Category: Scams

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Crypto News NFTs Real Estate Scams

Sydney Cafe Owner Aims to Turn Remote Island into Crypto City

The owner of a busy Sydney café, Denys Troyak, recently closed up shop, packed his bags and jetted off to help build what he hopes will become a crypto utopia in the Pacific island nation of Vanuatu. 

According to a report from the ABC, Mr Troyak is now running operations for the supposed crypto-paradise-in-the-making, a private city to be known as Satoshi Island. Named after the pseudonymous founder of Bitcoin, the island is touted as the place to be for crypto industry professionals and crypto-enthusiasts.

ABC’s report indicates supporters of the idea having already invested in plots of land on the island valued at between $900 and $11,000.

NFT-Based Land Deeds in Crypto-Centric Paradise

One of Satoshi Island’s key investor selling points is its promise to allow people to own land on the island and have their ownership represented in the form of non-fungible tokens (NFTs) rather than traditional paper deeds. 

The team behind Satoshi Island claim these NFTs can be bought and sold much more easily than traditional real estate, allowing investors to easily trade their NFTs on secondary markets if and when they decide they want to take profits.

In addition, Satoshi Island plans to release citizenship NFTs which will verify a holder’s right to live and work on the island and entitle them to additional perks such as access to airdrops and early mints. Notably, however, Satoshi Island isn’t a country in its own right: it’s a part of Vanuatu and these NFTs will not grant holders citizenship of Vanuatu.

Image source: Satoshi Island website

Haven’t We Seen This Before?

You may be thinking this all seems a bit far fetched, and indeed there have been several previous attempts to establish crypto-utopias on tropical islands that have failed for various reasons.

Perhaps because of the poor track record of these kind of projects, Satoshi Island has attracted its fair share of critics. One of the key concerns these critics have raised is that under Vanuatu law the NFT buyers can’t actually own the land they’re being sold. 

Speaking to the ABC, Mr Troyak himself said, “one cannot own land in Vanuatu…NFT holders have exclusive rights to the blocks of land on Satoshi Island” — how this squares with claims on the Satoshi Island website that investors can “own a real piece of the island” is not clear.

Image source: Satoshi Island website

Another issue facing the team behind Satoshi Island is that in January the Vanuatu Financial Services Commission (VFSC) issued a notice warning investors the project could be a scam. This notice has since been removed after Satoshi Island took legal action against the VFSC claiming it was harming their business. But doubts still remain and the Vanuatu Government continues to evaluate the project.

In related news, Boracay, an island off the west coast of The Phillipines has been labelled ‘Bitcoin Island’, on the back of growing support for crypto as a form of payment among local businesses driven largely by promotional activity by the crypto wallet app Pouch.

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Crypto Wallets Ethereum MetaMask Scams

MetaMask Users Warned of New Phishing Campaign Targeting Users

Crypto security firm Halborn has warned of a new email phishing campaign targeting MetaMask users. 

In a blog post published July 28, Halborn’s technical education specialist Luis Lubeck analysed the phishing email and highlighted red flags users should look out for to keep their digital assets safe from these types of scams.

How the Scam Works

This latest scam involves an email, ostensibly from MetaMask, asking the recipient to verify their MetaMask wallet’s seed phrase. The recipient is told the seed phrase is needed by MetaMask in order to comply with regulations and that failure to comply will result in their wallet being “restricted”:

Screenshot of the phishing scam email received by MetaMask users.

Clicking on the button to verify the seed phrase takes recipients to a fraudulent imitation of the MetaMask website where they are prompted to input their seed phrase. If the user complies, the scammers gain full access to the wallet, allowing them to steal the user’s assets.

Red Flags and Warning Signs

Lubeck cautioned that to an inexperienced, casual crypto user not paying close attention, the email could appear legitimate. However, he highlighted some important red flags, including:

  • the sending address not being from a legitimate MetaMask domain, but rather from ‘metamaks.auction’;
  • the lack of personalisation, such as the recipient’s real name or other identifying information; and
  • the call to action button linking not to MetaMask’s website, but to a fraudulent URL.

Lubeck stressed that the best defence against phishing attacks is to be extra careful when receiving email requests related to crypto accounts or wallets:

The best defence against phishing attacks like these is to stay vigilant when receiving emails and think twice before doing anything that seems a bit unusual or potentially suspicious. 

Luis Lubeck, technical education specialist, Halborn

MetaMask Frequent Target of Scammers

Due to its status as the most popular wallet for Ethereum, MetaMask is often targeted by scammers. 

In April, MetaMask warned Apple users to disable iCloud backups after it was revealed their MetaMask seed phrases were being automatically backed up to the cloud storage service and then targeted in phishing attacks. In one case, a user lost over US$600,000 worth of assets to this scam.

