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Crypto Exchange Bitgrail Founder Accused by Italian Police of Faking Hacks That Led to Company’s Bankruptcy

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Crypto Exchange Bitgrail Founder Accused by Italian Police of Faking Hacks That Led to Company's Bankruptcy

Italian police accused a man who ran a cryptocurrency exchange of being responsible for a series of hacks that caused millions in losses as part of an alleged massive fraud scheme.

Italian Authorities Accuse Bitgrail Owner of Faking Hacks That Led Exchange’s Bankruptcy

According to Reuters, the 34-year-old from Florence known by his initials F.F. and owner of Bitgrail, a crypto company that was declared bankrupt in 2019, is suspected of having faked a cyberattack that defrauded over 230,000 people which held nano coin, Bitgrail’s own crypto launched in 2015.

The series of alleged fake hacks reportedly caused losses of 120 million euros ($146 million), and the individual faces charges of computer fraud, fraudulent bankruptcy, and money laundering. In a statement, Italian authorities said that such a case could be categorized as the “biggest cyber-financial attack in Italy and one of the world’s biggest.”

The report details that F.F. himself reach out to the police in February 2018 to report the hack and the loss of a “huge” amount of nano coin, but Ivano Gabrielli, director of the national center for cyber crimes (CNAIPIC), started to suspect that the 34-year-old man was involved.

The authorities’ statement adds:

For the first time in Italy and in Europe, we have documented fraudulent and rapacious conduct to the detriment of investors carried out entirely on IT platforms and via the use of virtual currencies.

Did F.F. Participate Actively in the Hacks?

However, Gabrielli stated that it was not yet clear whether F.F. participated actively in the theft “or if he simply decided not to increase security measures after discovering it,” as the police believed it would have been easy to prevent the theft in a first instance.

Back on January 21, 2019, F.F. was sentenced by the Italian Bankruptcy Court to return as much of the assets to his customers as possible. The Italian authorities also managed to seize over $1 million in personal assets, including his car.

What do you think about the allegations in the Bitgrail case? Let us know in the comments section below.

The post Crypto Exchange Bitgrail Founder Accused by Italian Police of Faking Hacks That Led to Company’s Bankruptcy appeared first on Bitcoin News.

Crypto Exchange Cashaa Loses 336 Bitcoin Worth $3 Million to Hackers

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Crypto Exchange Cashaa Loses 336 Bitcoin Worth $3 Million to Hackers

Cryptocurrency exchange Cashaa says it has lost 336 bitcoin (worth around $3.1 million) to hackers.

The London-based platform has now ceased all crypto-related transactions, including withdrawals and deposits, as investigations into the breach get underway.

In a tweet on July 11, Cashaa claimed that the hacker attacked one of its Blockchain.com wallets, which is used to store bitcoin (BTC) and make transfers from the exchange.

The attacker is believed to have implanted malware into one of the exchange’s computers. And as an employee accessed the machine the afternoon of July 10 to make two distinct transfers, the hacker pounced, making off with 336 BTC, valued at more than $3.1 million at current market prices. All this happened in a matter of minutes, between 1:23 pm and 1:26 pm.

“We are still investigating the damage caused by the incident and suspend all the withdrawals for 24 hours,” Cashaa chief executive officer Kumar Gaurav was quoted as saying by industry media.

“We have called the board meeting to decide whether the company will bear all the losses,” he added.

The funds were allegedly sent to the bitcoin address: 14RYUUaMW1shoxCav4znEh64xnTtL3a2Ek, said the exchange. There’s some evidence that suggests coin mixture software is being used to transfer the money and limit traceability

Cashaa suspects the hacker is from east Delhi, India, and has subsequently made a report with the Delhi police cyber crime department.

The company, which also provides financial services to crypto businesses, stated that it had reported the hacker address to “all crypto exchanges” as part of efforts to prevent the alleged thief from using the money.

“All top exchanges and our partners have joined together to give out a strong message to hackers that cashing out hacked #bitcoin is not going to be easy. Thanks to @NischalShetty @CoinDCX @bitbns @binance @WazirXIndia for the quick action,” Cashaa said in the tweet.

Kumar Gaurav, the Cashaa CEO, appeared to blame exchanges that allow trade of stolen funds.

“Everyone working in the crypto industry has to work very hard to bring the same level of security which currently an average person has when dealing with a bank account,” he charged, without mentioning any specific platform.

“As of today, hackers are very confident to hack crypto addresses and move it through exchanges that are facilitating such laundering through their systems. Exchanges like these must be shut down and owners of these exchanges should be charged with money laundering facilitation crime,” Gaurav moaned.

What do you think of the Cashaa hack? Let us know in the comments section below.

The post Crypto Exchange Cashaa Loses 336 Bitcoin Worth $3 Million to Hackers appeared first on Bitcoin News.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency

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US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency

The U.S. government has charged two Chinese nationals involved in laundering stolen cryptocurrency worth $100 million from an exchange allegedly for the benefit of North Korea. They are linked to the U.S.-designated North Korean state-sponsored Lazarus Group. A total of 113 cryptocurrency accounts and addresses used to launder funds have been identified.

Also read: SEC Karate-Chops Steven Seagal Over Promoting Cryptocurrency Touted as the Next Gen Bitcoin

US Sanctions Two Chinese Nationals

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced Monday that it has sanctioned two Chinese nationals involved in laundering stolen cryptocurrency from an exchange.

