Polish Crypto Exchange BitMarket Co-Owner Found Dead

Polish Cryptocurrency Exchange BitMarket Co-Founder, Tobiasz Niemiro has been found dead, as reported by the local news outlet Radio Olsztyn on 25 July. 

According to the local news, Niemiro was found dead in the city of Olsztyn near his residence, it was suggested that Niemiro had committed suicide. The local police stated that they found a wound in his skull, and the authorities claimed that they are still investigating the death case of Niemiro.

BitMarket had ceased its operation in early July. When trying to access the exchange website, users were greeted with the following message:

“Dear Users, We regret to inform you that due to the loss of liquidity, since July 8, Bitmarket.pl/net was forced to cease its operations. We will inform you about further steps.”

Niemiro told Money.pl during an interview that he fell victim to the exchange collapse incident. He said “I lost everything because somebody led to the collapse of the stock exchange. Now I’m losing face and good name for which I’ve worked all my life. I am one of the victims.”

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Browser Extensions Used by Scammers to Steal Bitcoin

According to Casa CEO Jeremy Welch, browser extensions ranging from text editing apps to wallpapers have been reported to be used by criminals to rip off unsuspecting individuals of their Bitcoin.

While Welch was speaking to an audience at the Baltic Honeybadger conference in Riga this weekend, he made emphasis on the hazards involved in the daily use of the internet for various activities including online transactions which could lead to the risk of exposing data to unscrupulous people on the internet.

He also made reference to the increase in the level of physical attacks on Bitcoin owners who are also at risk as retrieving funds could be impossible if successful. 

Welch listed 13 ways criminals can hijack Bitcoin from people. 

He examined quite a number of scenarios that could possibly play out from rogue employees to SIM card hijacking to compromised KYC data, demonstrating the level of importance in paying attention to cybersecurity.

According to Welch:

“Browser extensions pose major risks and it’s especially for web apps. We think the risks around browser extensions are being under-discussed at this point and we want to raise that discussion a little bit. How major are these risks?”

In his presentation, he showed how easily it could be for data to be released unknowingly through browser extensions into the hands of unscrupulous people and lead to loss of funds. The release of data could be as little as a Bitcoin wallet address searched on the blockchain.info website among others.

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Western Australian Police Force Seized 1.5 Million Worth of Crypto in a Drug Investigation

The Australian Border Force (ABF), the Western Australian Police Force announced that the force has arrested a 27-year-old man and a 25-year-old woman over drug probe, seizing and frozen an incredible amount of 1.5 million worth of cryptocurrency found in the electronic device held by the culprits.

According to the report, officers from the Australian Border Force (ABF) that alerted the Australian Federal Police and WA Police Force to the discovery. The real investigation was carried out by detectives from the WA Police Force’s Meth Transport Team.

“The ongoing partnerships between state and Commonwealth law enforcement agencies continue to provide WA Police Force with new intelligence and new lines of investigation to act on,” said Detective Senior Sergeant, Paul Matthews, Officer in Charge of the Drug & Firearm Squad.

The amount of cryptocurrency seized, according to Matthews, can be taken as the highest value the Western Australian Police Force has seized.

“While WA Police Force has seized millions of dollars’ worth of physical property and bank account assets in the course of several drug investigations, particularly those involving established criminal networks, the identification and freezing of over $1.5million of cryptocurrency in these circumstances highlights the current digital environment in which law enforcement agencies must operate.”

The report alleged that the culprits imported 27.5g of MDMA drug tablets and 27.5g of MDMA powder from the UK, which was concealed in a children’s toy painting kit. However, the police were able to identify the cryptocurrency by using their latest technologies and digital forensic techniques, which allow them to examine all availed means of holding financial assets. The said device targeted all forms of wealth, which were likely got from the illicit drug trade.

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Greece Council of State Rules for the Extradition of a Russian Bitcoin Laundering Suspect to France

Greece Council of State has ruled in favor of the order to extradite a Russian bitcoin laundering suspect named Alexander Vinnik, as known as “Mr. Bitcoin” to France, as reported by Greece Greek Reporter.

The Council’s ruling means that Vinnik’s extradition to France can now proceed without any further delay as he is seriously being sought by the authorities of three different countries which include: the United States, France, and Russia.

The report stated that Vinnik was arrested in northern Greece in July of 2017. It then noted that the authorities of the countries mentioned above have been after him and have in their different capacities issued international arrest warrants for him. The countries have charged him of using an e-currency platform he established up for money laundering activities.