In November 2021, a Reddit user reported his friend had lost 38 ETH to another MetaMask scam in which a paid Google ad directed users to a fake MetaMask website to install a fraudulent version of the browser extension, allowing scammers to steal users’ assets.

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Crime Hackers Mining Scams Security

‘Cryptojacking’ in Financial Sector Soars 269% in 2022, Security Firm Report

A report from cybersecurity company SonicWall shows financial firms are now the main victims of so-called ‘cryptojacking’ attacks, following a 269 percent increase in the frequency of cyber-related exploits targeting the finance sector in the first half of 2022.

Cryptojacking refers to a cyber attack where a hacker uses malware to surreptitiously install crypto mining software on a victim’s computer, commandeering the computer’s resources to fraudulently mine crypto. It results in significantly degraded computer performance and high electricity costs for the victim.

Finance and Retail Sectors are Major Targets

In previous years, healthcare and education sectors had been the primary victims of cryptojacking, but that changed recently after what the report’s authors described as a “dramatic reshuffling” in 2022. 

Global cryptojacking volume increased 30 percent compared to the first half of 2021. The financial sector has borne the brunt of the massive increase and it now suffers over five times more cryptojacking attacks than the second-placed retail industry, which itself saw a 63 percent increase in attacks year-to-date.

Last year, partly in response to the number of cyberattacks against domestic businesses, the Australian federal government introduced controversial, far-reaching legislation to increase its powers in the event of a high-risk security attack.

Cryptojacking Increase Related to Fall in Ransomware Attacks

The report argues the huge growth in cryptojacking can be partly attributed to a shift away from ransomware attacks by scammers.

Unlike ransomware, which announces its presence and relies heavily on communication with victims, cryptojacking can succeed without the victim ever being aware of it.

2022 SonicWall Cyber Threat Report

“And for some cybercriminals feeling the heat, the lower risk is worth sacrificing a potentially higher payday.”

As mainstream adoption of crypto has grown, organised criminals have increasingly used the new technology to ply their illicit trade. A 2021 report from Chainalysis estimated US$33 billion had been laundered through crypto in the past five years.

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Dogecoin Markets Regulation Scams

Dogecoin Copycat ‘TeddyDoge’ Drops 99.95% in $4.5 Million Rug Pull

The Dogecoin copycat, TeddyDoge (TEDDY), has lost over 99.95 percent of its value over the past few days after suffering what crypto security firm PeckShield described as a “soft rug pull” last weekend:

PeckShield said wallets connected to the coin’s developers acquired and then swapped over 30 billion TEDDY tokens – valued at approximately US$4.5 million – for wrapped Binance Coin (wBNB).

The wrapped BNB was then converted to BNB and Binance USD (BUSD) and gradually transferred to Binance, sending investor confidence and the price of TEDDY plummeting.

Rogue Developers Plunder Liquidity Pools

The TeddyDoge developers were able to easily steal such a large amount of assets because they controlled the TeddyDoge liquidity pools, meaning they had total access to the token pairs held in their smart contracts.

Regulators are slowly starting to wake up to the risk rogue crypto developers pose to investors. In April, new legislation was filed in New York state to specifically outlaw crypto rug pulls.

Rug pulls in crypto refer to projects that often initially appear legitimate but eventually, when the price has pumped sufficiently, the developers abandon the project and make off with investors’ assets, figuratively pulling the rug out from under them. In the case of TeddyDoge, investigators have labelled it a “soft rug pull” as they’re not yet certain the developers have totally abandoned the project.

Project’s Telegram Admins Not Sure What Happened

The administrators of the TeddyDoge Telegram channel also remain uncertain as to exactly what caused the loss of funds and price crash, saying it could have been either “a bug in our cross-chain bridge or a leaked developer wallet”. 

The admins warned users not to buy any more TEDDY tokens for now, saying they had closed the cross-chain bridge and were “in the process of fixing it”. They also said that TEDDY holders would soon receive a new token called DRAC, as the project was rebranding from TeddyDoge to the DRAC Network.

TeddyDoge is the latest in a long line of crypto projects to have defrauded investors. In November 2021, the founders of the curiously named Monkey Jizz DeFi project made off with approximately US$300,000 of investors’ funds after having gone to great lengths to appear legitimate and assure investors.

Categories
Crypto News NFTs Scams

Hackers Take Over British Army’s YouTube, Twitter to Promote NFTs

The British Army is investigating a hack that occurred on its Twitter and YouTube accounts last week, the BBC has reported. It seems the hacker used the accounts to promote NFT collections.

After the attacker gained control of the British Army’s Twitter feed, he or she renamed it to “psssssd” and “Bapesclan”, changed the profile pic to an ape-like joker, and promoted several NFT collections to the Army’s 365,000 followers.

