Category: Scams

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Australia Scams Sydney

Sydney Man Arrested For Laundering Cash Into Crypto

A man who – according to police sources – is the head of a profitable multi-million dollar crime syndicate focusing on money laundering has been arrested in Sydney’s inner west area.

His car allegedly contained $1 million in cash when he was stopped by police.

Under Supervision For Months

Police sources have stated they were on the man’s trail since October 2020.

The man arrested – a 30-year-old by the name of Yi Zhong – was stopped by police at around 5:30 AM on Monday and taken to Auburn police station.

The police reportedly found and seized 2 bags containing $1 million in cash – and then proceeded to search a home, presumably his, in Wentworth Point. Over a kilo of methylamphetamine, cocaine, a laptop, several hard drives, and USB sticks, as well as mobile phones, were seized to help in the investigation.

In a press statement, the police stated that they will be pressing charges against the man, accusing him of multiple crimes – chief among them being the direction of a criminal syndicate that laundered a total of $5,479,300 into bitcoin following his orders.

“Police will allege in court the man directed a criminal syndicate to launder money by converting cash into bitcoin on his behalf, totalling $5,479,300.”

In total, Mr. Zhong will be charged with 24 offences – out of which 19 are for “knowingly dealing with the proceeds of crime, knowingly directing activities of a criminal group and drug-related offences.” He is due to appear in court on the 19th of April and has already been denied bail.

Detective Superintendent Matt Craft stated that the gang seemed to have operated as money-launderers-for-hire – and that a series of consequent arrests are probably on the horizon.

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Australia Cryptocurrencies Scams

US DOJ Charges 3 North Korean For Cybercrimes That Caused Over $1.3 Billion In Damages

The US Department of Justice is charging 3 hackers – presumed to be associated with the infamous Lazarus Group that took on Sony back in 2014 – with theft and extortion of cryptocurrency between 2017 and 2020.

Possible Funding Of Nukes Via Crypto Theft

It’s been less than a week since the UN made allegations that North Korea may be funding its nuclear program using cryptocurrency stolen by its army of hackers.

To go along with the charging of the 3 individuals, the FBI, the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Treasury published a joint statement about a piece of malware known as AppleJesus. This malicious app poses as a legitimate cryptocurrency exchange, fooling users into downloading it and transferring their crypto to unknown sources – presumed to be run by North Korea.

“This report catalogues AppleJeus malware in detail. North Korea has used AppleJeus malware posing as cryptocurrency trading platforms since at least 2018. In most instances, the malicious application – seen on both Windows and Mac operating systems – appears to be from a legitimate cryptocurrency trading company, thus fooling individuals into downloading it as a third-party application from a website that seems legitimate.”

This attack appears to have targeted users and companies in Australia, the U.S., Canada, Brazil, Argentina, New Zealand, India, China, Russia, Israel, Saudi Arabia, South Korea – among other countries.

Due to international sanctions, North Korea has turned to more unorthodox methods in order to turn a profit. In the past, these activities have run the gamut from farming in-game currencies on World of Warcraft to more typical methods.

In a press statement, Assistant Attorney General John Demers stated that North Korean hackers have been causing quite a lot of damage to banks – except this time, keyboards were used, instead of guns.

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Australia Bitcoin Crypto News Cryptocurrency Law Illegal Scams

Australian Man Pleads Guilty to $90 Million Crypto Hedge Fund Scam

An Australian crypto fund manager has pleaded guilty in a US court for the theft of almost $90 million of investor’s money. 

Stefan He Qin was charged with defrauding clients over a three year period between 2017 and 2021 through two cryptocurrency hedge funds that he founded. The US Securities and Exchange Commission (SEC) began investigating one of the 24-year old entrepreneur’s businesses, Virgil Capital LLC, in December last year.

It was discovered that Qin had attempted to funnel money from his second fund, VQR Multistrategy, to pay investors of the Virgil Sigma Fund. However, after years of risky investments and frivolous spending, much of the funds were gone, leaving investors empty-handed.

Judge Valerie Caproni found Qin guilty of the charges on 4 February 2021 brought forward by the United States Attorney’s Office for the Southern District of New York. US Attorney Audrey Strauss said Qin is now awaiting sentencing after being found guilty of draining “almost all of the assets from the $90 million cryptocurrency fund he owned, stealing investors’ money, spending it on indulgences and speculative personal investments, and lying to investors about the performance of the fund.”

Special Agent Peter C. Fitzhugh who had been investigating the case reiterated the charges, stating that Qin had been using investor’s funds to “live his extravagant lifestyle.”