Justice Minister Constantinos Tsiaras has previously ordered that Vinnik being extradited to the three countries he was accused of bitcoin laundering, starting with France, then to the United States and lastly to Russia. However, Vinnik filed a request to Greece Council of State, the country’s supreme administrative court, seeking that the court should annul the order of his extradition. Against Vinnik’s wish, the supreme court supported the order of Tsiaras, insisting that the minister has the full legal authority to outline the order of the countries to which the suspect will be extradited.

According to the press release, judge Athanasios Rantos, The Plenary of the Council of State, presided over by, considered that the Minister of Justice had wide discretion in ruling whether or not to order the extradition of the suspect.

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US Law Firms Had Data Stolen and Encrypted by Hackers Demanding Crypto Ransoms

There has been a recent report of an online breach in five United States law firms as it has been compromised by hackers demanding two 100 Bitcoins (over $933,000 at the time of this report) from each firm. The ransom demanded by the hackers was expected to be paid in parts, one to allow access to the data and another to delete the hackers’ copy of the data instead of selling it.

From the information coming from cybersecurity firm Emsisoft, Maze, the hacker group had already begun to execute their threat as they had started publishing some of the data they had stolen from the firms in parts. Two of the five firms had already been hacked on Feb.1.

The articles containing the stolen data had already been published on two sites, which remain undisclosed to protect the firms involved. Maze group has said that they would continue to reveal the stolen data as proof in increasing order of sensitivity with time until a response has been made from the firms before the leaks would stop.

Callow had said that the group had gone ahead to make the published data in Russian hacker forums with a note saying that the information should be used in any nefarious ways that they want. As a result of this, he believes that more data will be released with time unless the hacked firms pay. He also explained, “It seems highly unlikely that a criminal enterprise would delete what it may be able to monetize at a later date.”

Callow went further in his explanation to state that not only had the ransomware group been responsible for just encrypting data in the past, they had also been stealing them while exploiting their victims in the process.

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White House Budget Urges Legislation to Return Secret Service to Treasury Due to Crypto Crime Surge

‘A Budget for America’s Future’ has been published by the White House, which indicates the budget of the United States government of the fiscal year 2021. The document also states the information on the President’s priorities. 

President Trump’s ‘New Foundation for American Greatness’ aimed to balance the books by 2027, by pushing for an annual economic growth rate of three percent. The new budget proposes $4.829 trillion for the fiscal year of 2021, with annual spending expected to top $6 trillion by 2028.  

In the Department of the Treasury section, the document highlights that the department manages the US government finances, and promotes conditions that enable stable economic growth while protecting the integrity of the financial system and combating financial crimes and terrorist financing.  

Cryptocurrencies, and other technological advancements, projected as a threat to the international financial marketplace, the department believes has contributed to more groups of criminal organizations and more links between financial and electronic crimes combined.   

The budget read, “Technological advancements in the recent decades, such as cryptocurrencies and the increasing inter-connectedness of the international financial marketplace, have resulted in more complex criminal organizations revealed strong links between financial and electronic crimes and the financing of terrorists and rogue state actors.” 

The budget concludes that the US Secret Service be returned to Treasury to “create efficiencies in the investigation of these crimes and prepare the Nation to face the threats of tomorrow.” The US Secret Services was established first within the Department of Treasury and was transferred to the Department of Homeland to enable the protection of the nation from terrorism and other threats to US citizens. 

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Creating Corruption-Free Ecosystems with Blockchain: A Study

The Roman Empire was one of the greatest successes of human civilization. For most of its 1,000-years plus existence, Rome conquered and expanded across vast swathes of Europe, Asia, and North Africa, creating cultural, architectural, and societal imprints that last to the present day.

But such empire, mighty as it was, entered into a decline that led to its downfall around 480 AD.

The reasons for the fall of the Roman Empire are many and complex. Historians have debated the issue for centuries, and have put forward ideas such as invasion for well-organized and determined tribes, military overreach, cultural decay, and very significantly, corruption. 

One can argue that the Roman Empire’s decline began within itself, and more specifically, from the ruling classes. The rise of an autocratic system -which was, by and large, supported by the populace-, meant the advent of rigged elections, secret agendas, and political murders, among many other misdeeds. 

Corruption is, of course, not exclusive to the Roman Empire. Corruption is a man-made issue that has blighted many cultures, countries, and societies throughout history. And to a large extent, systemic and state-sponsored or abetted corruption and dishonesty are one of the most significant problems in today’s world.

The different forms of corruption

Roman law had a specific word to define political corruption: Ambitus. The term specifically referred to attempts to influence the outcome of an election through criminal practices, such as bribery, for example. Ambitus might be an archaic term, but its meaning certainly resonates in today’s political and social media landscape.