The Twitter feed can be found on web.archive:

On the other hand, the Army’s YouTube channel was plagued with edited videos of billionaires such as Elon Musk, creating a false impression that they were promoting the scam.

Trolling the British Government

The organisation managed to regain full control of both accounts by July 3. While there was no real damage done by the hack, one could see the incident as simply a move to troll people, specifically a UK government organisation.

An Army spokesperson told the BBC: “Whilst we have now resolved the issue an investigation is ongoing and it would be inappropriate to comment further.”

Intercepting YouTube accounts to promote NFT and crypto scams has become a common practice for hackers, according to Google’s Threat Analysis Group. Most recently, Beeple – a popular digital artist and NFT creator – had his Twitter account hacked, resulting in a US$438,000 loss to a phishing scam.

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Australia Investing Regulation Scams

Australians Lost Almost $100 Million in 2021 to Crypto Investment Scams

Aussies lost more than A$2 billion to scams in 2021, including losses of A$84 million due to scammers seeking payment with cryptocurrency, according to an Australian Competition and Consumer Commission (ACCC) report.

The ACCC’s annual report on scams published on July 4 found that investment scams increased by 135 percent in 2021 and caused the most financial harm, resulting in A$701 million lost by Australians. 

This spike was driven specifically by crypto investment scams, which led to Aussie investors reporting losses of A$99 million – 270 percent higher than the previous year. 

The report tallies losses based on consumer reports shared with Scamwatch, ReportCyber, and 12 financial institutions and government agencies.

Common Types of Crypto Scams Aussies Fall For

Some of the most common ways scammers exploited Aussies’ interest in crypto to steal their hard-earned money include:

  • fake investment and crypto trading platforms, which sometimes mimic legitimate, well-known websites;
  • sales of fake crypto wallets;
  • tricking people into revealing their seed phrase for an existing wallet; and
  • offers to “help” people get set up on a crypto platform by remotely accessing their computer. 

Scammers typically contacted victims by phone, or through social media and websites. Crypto investment scams affected all age groups but people aged 65 years and over lost the most money (A$26.5 million). 

Combating Crypto Scams Requires ‘Urgent Work’

In her foreword to the report, ACCC deputy chair Delia Rickard suggests urgent work is needed to combat crypto investment scams:

The popularity and hype of cryptocurrency has led to a surge in losses to investment scams with combined losses of $701 million. At the same time, it is also becoming the preferred method of payment across all types of scams.

Delia Rickard, deputy chair, ACCC

While bank transfers remained the most common way scammers requested payment from victims in 2021, requests for cryptocurrency increased dramatically – up 216 percent. Earlier this year, the ACCC revealed crypto had surpassed bank transfers as scammers’ preferred payment method. 

Rickard also expressed her hope that government efforts towards licensing digital currency exchanges and custody requirements for crypto assets would slow the growth of crypto scams. Consumer groups have also called for Australia’s new Labor government to protect crypto investors through more stringent regulation.

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NFTs OpenSea Scams

OpenSea Announces New Security Features to Protect Users Against Scams

In response to a rash of recent stolen and plagiarised NFTs implicating its platform, OpenSea has announced the launch of a new feature that will automatically hide suspicious NFT transfers from view on its marketplace.

Fresh Investments in Safety Measures

Just last month, OpenSea suffered a security breach on its main Discord channel that allowed hackers to promote a fake YouTube partnership with the NFT platform. As a result, OpenSea has announced investments in theft prevention, IP infringement, scaling review and moderation. It also intends to reduce critical response times in high-touch settings, as foreshadowed by the project’s co-founder and CEO, Devin Finzer:

Self-Detection Technologies to Combat Fraud

OpenSea will use “critical auto-detection” technologies for copyright breaches and other instances of fraud. According to Finzer, removing such elements from the platform will improve its overall performance and will also prevent unsolicited advertisements and potential frauds on open blockchains being seen on OpenSea.

As the NFT boom broke out last year, business at OpenSea increased accordingly until frequent hacks and frauds left many investors dissatisfied with the platform’s efforts to compensate victims and combat theft. Last month, OpenSea rolled out measures to reduce fraud while improving authenticity.

This latest round of safety measures arrives just as demand for NFTs is dropping off and the cryptocurrency market in general is in a downward spiral, though they will be nonetheless welcome.

Categories
Australia Regulation Scams

Aussie Consumers have Already Lost $200 Million to Investment Scams in 2022

The Australian Competition and Consumer Commission’s Scamwatch site has found that Aussies lost over A$205 million to investment scams between January and May of 2022.

This represents a 314 percent increase compared to the first four months of 2021, with more than A$80 million of this year’s losses (between January 1 and May 1) from crypto scams alone.

https://www.australianmining.com.au/news/accc-tackle-large-companies-pressuring-small-contractors/
The ACCC warns of a significant increase in investment scams.