“Qin orchestrated this reprehensible criminal scheme for many years, making misrepresentations and false promises that coaxed investors into pouring millions of dollars into fraudulent cryptocurrency firms, all the while stealing the hard-earned money of his investors,” he said.

Crypto Scams on the Rise

The case is reminiscent of the recent Mirror Trading International (MTI) scam perpetrated by South African Johann Steynberg. In December last year, Steynberg reportedly fled South Africa after the country’s financial regulator began investigating his company. The Financial Sector Conduct Authority (FSCA) found evidence suggesting that MTI’s broker, Trade 300, was owned and operated by Steynberg.

Despite several warnings issued during 2020, clients continued to invest money into the firm, which promised unrealistic returns of up to 10 percent monthly. The unlicensed firm has now gone into liquidation, with assets worth approximately $863 million unaccounted for.

“There were no proper accounting records and Bitcoin was transferred in and out,” FSCA executive Brandon Topham told Bloomberg. “Thus no definitive answer currently exists as to how much Bitcoin was actually invested but is in the region of 23,000 plus.”

Due to fraudsters taking advantage of the panic and uncertainty brought about by the ongoing pandemic, law enforcement agencies around the world reported a rise in financial scams in 2020. Scams such as these are likely to continue throughout 2021.

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Cryptocurrencies Investing Scams

SEC Goes After Yet Another Crypto Company

Following their legal tussle with Ripple Labs – the second one this year for Ripple, after their debacle with the NPPA – the SEC has also moved against Virgil Capital LLC, a crypto investment firm.

The US Securities and Exchange Commission have put in place an order freezing assets and emergency relief funds for Virgil Capital LLC and all affiliates of the company, citing possible securities fraud.

Undisclosed Investments

Virgil Capital’s cryptocurrency trading fund – Virgil Sigma Fund LP – is being investigated in relation to fabricated records. The record states that up to $3.5 million in investments were not redeemed and $1.7 million in investor funds were due to be cashed in, in an attempt to pay off loans.

Although the funds were meant for crypto trading using a proprietary algorithm, it appears at least some of them were used for risky undisclosed investments and other purposes.

Stefan Quin – the 23-year old founder of Virgil Capital – reportedly told investors ever since July that their assets had been transferred to another fund, known as the VQR Multistrategy Fund LP.

However, it appears the transfers never actually took place.

According to Kristina Littman, the head of the SEC Enforcement Division’s Cyber Unit, the freeze is a preliminary step taken to ensure no more damage can be done to investor assets until the bigger picture is revealed.

“This emergency action is an important step to protect investor assets and prevent further harm. Stefan Qin allegedly made false promises to lure investors and then continued his deception to conceal his misuse of investor funds.”

The SEC’s ongoing investigation will be led by Fitzann Reid of the San Francisco Regional Office and Amanda Straub of the Enforcement Division’s Cyber Unit.

On the litigation side, work will be carried out by Susan LaMarca, Ms. Straub, and Ms. Reid, under the direct supervision of Steven Buchholz and Ms. Littman of the Cyber Unit.

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Crypto Wallets Hackers Scams

Death Threats And Fake Emails: Ledger Users In Danger As Hackers Start Massive Attacks Following The Database Leak


The Sim Swap attacks have begun following Ledger’s database leak, now that hackers have all the personal information of at least 270,000 users. Now scammers are sending apology messages on Ledger’s behalf, tricking users into installing the “latest version”.

Hackers are sending malicious links into tricking users to “Download the latest version” with a convincing letter. One of Ledger’s user fell into the trap and reported losing $4,000 thanks to a modified metatask extension.

Below is a screenshot uploaded by a Twitter user who received the message from the hackers. People on Twitter are alarmed by how compelling and convincing the message is, despite a minor spell error at the end.

But the outrage is even greater since the affected users have reported that Ledger has not commented nor provided assistance of any kind on these messages.

A user from Reddit that goes by the name u/goldcakes reported receiving several death threats over his ledger:

Taken from: Reddit

At least 1 million users were exposed on Raidforum since the attacks on Ledger began. According to the staff, the attack only leaked the personal data of 9,000 users. The company downplayed the issue, saying it was “old data.”

Now it turns out that those 9,000 users became 270,000 people which have all their personal info in hands of cyber-thieves, and are exposed to these types of messages. Likewise, Ledger could be in serious trouble if affected users take legal action, which might start soon.

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Australia Cryptocurrencies Scams

New Leads On Crypto Scam Targeting Australians Using Celebrities

Since 2018, a crypto scam has been using the faces of Australian celebrities without authorization in order to scam people into buying cryptocurrency.

Although the cryptocurrency requested by the scammers is not much – the requested first investment generally amounted to $250 – the scammers used these investments to harvest information such as credit card info and contact information of people looking to invest into cryptocurrencies – which indicated the fact that they probably had plenty of resources that could be targeted.

