Tag: victims

European Union Parliament Considers Petition for Crypto Fraud Victims Fund

The European Union (EU) Parliament is considering a petition filed by a consortium of individuals, organizations and companies that seeks to establish a restitution fund for victims of crypto fraud.

The EU Parliament has announced that they are considering a petition submitted by a consortium of crypto fraud victims. The objective of the petition is to seek for the establishment of a restitution fund for victims of crypto fraud.

The victims represented by their lawyer, Dr. Jonathan Levy, have suffered losses exceeding €40 million and like tens of thousands of other crypto crime victims worldwide have been unable to recover their funds through law enforcement, national regulatory authorities or the courts.

In the petition, Dr. Levy urges the European Parliament to act directly to help the victims of crypto-active crimes as part of its EU strategy for the creation of a genuine single market for digital financial services.

The petition has been submitted to the EU Parliament—with the EU indicating that it will institute EU wider regulation of crypto assets to be phased in by 2022. Under the current EU rules, there are no provisions for victims of crypto crimes which usually range between fraud, extortion, money laundering, and cyber attacks.

The EU projects that the annual losses to individuals, organizations, and companies as a result of crypto-related crimes are in the billions of Euros and constitute a “massive transfer of wealth to organized crime firms.”

According to the EU announcement, the consortium of victims includes: disabled and elderly victims being preyed upon by crypto scammers posing as brokers. An American investor whose crypto wallet was hacked and nearly 1000 Bitcoins sent to a criminal operation; and, companies and individuals from Europe, America, Africa, Asia, and Australia who were deceived into investing in fraudulent crypto-asset funds, nonexistent crypto mining operations, and deceptive ICOs by seemingly legitimate companies registered in England and Germany.

The consortium also includes victims of some of the more notorious crypto Ponzi schemes like OneCoin, as well as numerous offshore online casinos and FOREX platforms that use crypto to evade AML and consumer protection laws.

Hacker moves stolen funds after bounty launch

A hacker responsible for a $196 million attack on Euler Finance has moved some of the stolen funds into the crypto mixer Tornado Cash, just hours after a $1 million bounty was launched to identify the perpetrator. The attack, carried out through a flash loan on the Ethereum noncustodial lending protocol, resulted in the theft of a range of cryptocurrencies including Dai, USD Coin, staked ETH and wrapped Bitcoin. Blockchain analytics firm PeckShield reported on Twitter that the hacker had transferred 1,000 ETH, equivalent to around $1.65 million, via the sanctioned mixer. Euler Labs had previously sent a message to the attacker’s address warning of the bounty and offering amnesty if 90% of the funds were returned within 24 hours. However, the hacker’s movement of funds suggests that they are not swayed by this offer.

Victims of the attack have been appealing for the return of their funds, with one message on the blockchain claiming that a group of 26 families from jobless rural areas had lost a total of $1 million in the attack. Another message was sent by an apparent victim who congratulated the hacker on their “big win”, but begged for help as they had invested funds they “desperately needed” for a house. “My wife is going to kill me if we can’t afford our house. Is there anyway you can help me? I have no idea what to tell my wife,” they wrote.

The hacker’s use of a crypto mixer is a common tactic for obscuring the source of funds, and is likely to make it harder for authorities to identify them. However, the blockchain trail may still provide some clues, and the bounty may encourage individuals to come forward with information. The incident highlights the risks associated with DeFi and the importance of robust security measures.

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