Category Archives: Cryptosweep

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Over $1 Billion Crypto Stolen Worldwide in Last 18 Months as GDPR Activates

The Anti-Phishing Working Group (APWG) estimate that over $1 billion (US) in crypto has been stolen since the start of 2017, states Blockchain Security Company — CipherTrace. This recent surge has led to numerous global investigations, aiming to bring the criminals resposible to justice.

According to CityWire, the UK’s Financial Conduct Authority is reported to have opened 24 investigations into cryptocurrency businesses. The investigations, some of which are the result of several whistleblower reports focus on regulatory compliance, states CoinTelegraph while citing the responses to Freedom of Information requests

The FCA has not mentioned names but claims that the investigations have been initiated into the companies in order to, “determine whether they might be carrying on regulated activities that require FCA authorization”

The cleanup is not unusual. Globally, regulators have been particularly active over past months with a focus on user protection, as the FCA point out, with investigations largely identifying “risk to consumers.”

The US-Canada “Operation Cryptosweep” is another such investigation underway, as reported recently by BitcoinNews. The focus of the North American operation is to target fraudulent investment programs, which to date has revealed 35 activities, the North American Securities Administrators Association (NASAA) announced.

In Singapore, the Central Bank has issued warnings to eight exchanges regarding securities law infringements and has halted the activities of one ICO token issuer.

Blockchain security company Cipher Trace suggests that the EU’s new General Data Protection Regulation (GDPR), which has now been activated, could reduce cybercrime. Cipher Trace claims that the new regulations could support these types of investigations due to critical ICANN WHOIS information.

Internet WHOIS data is a new resource for investigators comprising the Internet’s database of record, containing the names, addresses and email addresses of those who register domain names for websites on the Internet. Cipher Trace suggests that this data will become a crucial factor in recovering stolen funds and identifying criminals for eventual prosecution.

WHOIS is a fundamental resource for investigators and law enforcement officials who work to prevent these thefts. The Internet’s database of record is crucial in performing investigations that allow for the recovery of stolen funds, identifying the persons involved, and providing vital information for law enforcement to arrest and prosecute these criminals.

In the last year, $700M has been reported stolen by cybercriminals, and hundreds of millions of more thefts go largely unreported, according to the blockchain security company,

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 2017 Bad Year for Aussie Crypto Scams as US Launches ‘Cryptosweep’

The Australian Competition and Consumer Commission (ACCC) announced on Monday that consumers lost more than USD 2.1 million to cryptocurrency scams last year, CoinDesk reported.

Of this figure, the ACCC reported, consumers lost approximately USD 100,000 per month between January and September of 2017. These losses increased in December to USD 200,000 when Bitcoin price rose to nearly USD 20,000, recording losses of more than USD 700,000. The commission noted that these figures showed a correlation between the number of scams and the price of Bitcoin.

The common cause of consumer losses was due to scams involving fake ICOs, cryptocurrency pyramid schemes, and ransomware payments.

Although the figure is high, it was noted that scams overall last year Australians lost more than USD 340 million, with USD 64 million being lost to investment scams specifically last year.

Cryptocurrency fraud is by no means limited to Australia, with fraud occurring in all countries which have a crypto market. In North America, seven scams and hacks last year netted around USD 490 million of consumer funds for the criminals. The Wall Street Journal has reported that of the 1,450 ICOs it reviewed, 271 had “red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams”.

The North American Securities Administrators Association (NASAA) has launched its own task force to attempt to clean up the crypto space in the US and Canada, primarily by conducted thorough investigations of ICOs and cryptocurrency related products, according to CoinDesk.

The investigation, labeled ‘Operation Cryptoweep’ according to statements, has involved to date “nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month”.

The Texas State Securities Board (TSSB) conducted its own survey on cryptocurrency crime recently in an investigation involving 32 cryptocurrency investment plans over four weeks.  The report indicated that almost two-thirds of these promoters did not give investors a physical address and that five out of the 32 promoters did not disclose any investment risks, as well as the risk of cybersecurity threats and hacks, and instead simply promised gains of up to 40% every month.

Joseph Rotunda, the TSSB’s Enforcement Division director, commented that “the market for cryptocurrency investments is saturated with widespread fraud, and our work is only revealing the tip of the iceberg”.


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