Fraud On A Massive Scale

Dick Smith, Chris Hemsworth, David Koch, Waleed Aly and Andrew Forrest – all celebrities whose images have been used without permission by scammers on a massive scale.

Even though Google say they remove around 5000 fraudulent advertisements a minute, scammers running massive operations sometimes slip through the cracks anyhow.

The Guardian had some of these ads running on their site through no fault of their own – and have started an investigation that has given investigators a possible lead on the case.

After intentionally signing up for the scam, they were sent to a bitcoin trading service named bitcoin-Up and redirected to another platform, named Gtlot.

The Guardian reporters than received a call from a man attempting to get them to sign up, claiming governments were looking to phase out paper money due to COVID, so it was time to get on board.

Although it is true that many governments – Australia, China and the USA among them – are looking into CBDCs, there seem to be no indicators of such a bold move.

After some sleuthing, the Guardian reporters managed to purportedly link many of the fraudulent websites to 5 people operating out of Moscow – although some information points to a second operational center in Ukraine.

A spokeswoman for the ASIC has said that although they are doing their best to fight the scammers off, it is much harder to do so when the bad actors are based abroad, due to the limitations of international law.

“In some cases, we’ve been able to trace these ads, the majority of which seem to be based overseas, despite creating the impression that they’re operating from Australia by using local addresses and phone numbers on their websites. Any data we have gathered we don’t make this public.”

The fight against online bad actors will be around for a while – but staying safe in the crypto space can be achieved with a few easy tips and the use of your better judgement.

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Scams

Someone Just Lost $50K Bitcoin to Ledger Phishing Scam

Buying and holding Bitcoin (BTC) or any other cryptocurrency might be an easy thing to do, but it does require a great level of vigilance to ensure you don’t lose them to cyber-scams. Hackers are becoming a big threat to the growth and development of the crypto industry. Today, a Bitcoin investor reportedly lost about US$50,000 life saving to hackers in a recent Ledger wallet attack.

Ledger Phishing Scam

Ledger is one of the biggest hardware wallet providers for storing cryptocurrencies offline. About a month ago, the company’s marketing/sales database was breached by hackers, exposing the customers’ contact information to the bad actors. This allowed the attackers to unauthorizedly send false and malicious messages to the wallets users’ who gave Ledger their contact details before the database was breached.

Part of the phishing message sent to Ledger users reads: “Our forensics team has found several of the Ledger Live administrative servers to be infected with malware.” While the message looked professional, the content was false. A few customers were able to spot the attack and raised an alarm. However, the attackers recently changed the content of the message, telling customers that their wallet has been disabled due to know-your-customer (KYC) regulation.

US$50,000 in Bitcoin Gone!

As Brad Mills tweeted on Tuesday, the recent message tricked the Bitcoin investor into sending his life savings to the Ledger phishing scammers. According to Mills, Bitcoin investors must be extra vigilant to overcome social engineering hacks, not just being your own bank. One other proven approach all crypto investors must know is not to input their wallet key phrase in any link or website if they must avoid losing their funds in crypto.

Those key phrases are to be directly entered on the wallets, in this case, the Ledger device.

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Crypto Exchange Scams

Scammers attack GoDaddy-hosted Cryptocurrency Platforms

Several cryptocurrency platforms hosted by GoDaddy have suffered attacks led by fraudsters throughout this week — by phishing scams aimed at GoDaddy’s employees.

The first attack started on November 13 when Liquid — a cryptocurrency trading platform — stated in a blog post about a security incident and data breach. According to a report from KrebsOnSecurity, the fraudsters tricked the employees into transferring control over several cryptocurrency domains to them.

Mike Kayamori, CEO of Liquid, stated that GoDaddy incorrectly transferred account control to a malicious actor:

“On the 13th of November 2020, a domain hosting provider “GoDaddy” that manages one of our core domain names incorrectly transferred control of the account and domain to a malicious actor.”

Stated Kayamori in a blog post.

Kayamori added that the scammers changed the DNS records and took control of several internal email accounts — compromising Liquid’s infrastructure by gaining access to data storage.

NiceHash Under Attack

NiceHash, a cryptocurrency mining service, was the second GoDaddy-based platform that went under attack. The platform reported on November 18 that the settings for its registration records were changed without previous authorization.

The same thing with Liquid — the scammer changed the DNS records. Immediately, NiceHash froze its customer’s funds for 24 hours. Later, the service stated that their records were changed back to their previous settings and remained safe.

“At this moment in time, it looks like no emails, passwords, or any personal data was accessed but we do suggest resetting your password and activate 2FA security”.

stated NiceHash on their site.