ACCC On Edge Over Losses

With more than half of the year still ahead, these daunting figures have the ACCC on edge. Its deputy chair, Delia Rickard, has noted that consumers who lack familiarity with crypto and its intricacies are most likely to accidentally engage with scam tactics.

https://itwire.com/it-industry-news/telecoms-and-nbn/accc-has-a-$300,000-court-win-against-superfone.html

We are seeing more money lost to investment scams and so are urging all Australians not to trust investment opportunities that seem too good to be true.

Delia Rickard, deputy chair, ACCC

While the number of investment scams has increased compared to the same period last year, the true amount of funds lost to investment scams could be far higher, the ACCC believes. This is because only about 13 percent of people report their losses. In 2022, the number of reports is down despite losses increasing, suggesting investors are sustaining higher individual losses on average and are reticent to disclose them.

The ACCC also believes that crypto scams are likely to have increased due to a heightened awareness of crypto introducing many naive investors to the game.

Louder Calls for Regulation

In August 2021, the ACCC began issuing warnings regarding scammers swindling Aussies via fake crypto platforms. These “creative” ploys had seen unscrupulous operators impersonating crypto exchanges and targeting victims via chat channels such as Telegram.

The new federal Labor government is being urged by consumer advocates to protect Aussies from these crypto scams. CHOICE, Australia’s largest consumer advocacy group, is calling for increased regulation of the industry – with the addition of a “single definition for crypto assets”.

Categories
Crypto News Scams

Crypto Scams Raked in $1 Billion in 2021, US Regulator Reports

According to a report by the US Federal Trade Commission (FTC), more than 46,000 people have been scammed out of US$1 billion-plus since the beginning of 2021.

The ‘Data Spotlight’ report says almost half of those scams began with some sort of post on a social media platform.

Facebook and Instagram Loom Large in Scams

The report detailed that Instagram was responsible for 32 percent of the scams, while Facebook, also owned by Meta, accounted for 26 percent. The Australian Competition and Consumer Commission has announced its intention to sue Meta over its failure to block crypto advertisements involving public figures that are in breach of Australian consumer law.

Most of the reported losses derived from investment schemes that offered massive returns and took advantage of people’s lack of knowledge regarding cryptocurrencies. Around US$575 million of total losses suffered were attributed to bogus investment opportunities, while a distant second was romance scams, which stood at US$185 million lost.

Retirees Record Highest Individual Losses

The report also found that people aged 20 to 49 were three times more likely to report losing money to a crypto scammer than those in an older cohort. However, the median age for individual losses was people in their 70s, with an average of US$11,708 lost.

The total losses suffered may officially stand at US$1 billion, but that figure fails to take into account the billions lost in last month’s implosion of Terra/Luna:

Categories
Australia Cryptocurrency Law Scams

Australian Labor Government Urged to Protect Aussies from Crypto Scams

Consumer advocates have begun urging the new Australian Labor government to protect citizens from crypto scams. This accompanies the release of a national survey conducted by CHOICE on Australians’ attitude towards crypto:

CHOICE vs Crypto Scams

Consumer advocates are calling for industry reform in the crypto and blockchain sector as the Labor Party embarks on its first term of government. Despite only one in 10 Aussies having reportedly purchased crypto in the past 12 months, a concerning cohort of those were caught up in investment scams. On top of this, the recent flattening of the market has seen billions of consumer dollars lost.

The combination of crime and market volatility has prompted CHOICE, Australia’s leading consumer advocacy group, to petition the incoming government for change:

https://www.linkedin.com/in/patrickveyret/overlay/photo/

CHOICE is hearing from many Australians about financial loss and other harm caused by purchasing crypto assets that were not what they appeared to be.

Patrick Veyret, spokesman for CHOICE

CHOICE is calling for more stringent regulation and is composing a submission to the federal treasury. The submission will request several changes, including a “single definition for crypto assets” for regulatory purposes, as well as the requirement for crypto exchanges to install appropriate measures to “prevent fraudulent payments and to reimburse consumers” should fraudulent payments occur.

Consumer Watchdog Nips Crypto

The Australian Competition and Consumer Commission (ACCC) has been cracking down on crypto scammers over the past year. In March 2022, the ACCC sued Meta, Facebook’s parent company, over its failure to prevent the circulation of scam crypto ads. The misleading ads took the form of several local Aussie celebrities appearing to endorse crypto investments and were in adjudged to be in breach of Australian consumer law.

An uptick in the number of crypto investment scams was reported by the consumer watchdog in April this year as crypto superseded bank transfers in terms of investment scams. As a result, losses to crypto scams had increased by 90 percent in the space of three months.