But corruption can take many other forms: Extortion, cronyism, cash-for-favors, slush funds, and so on. When it takes hold and becomes institutionalized, corruption develops into an endemic and systemic problem. Those living outside the inner circle can even come to accept it as part and parcel of daily life and live in resignation.

Deeply embedded corruption has a great detrimental effect on society. It may inhibit economic growth, for example, as funds earmarked for social projects might be redirected to malefactors. And corruption has a profound impact on foreign investment and business developments, as trust and prospects of prosperity are simply not there.

Corruption is an exclusively human trait. Animals kill each other for sustenance and to preserve their own species, but never for percentages. So when the very condition of humanity lies at the root of the problem, how can the riddle be solved?

Blockchain solutions for a very human problem

Malfeasance spreads across many shades of grey, and rooting out the bad actors can be difficult, depending on how widespread complicity is. 

One of the main allies of corruption at State and official agency level is the perception of impunity and anonymity by those engaged in the practice. In other words, those acting dishonesty can hide their deeds behind a wall of silence or veiled threats, which may, in some cases be abetted, or even encouraged by their superiors. Existing anti-corruption laws and legislations might not be particularly effective either, for the same reason.

One of blockchain technology’s inherent traits is transparency. Every node in the network can see every transaction, which instantly removes the possibility of interference. John P. Conley, a gifted economist, game theorist, and blockchain pioneer, proves this point, ‘Let’s take Bitcoin’s Proof-of-Work concept. Let’s say that we have 30,000 nodes that are validating transactions. How are they ever going to coordinate together and do something dishonest? The distribution of the nodes that are validating gives inherent stability. At least half would have to be dishonest for the system to break, but the notion that 15,000 nodes would coordinate to do something dishonest is ridiculous.’

Blockchain ensures that bad actors can no longer rely on anonymity to conceal their actions. Data stored on the blockchain is also immutable. In other words, it cannot be changed, nor can it be tampered with. Let’s take cadastral data, for example. That is, data about boundaries, property lines, and ownership. 

Cadastral corruption is not unheard of, particularly in emerging economies. Corrupt officials might alter land ownership or boundary records for their own benefit, or those of their cronies or associates. A blockchain framework would eliminate this type of crime by keeping a fully transparent and unchangeable block of land records.

Creating a decentralized anti-corruption framework built on the blockchain

Some define corruption as the abuse of entrusted power for private gain, and this is true. But fighting against it requires a more holistic approach.

Corruption often involves a cadre of individuals working in complicity, whereby one or two people might control a database, a set of bank accounts, or access to sensitive or confidential information, while the rest cover the tracks. The very centralization of today’s IT, banking, or land registry frameworks becomes its weakness.

Blockchain creates a decentralized environment that would remove the single point of failure conundrum, as data would no longer reside in just one or two easy-to-manipulate locations.

Conclusion

Society as a whole still has a long way to go to eliminate corruption from its fabric. It is, as we saw earlier, a purely human trait, much like greed or envy. And a man-made problem requires a man-made solution, such as blockchain.

The technology can help lift the veil of corruption through transparency, immutability, and decentralization, which are precisely the traits that make blockchain be.

 

Accused Co-Founder of $9 Million Crypto Ponzi Scheme Declares Not Guilty in Court

The Co-Founder of Zima Digital Assets, Zachary Salter and his associate, 28-year-old John Caruso jointly declared not guilty to charges of money laundering and conspiracy to attempt wire fraud during arraignment in an Arizona court on March 4.

A report explained the criminal charges leveled against the pair who allegedly operated a cryptocurrency-based investment scheme that was eventually used to defraud their customers of a huge $9 million now referred to as a classical Ponzi scheme besides the notorious OneCoin episode.

Mode of operation that aided the success of the scheme

Approximately $1.9 million in deposits were systematically returned to early investors as assumed investment returns. The purported profits served as a means to validate the scheme to lure in participants which eventually resulted in a further wave of deposits to the platform.

The remaining funds totaling $7 million was spent in a lavish manner by the co-founders who now stand trials. Vacationing, purchase of luxurious cars, rentals of private jets, and gambling habits were the highlights of both accused. Despite flaunting such a lavish lifestyle on social media, the pair claimed now taxable income.

The accused successfully defrauded more than 90 investors including elderly citizens and former professional baseball players. Both men were arrested on Jan. 30 this year and are now charged by criminal complaint with conspiracy to commit wire fraud and money laundering among the charges leveled against them

Guilty or not Guilty?

The indictment included allegations of false statements in investor contracts and misinterpretations in direct messages to clients and both have pleaded not guilty. Caruso separately pleaded not guilty during his initial arraignment on Feb. 26. He also has a pending criminal record and was last released from prison in 2017.

