A&D Forensics Brief, June 28, 2024
A&D Forensics
Financial and Blockchain Intelligence Consulting, Blockchain Forensics, Crypto Investigations and Training Firm.
In Q2 2024, crypto losses from hacks and scams surged by 113% to reach $572 million, up from $220 million in Q2 2023. Centralized exchanges bore the brunt, with major incidents like the $305 million DMM hack and the $55 million BtcTurk hack contributing significantly. Centralized protocols accounted for 70% of the total losses, while decentralized finance protocols saw a 25% decrease in losses compared to Q2 2023. Ethereum and BNB Smart Chain were the most targeted networks, highlighting ongoing security challenges in the crypto ecosystem.
The U.S. State Department issued a $5 million bounty on OneCoin’s ‘Cryptoqueen’.
Ruja Ignatova, known as the "Cryptoqueen," remains at large after disappearing in 2017 following the exposure of OneCoin, a $4 billion Ponzi scheme. The U.S. State Department has offered a $5 million reward for information leading to her capture or conviction. Ignatova's scheme promised huge returns but operated without a blockchain, making it one of the largest frauds in history. While some associates were arrested, including co-founder Karl Greenwood, Ignatova's whereabouts remain unknown amid speculation and unverified reports. She faces multiple charges internationally, including wire fraud, money laundering, and securities fraud.
Nigeria SEC issued a 30-day deadline for crypto firms to re-register or Face Enforcement Action.
The Securities and Exchange Commission (SEC) of Nigeria mandated crypto exchanges and digital asset traders to re-register within 30 days, updating regulations amid global trends. Despite past banking restrictions, Nigeria ranked second globally in crypto adoption. The SEC aimed to enhance oversight against fraud and currency risks by introducing the Accelerated Regulatory Incubation Program (ARIP) for Virtual Asset Service Providers (VASPs) to update digital asset rules.
Australia’s 7news was hacked on YouTube to promote a crypto scam with deep fakes.
The YouTube channel of Australia's major broadcaster, 7News, was hijacked by crypto scammers who livestreamed a deep fake of Elon Musk discussing cryptocurrency. The channel was altered to appear as Tesla's and featured an AI-generated fake of Musk promoting a fraudulent "double-your-money" crypto scheme. At its peak, the livestreams attracted approximately 150,000 viewers, though it's unclear how many were legitimate. Seven Network, the parent company, is investigating the incident with YouTube to restore normal operations.
Coinbase sued SEC and FDIC over Freedom of Information Act(FOIA) requests.
Coinbase filed lawsuits against the United States Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) accusing them of failing to comply with FOIA requests and attempting to exclude the crypto industry from the banking sector. The FOIA requests sought information on Ethereum’s shift to a proof-of-stake consensus mechanism and previous investigations involving Zachary Coburn and Enigma MPC. Coinbase claims that federal regulators have been using all available tools to undermine the digital-asset industry, and the lawsuits aim to uncover the FDIC’s role in this effort.
MakerDAO Delegate lost over $11 million to a permit phishing scam. A MakerDAO governance delegate lost $11 million worth of Aave Ethereum Maker (aEthMKR) and Pendle USDe tokens in a phishing scam after signing multiple phishing signatures. Scam Sniffer detected the incident in the early hours of June 23. The phishing scam exploited the delegate, a key player in the MakerDAO system, who contributes to decision-making processes by voting on governance proposals, polls, and executive votes. The scam involved transferring 3,657 aEthMKR tokens from the sender address.
Abra and CEO Barhydt settled with 25 US states over licensing violations.
Abra, its associated companies, and CEO William Barhydt settled with 25 U.S. states for operating an unlicensed crypto mobile app. Following an investigation by state regulators, Abra agreed to pay $250,000 per state for customer repayment costs and return up to $82.1 million in assets to customers. Barhydt will refrain from money transmitter activities in these states for five years. The settlement was led by Washington and involved multiple states, with the potential for others to join.
1,590 CoinStats crypto wallets were affected in a security breach.
CoinStats, a cryptocurrency portfolio manager, experienced a security breach affecting 1,590 crypto wallets. The incident prompted CoinStats to temporarily suspend its application to address the breach, which has since been mitigated. They assured users that no connected wallets or exchanges were impacted. CoinStats will provide updates on the situation as more information becomes available. The platform emphasizes that user holdings, accessed in read-only mode, remain secure.
Florida Man Found Guilty in Series of Cryptocurrency Theft Cases Involving Violence.
A Florida man, Remy St Felix, has been convicted for leading a violent spree of cryptocurrency thefts involving aggressive home invasions targeting crypto owners across multiple states. St Felix orchestrated the crimes between September 2022 and July 2023, involving kidnappings, assaults, and coercion to steal cryptocurrency. He faces sentencing in September, with potential imprisonment ranging from seven years to life.
BtcTurk Suffered a $54M Hack, and Binance Blocked $5.3M in Stolen Cryptocurrency.
BtcTurk, a Turkish crypto exchange, confirmed a hack affecting ten hot wallets with various cryptocurrencies, prompting a suspension of deposits and withdrawals for investigation. They are collaborating with law enforcement after approximately $55 million in assets were stolen. The perpetrator also sold significant amounts of cryptocurrencies like Luna Classic, causing price fluctuations. Binance, under new CEO Richard Teng, froze $5.3 million of the stolen funds.
