Blockchain & Cryptocurrency , Cryptocurrency Fraud , Fraud Management & Cybercrime
Cryptohack Roundup: $20.5M Indodax Theft
Also: Angel Drainer Resurfaces; Russia's Sanctions Evasion PloyEvery week, Information Security Media Group rounds up cybersecurity incidents in digital assets. This week, Indodax was hacked, Angel Drainer resurfaced, Russia developed Infra crypto, GS Partners settled with U.S. states, Caroline Ellison to be sentenced Sept. 24, FCA prosecuted first unregistered crypto case, Nigeria set new crypto regulations, and India may approve offshore crypto firms.
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$20.5M Indodax Hack
Hackers exploited Indonesian cryptocurrency exchange Indodax to steal about $20.5 million, reportedly targeting Indodax's hot wallets. Blockchain security firm PeckShield said it detected $15.7 million in large cryptocurrency outflows from the company. Indodax acknowledged potential security issues and temporarily suspended its platform for maintenance but said that client funds, both in crypto and rupiah, remained safe.
Angel Drainer Returns as AngelX
Phishing toolkit Angel Drainer reportedly resurfaced as AngelX, a more advanced version that has deployed over 300 malicious decentralized applications, said blockchain security firm Blockaid. AngelX targets users on newer, less secure blockchains such as The Open Network and Tron. Since its launch on Aug. 31, security practitioners detected more than 150 scams, despite the system's high evasion rate. Angel Drainer scams have resulted in the theft of around $25 million in crypto assets in the past.
Russia Develops Crypto Infra to Bypass US Sanctions
The Central Bank of Russia is developing crypto-based financial infrastructure to bypass Western sanctions, Chainalysis said in its policy and regulation report. Laws signed by President Vladimir Putin on Aug. 8 legalize crypto mining and permit cryptocurrency use in international trade. Trials start this month. The CBR will oversee cross-border crypto transactions and test the digital ruble, set to launch in 2025. Russia aims to reduce reliance on the U.S. dollar, using domestic exchanges to process trades and potentially facilitate sanctions evasion through platforms such as Bitzlato, Garantex and Exved.
GS Partners Settles With 5 US States
Crypto investment platform GS Partners settled with regulators in Texas, Alabama, Arizona, Arkansas and Georgia to refund investors all funds it allegedly defrauded by misrepresenting expected profits and risks of loss, said the Texas State Securities Board. The Josip Heit-led company will not face any monetary penalties and will cease offering unregistered securities. Other states are also eligible to join the settlement on the same terms, the company's lawyers said.
Sentencing Set for Former Alameda CEO
Former CEO of Alameda Research Caroline Ellison is set to be sentenced on Sept. 24 after pleading guilty in December 2022 to charges related to the collapse of sister company FTX. The charges against her include conspiracy to commit wire fraud and money laundering, which could carry a maximum sentence of 110 years, although her cooperation with prosecutors may result in leniency. Other FTX executives, Gary Wang and Nishad Singh, are also awaiting sentencing. Ellison's former partner, Sam Bankman-Fried, is serving a 25 year prison sentence, currently in the Brooklyn Metropolitan Detention Center.
FCA Prosecutes 1st Unregistered Crypto Activity Case
The U.K. Financial Conduct Authority charged 45-year-old Olumide Osunkoya for unlawfully operating multiple crypto ATMs without registration. These ATMs processed 2.6 million pounds from December 2021 to September 2023 without the required approval. This is the FCA's first criminal prosecution for unregistered crypto activity under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Osunkoya is set to appear in court on Sept. 30.
Nigeria's New Crypto Regulations
Nigeria's Securities and Exchange Commission will begin enforcement against businesses and individuals involved in unregulated cryptocurrency activity, Director-General Emomotimi Agama reportedly said. The agency's oversight will also include compliance with anti-money laundering and anti-terrorism financing protocols. Only two exchanges, Busha Digital and Quidax Technologies, are currently licensed to operate in the country. Agama said that clear regulation to safeguard investors was necessary due to the growing interest in digital assets among young Nigerians.
India May Approve More Offshore Crypto Firms
India's Financial Intelligence Unit is reportedly considering approving two undisclosed offshore crypto exchanges to resume operations in the country. The FIU, responsible for enforcing anti-money laundering compliance, is reviewing requests from four unnamed and previously banned exchanges. Following the FIU registration of Binance and KuCoin, at least two other exchanges may be allowed to operate by the end of financial year 2025 after undergoing transaction visibility and suspicious activity reviews. Earlier this year, India blocked nine exchanges for AML noncompliance, but Binance and KuCoin have since re-registered, and Binance reportedly paid a $2 million penalty.