Phishing is a type of online scam. The scammers impersonate legitimate organizations via email, text message, advertisement, to other companies, institutions, and people in general — in order to steal important information that could lead to the withdrawal of millions of dollars or any type of damages.

This phishing attack is not the first one to put GoDaddy in the spotlight:

  • In March, a phish hooked a customer service employee from GoDaddy, — compromising the brokering platform Escrow.com, among other sites. The scammer did the same thing — he changed the DNS records, and left a malicious message on the homepage that remained for about five hours.
The message left on Escrow’s homepage. Source: Escrow.com
  • According to Security Boulevard, GoDaddy suffered in October 2019 a data breach that affected 28,000 of its customers’ web hosting accounts — but GoDaddy didn’t know about the security incident until May of this year.

According to KrebsOnSecurity, other crypto platforms were possibly targeted by the same group of scammers. Platforms like Bibox, Celsius Network, and Wirex might have been victims of social engineering and phishing scams. But there are no official statements from these companies.

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Scams

Aussie Nuggets News CEO Says Member Lost $20,000 in Fake Uniswap App

Transparency and Trust, among other things, are very important qualities that can accelerate the adoption and development of the digital currency industry. However, scammers are making this almost difficult to achieve with fraudulent crypto investments, projects, and applications. Many fake mobile applications were recently spotted on Google Play Store and were taken down after being reported.

Several crypto companies and experts have also been working to make the nascent industry safer for investors. Yet, scammers are still persisting with their malicious attacks. Earlier on Friday, unfortunately, a member of the Australian Nuggets News community reportedly lost thousands of dollars to a fake Uniswap mobile application hosted on the Google play store.

Users are Losing Thousands in Fake Uniswap App

The founder of the Aussie media platform, Alex Saunders, confirmed the development in a tweet. Going by his disclosure, the scammers used key phrases to victims’ crypto wallets to unauthorizedly move their cryptocurrencies to their wallets. For instance, the Nuggets News member entered his private key backup phrase to the alleged fake Uniswap application, after which he lost about AU$20,000 in cryptocurrency. 

Don’t Share Key Phrases Anyhow

Dubbed Uniswap DEX, the application was presented on the Google Play store as the Android app for the leading decentralized exchange (DEX), Uniswap. It’s still available in the store, with a 4.4-star rating. It has over one hundred positive reviews, all of which Saunders alleged was fake. Backing this up, the latest reviews are coming up with negative stories for the application. These comments claimed that the app was, in fact, a scam.

“Fraud/Scam alert! This app steals your money! Turkish fraudsters run this app!” one of the comments reads.

Key phrases are personal and should be kept confidential. One best safest measure to avoid being scammed is never to share key phrases to wallets on any online platform. Also, it is advisable for industry participants to conduct due research before parting their funds with any project, especially newly formed ones. 

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Scams

Australian Authorities Charge Former BitConnect Promoter, John Bigatton

Global authorities are still going after the conspirators of BitConnect, the biggest crypto Ponzi scheme that pulled off leaving a bad reputation for the nascent cryptocurrency industry. Today in Australia, the national corporate regulator, ASIC (Australian Securities and Investments Commission), charged John Louis Anthony Bigatton, who was responsible for promoting BitConnect in the country.

ASIC Unseal Charges Former Australian BitConnect Promoter

Per the information, the regulator unsealed several counts against Bigatton, who’s precisely based in Carss Park, New South Wales. The charges included one count of operating an unregistered managed investment scheme, which attracts a fine of $42,000 or five years imprisonment. Among other charges, the former BitConnect was accused of running unregistered financial services on behalf of someone else. The charge itself attracts a fine of $42,000 or two years imprisonments.

The development today follows ASIC long-running investigations into the matter. Bigatton reportedly began promoting the crypto Ponzi scheme in the country between August 2017 to January 18, 2018. According to the regulator, he conducted several seminars across the country in the promotion of BitConnect, which ASIC said was an unregistered investment scheme. The matter today is being prosecuted by the Commonwealth Director of Public Prosecutions. The next court hearing is slated to hold on February 2, 2021.

It’s also worth noting that Bigatton was banned from traveling abroad last year due to his role in promoting the crypto Ponzi scheme. In addition to being enlisted on the Exit Control List (ECL), all his funds, including his assets, were frozen as requested by the regulator. 

BitConnect Bust

BitConnect collapse came as a heavy blow for the cryptocurrency industry. The crypto investment scheme pulled out on the investors about two years ago, with over $2.5 billion lost in crypto assets. It was such a hard pill for many invested persons to swallow, which also raised a red flag for the industry at the time.