Tian Yinyin (田寅寅) and Li Jiadong (李家东) “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, a malicious cyber-enabled activity” and the Lazarus Group, the OFAC alleged. The Lazarus Group is a U.S.-designated North Korean state-sponsored cyber group.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency
The U.S. Department of the Treasury’s Office of Foreign Assets Control has sanctioned two Chinese nationals involved in laundering stolen cryptocurrency.

“North Korea continues to attack the growing worldwide ecosystem of virtual currency as a means to bypass the sanctions imposed on it by the United States and the United Nations Security Council,” Internal Revenue Service-Criminal Investigation Chief Don Fort claims.

Crypto Exchange Hack

The Treasury explained that the Lazarus Group leveraged malware code from the now-defunct cryptocurrency application Celas Trade Pro, creating illegitimate websites and malicious software to conduct phishing attacks against the cryptocurrency sector.

In April 2018, an employee of an unnamed exchange downloaded the malware through an email, giving the hackers remote access to the exchange and unauthorized access to customers’ personal information, including private keys used to access crypto wallets stored on the exchange’s servers. The hackers used the private keys to steal cryptocurrencies worth $250 million at the time, the department added, noting:

DPRK malicious cyber proceeds are often transferred to cryptocurrency exchanges and peer-to-peer marketplaces with negligible customer screening compliance programs, or individual peer-to-peer or over-the-counter traders operating on exchanges that do not screen their customers.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency
The U.S. government explained that North Korea continues to attack the cryptocurrency sector as a means to bypass the sanctions imposed on it by the U.S. and the U.N. Security Council.

Tian and Li Charged for Laundering Over $100 Million

In a separate announcement on Monday, the U.S. Department of Justice (DOJ) declared that the two Chinese nationals have been charged with laundering over $100 million worth of cryptocurrency from the cryptocurrency exchange hack.

Tian and Li allegedly received approximately $91 million stolen in an April 2018 hack of a cryptocurrency exchange and an additional $9.5 million from a hack of another exchange from accounts controlled by the Democratic People’s Republic of Korea (DPRK). According to the DOJ, between December 2017 and April 2019:

The funds were then laundered through hundreds of automated cryptocurrency transactions aimed at preventing law enforcement from tracing the funds. The North Korean co-conspirators circumvented multiple virtual currency exchanges’ know-your-customer controls by submitting doctored photographs and falsified identification documentation.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency
The cryptocurrency exchange hack’s flow of funds showing $250 million worth of cryptocurrency stolen, sent to four exchanges. Source: U.S. Treasury

The Treasury continued to explain that Tian moved the equivalent of more than $34 million of stolen funds in Chinese yuan through a bank account linked to his exchange account and transferred nearly $1.4 million dollars’ worth of bitcoin into prepaid Apple iTunes gift cards.

The defendants conducted business in the U.S. but at no time registered with the Financial Crimes Enforcement Network (FinCEN), the DOJ noted, adding that “the pleadings further allege that the North Korean co-conspirators are tied to the theft of approximately $48.5 million worth of virtual currency from a South Korea-based virtual currency exchange in November 2019.” The department added:

The civil forfeiture complaint specifically names 113 virtual currency accounts and addresses that were used by the defendants and unnamed co-conspirators to launder funds. The forfeiture complaint seeks to recover the funds, a portion of which has already been seized.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency
A U.N. report estimates that North Korea had attempted to steal as much as $2 billion, $571 million of which is in cryptocurrency.

North Korea’s Hacking History

A U.N. Security Council report released in August 2019 estimates that North Korea had attempted to steal as much as $2 billion, of which $571 million is attributed to cryptocurrency theft. Noting that the $250 million was “nearly half of the DPRK’s estimated virtual currency heists that year,” the Treasury asserted that “This revenue allows the North Korean regime to continue to invest in its illicit ballistic missile and nuclear programs,” elaborating:

North Korea’s malicious cyber activity is a key revenue generator for the regime, from the theft of fiat currency at conventional financial institutions to cyber intrusions targeting cryptocurrency exchanges.

To combat these risks, the Financial Action Task Force (FATF) amended its standards in June last year to require all member countries to regulate and supervise cryptocurrency service providers, including exchanges. Recently, the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) revealed a cryptocurrency intelligence program targeting peer-to-peer (P2P) platforms, forums, and darknet markets.

US Charges North Korea-Linked Chinese Nationals for Laundering Over $100 Million in Stolen Cryptocurrency
The U.S. Department of Justice has separately charged two Chinese nationals with laundering over $100 million in cryptocurrency. Overall, more than $250 million was allegedly stolen by North Korean hackers.

Cryptocurrency service providers and traditional financial institutions should remain vigilant and alert to substantial changes in customers’ activities, as their business may be used to facilitate the transfer of stolen funds, the Treasury warns. “The United States is particularly concerned about platforms that provide anonymous payment and storage functionality without transaction monitoring, suspicious activity reporting, or customer due diligence, among other obligations.” The department noted:

DPRK cyber actors actively target the cryptocurrency community and are known to employ a variety of fake cryptocurrency trading programs that contain malware.

What do you think of the U.S. taking action against two Chinese nationals for allegedly laundering millions of dollars worth of stolen cryptocurrency? Let us know in the comments section below.

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Images courtesy of Shutterstock and the U.S. government.

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