As the appeal of cryptocurrency has grown, so has the opportunity for scammers to part naive investors from their money. 2019 has been no exception, with cryptocurrency and blockchain forensics company Ciphertrace dubbing it “the year of the exit scam.” Exit scams are not a new phenomenon, with a 2018 report conducted by Statis Group revealing over 80% of initial coin offerings (ICOs) in that year to have been fraudulent. Here, Cointelegraph explains exit scams and how to spot them, as well as a look at some of the biggest scams that have been discovered by various researchers. What are …

Bitcoin’s (BTC) recent price drop has not been caused by Bitcoin sell-offs from a $3 billion Chinese Ponzi scheme PlusToken, according to researchers at crypto analytics firm TokenAnalyst. Crypto analytics firm: PlusToken cannot be the cause As Bloomberg reports on Aug. 15, co-founder of London-based cryptocurrency analytics firm TokenAnalyst, Sid Shekhar, said that a Bitcoin dump by the PlusToken operators cannot be the cause of the recent price drop. Notably, the firm did not find any evidence that PlusToken moved any significant amounts of Bitcoin to any known exchange addresses. Shekhar said: “It doesn’t look like any of these addresses …

The hacker behind private user data allegedly stolen from cryptocurrency exchange Binance is preparing to release further material. Hacker “warming up” for leak In a series of tweets on Aug. 16, the Twitter account known as Bnatov Platon published an outline of Binance Know-Your-Customer (KYC) records allegedly in his or her possession. “Warming up,” an accompanying commentary reads. While no timeframe was given for the potential release, the hacker included records of Telegram chats, including with a user described as a member of Binance’s customer service team. Another appeared to show an attempt to trick the hacker into visiting a …

Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), says that a seemingly crypto-related entity called Cryptominingoptionsignal claims to be licensed in Luxembourg, but is not. In a warning notice dated Aug. 13, the country’s watchdog simply wrote: “The Commission de Surveillance du Secteur Financier (CSSF) warns the public of the activities of an entity named Cryptominingoptionsignal [...] The CSSF informs the public that Cryptominingoptionsignal is unknown to it and that the entity has not been granted any authorisation to provide investment services or other financial services in or from Luxembourg.” Innovation in Luxembourg As previously reported by …

Malware Smominru mines Monero (XMR) on at least half a million infected computers and now also steals sensitive personal data. An updated malware Cybersecurity company Carbon Black claimed that its Threat Analysis Unit “uncovered a secondary component in a well-known cryptomining campaign” in a report published on Aug. 7. According to the firm, the malware has now been updated to “also steal system access information for possible sale on the dark web.” Per the report, the update is part of a broader trend in malware development: “This discovery indicates a bigger trend of commodity malware evolving to mask a darker …

Authorities in Texas have issued a cease and desist order against an alleged crypto scammer operating on Craigslist. According to an Aug. 7 announcement, the Texas State Securities Board (SSB) enforced an emergency action against New York-based purported investment provider Forex and Bitcoin Trader. The SSB states that this is the fourth such action since the regulator started a second investigative sweep of suspect fraudulent crypto offerings in late June. Purported investment returns of 900% According to the Emergency Cease and Desist Order, Forex and Bitcoin Trader was advertising its investment scheme on Craigslist Dallas, promising a 900% return in …

Computer analysts at cybersecurity firm Zscaler ThreatLabZ have found a new type of trojan that targets cryptocurrency users. In a blog post published on Aug. 8, the company reveals that it identified a new remote-access trojan (RAT) that is able to capture administrative control of the targeted computer, retrieve browser history and look for activities involving cryptocurrency, credit cards, business, social media and others. The malware is called Saefko and is written in .NET, a software framework developed by Microsoft and used to develop a wide range of applications. The post further explains: “RATs are usually downloaded as a result …

About 15 global jurisdictions, including the G7 countries, will reportedly develop a system for tracking crypto transactions to prevent illicit uses of cryptocurrencies. The Financial Action Task Force (FATF) is planning to prepare detailed measures by 2020, according to a report by Tokyo-based newspaper Nikkei on Aug. 9. The new system intends to collect and distribute personal data on individuals who conduct crypto transactions in order to prevent funds from being used for illegal activities such as money laundering and terrorism financing, the report notes. While a number of global jurisdictions have not adopted regulatory frameworks in regard to the …

Chinese police are reportedly taking legal action against non-custodial token trading platform EtherDelta in connection with an apparent exit scam. The news was reported on Aug. 7 in a series of tweets published by Dovey Wan, founding partner at blockchain-focused investment firm Primitive Ventures. New Chinese owners allegedly used EtherDelta for exit scam ICO Wan’s tweets indicate that the alleged exit scam involved the sale of native exchange asset EtherDelta Token (EDT) following the acquisition of the exchange by unnamed Chinese investors: “The actual beneficiaries of EtherDelta are all Chinese after ownership transition in 2017 [...] Basically [the founder] Zack …

In a tweet Aug. 7, Changpeng Zhao described rumors circulating about the alleged Know-Your-Customer (KYC) data leak as an attempt to spread “FUD” (fear, uncertainty and doubt). “Don't fall into the ‘KYC leak’ FUD. We are investigating, will update shortly,” he wrote. Social media users had panicked earlier after what appear to be fake warnings showed figures posing with personal documents, apparently of Binance users. In an official statement, Binance said: “We would like to inform you that an unidentified individual has threatened and harassed us, demanding 300 BTC in exchange for withholding 10,000 photos that bear similarity to Binance …

Scam letters purporting to be from the United States Internal Revenue Service (IRS) are trying con cryptocurrency taxpayers and others out of their funds. According to a Forbes report published on Aug. 5, bogus letters are attempting to capitalize on the public’s lack of familiarity with legitimate IRS correspondence and soliciting payments by using threats of enforcement action against them, among other tactics. F is for fake Among the strategies used by the IRS scammers, some letters claim that a warrant has been claimed against the recipient due to their unpaid tax obligations. Failure to make a payment immediately, they …

North Korea has netted around $2 billion by hacking banks and cryptocurrency exchanges, according to the United Nations. UN: Hacked crypto funds weapons of mass destruction In a confidential report acquired by mainstream media outlets including Reuters on Aug. 5, the U.N. Security Council North Korea sanctions committee said that hackers formed an essential part of government funding. “Democratic People’s Republic of Korea cyber actors, many operating under the direction of the Reconnaissance General Bureau, raise money for its WMD (weapons of mass destruction) programs, with total proceeds to date estimated at up to two billion US dollars,” Reuters quoted …