Having pleaded not guilty, both men will now face a jury trial on July 4, 2020. If found guilty of the charges leveled against them, Salter and Caruso will have the properties allegedly obtained from the Ponzi scheme forfeited.

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Two Canadian Nationals Face Two Years in US Prison for Alleged Bitcoin Fraud

The US Department of Justice has sentenced two Canadian nationals to two years in the US federal prison for using a fake Twitter account to steal Bitcoins from an innocent US victim

According to the statement shared by the US Department of Justice, on March 17, 24-year-old Jagroop Singh Khatkar and 23-year-old Karanjit Singh Khatkar were sentenced to two years in federal prison and three years of supervised release after conspiring to commit fraud in a scheme to steal 23.2 Bitcoins from an Oregon resident.  

Fraudsters impersonate HitBTC customer service representatives on Twitter

The two perpetrators are residents of Surrey, British Columbia, Canada, and they operated the illegal scheme designed to steal money from October 2017 until August 2018.  Since then, there have been new regulation changes in Canada. 

The British Columbia residents created a twitter account acting under the handle “@HitBTCAssist,” to pose as HitBTC staff. They, therefore, tricked potential victims into thinking that they were communicating with a customer service representative from the popular Hong Kong-based crypto exchange HitBTC.

Eventually, an Oregon resident sent an inquiry to the fake twitter account inquiring how she can go ahead and withdraw Bitcoins from her HitBTC account. The Khatkars convinced her to forward sensitive information associated with her email and HitBTC account. The two then managed to transfer 23.2 Bitcoins (valued $119,000 today) from the victim’s HitBTC account to Karanjit Khatkar’s wallet on the Kraken exchange.

The scammers, after committing the theft, divided the stolen Bitcoins equally and proceeded to spend the funds on a lavish lifestyle involving luxury vehicles and high-end casinos. Karanjit bought a Mercedes-Benz for almost $40,000. He also spent tens of thousands of dollars doing gambling in luxurious casinos in Las Vegas.

In July 2019, Karanjit was, however, arrested at the McCarran International Airport in Las Vegas. Jagroop later on voluntarily appeared for his arraignment. In December 2019, they both pleaded guilty to conspiring to commit money laundering and wire fraud. They were ordered to pay the victim a total of $184,511 restitution.   

Crypto theft alarming rate

According to CipherTrace, a blockchain forensic firm, the crypto sector lost over $4.4 billion in thefts and scams in 2019, up by more than 150% from $1.7 billion in 2018. Crypto theft has increased because malpractices have been happening through cryptocurrency exchanges. However, regulatory authorities have increased their oversight of digital assets across the world as market participants are seeking to penetrate the crypto space. For example, know your customer regulation is helping to trace, capture, and persecute crypto scammers. 

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Venezuelan President Maduro Leveraged Cryptocurrency to Conceal Drug Ring Transactions According to US DOJ

The United States Department of Justice (DOJ) have alleged that Venezuelan President Nicolas Maduro leveraged crypto in illegal drug trade according to the March 26 indictment.Maduro along with 14 other high-ranking Venezuelan officials has been charged for his alleged involvement in a multibillion-dollar cocaine trafficking ring that the DOJ claimed wreaked havoc on American communities by flooding the markets with cocaine for over 20 years. The allegations extend to drug runners, Colombian cartels, and the overall corruption that has plagued Venezuala’s governance.“These indictments expose the devastating systemic corruption at the highest levels of Nicolas Maduro’s regime,” said DEA Acting Administrator Uttam Dhillon. “These officials repeatedly and knowingly betrayed the people of Venezuela, conspiring, for personal gain with drug traffickers and designated foreign terrorist organizations like FARC. Today’s actions send a clear message to corrupt officials everywhere that no one is above the law or beyond the reach of U.S. law enforcement.”Venezuela’s Crypto SuperintendentAccording to the announcement, Homeland Security Investigations (HSI)  Acting Executive Associate Director Alysa D. Erichs said the Venezuelan officials had leveraged cryptocurrency in an attempt to mask their money trail on their alleged crimes.Per the release, “Today’s announcement highlights HSI’s global reach and commitment to aggressively identify, target and investigate individuals who violate U.S. laws, exploit financial systems and hide behind cryptocurrency to further their illicit criminal activity. Let this indictment be a reminder that no one is above the law – not even powerful political officials.While no specific cryptocurrency was named, Venezuela is known for the Petro cryptocurrency which is backed by oil. Notably the announcement also revealed that Venezuela’s crypto superintendent, Joselit Ramirez Camacho had also been indicted in a separate action in the Southern District of New York. Camacho is the head of  Sunacrip – a regulating authority in Venezuela of Crypto assets heavily involved with the maintenance of the Petro.

 

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