegal to mine Bitcoin, the issue was that the electricity was syphoned from the power grid, hence illegal.

Mining for cryptocurrency is not itself illegal but clearly abstracting electricity from the mains supply to power it is. […]  It is just the second illegal mining operation the local force have discovered in the region.

Sandwell Police Sergeant Jennifer Griffin

We may see an increase in Bitcoin mining “operations” as it becomes easier to make it profitable with China clamping down on their mining farms.

Categories
Bitcoin Crime Crypto News Cryptocurrencies

Man Pays Hitman In Bitcoin To Kill His Wife

Hitman or assassin holds pistol with silencer in hands
Hitman or assassin holds pistol with silencer in hands https://www.dreamstime.com/stock-photo-hitman-assassin-holds-pistol-silencer-hands-image77972286

A man from Tennessee attempted to hire someone to murder his wife, paying in Bitcoin. Fortunately, his plans have been ruined by the BBC, who promptly informed the authorities.

A Nefarious Crypto Plot

According to FBI Special Agent Clay Anderson, Nelson Replogle allegedly paid Bitcoin to someone in an effort to get rid of his wife. The recipient contact came from a murder-for-hire forum, buried in the more obscure corners of the Internet.

After finding a person allegedly willing to carry out the crime, things were set in motion. The hit on his wife Ann was supposed to be carried out while she was on her way to the veterinarian with their pet.

It is not known how staff members of the British Broadcasting Corporation (BBC) learned of the plot, nonetheless they informed the authorities. The sheriff of Knoxville, TN in turn involved the FBI. Investigations quickly led from the crypto transaction, identified to have happened on Coinbase exchange, to Nelson Replogle – separate warnings have been sent to both him and his wife.

Crypto Transactions Not So Anonymous After All

Cryptocurrency transactions seem to have a degree of anonymity depending on the specific platforms and procedures used. Commercial exchange services require their customers to comply with KYC (Know-Your-Customer) regulation.

That might be the reason why the FBI managed to retrieve a lot of data related to the transaction, including name, photos and bank account of Mr Replogle, as well as a confirmation from the Internet Service Provider that the connection happened from his home.

On the contrary, the identity of the hitman remains a mystery at this stage – possibly due to using a personal wallet, disconnected to exchanges requiring KYC and detached from personally-identifiable information.

Criminal Activities Using Bitcoin

Stories like this one show once more that cryptocurrencies could be used for illegal activities, for example involving drugs or guns. Criminals however don’t seem to always know how blockchain technologies work.

It seems also worth mentioning that the portion of the crypto market used for such purposes is relatively quite small and has dropped significantly over the years.