A study carried out by SophosLabs in conjunction with cryptocurrency intelligence company, CipherTrace, revealed that sextortion scams are a profitable business. Between September 1, 2019, and January 31, 2020, nearly $500,000 in profits we gained by cybercriminals engaging in sextortion. According to the report, the modus operandi is that the scammers told victims through email that their computers were hacked and that they allegedly obtained information on their history of visits to pornographic pages. They then proceeded to extort the recipient of the message, asking for $800 worth of Bitcoin (BTC) as payment. Bigger criminal enterprises could be behind the …

The United States Commodity Futures Trade Commission (CFTC) has filed a complaint against Florida resident Alan Friedland for fraudulently raising $1.6 million through a cryptocurrency tied to a forex trading scheme. The April 16 filing accuses Friedland and his companies Fintech Investment Group, Inc and Compcoin LLC of illegally soliciting investments and publishing “untrue and materially misleading” press materials for its digital asset Compcoin from 2016 until 2018. ‘Proprietary trading algorithm’ The defendant claimed that Compcoin would allow customers to access Fintech’s proprietary trading algorithm ART and would deliver high returns on investment. Friedland falsely claimed that ART’s profit potential …

Popular Ethereum (ETH) block explorer Etherscan has launched a machine-learning powered surveillance engine to flag ETH and wallets that are associated with illicit activity. Wallets that have originated from illegal sources will now be blacklisted — allowing users to identify when coins they are receiving have a checkered history. Etherscan blacklists funds of illegal origin Etherscan announced its ETHProtect detection system in a blog post on April 14. ETHProtect will generate “daily user reports on suspicious fraudulent activities” which will be reviewed and verified by Etherscan’s security research analysts. The detection system is designed to identify funds associated with hacks, …

The Federal Bureau of Investigations (FBI) expects a rise in the number of crypto scams related to the coronavirus pandemic. In a April 13 press release, the FBI warned that the increase of “cryptocurrency-related fraud schemes” would only be facilitated by more people getting on board with crypto. The elderly are particularly vulnerable, but the agency is reporting people of all ages could be victimized by such scams. “There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial …

A trust has sued businessman, Brock Flagstad, over allegedly misappropriating over $2 million in funds that were purportedly designated for cryptocurrency trading. Despite Flagstad soliciting the funds for the purpose of digital asset trading, the James Streibich Revocable Trust accuses the businessman of siphoning money from the investment to fuel an exorbitant lifestyle involving private jets and luxury vehicles. Businessman accused of misappropriating over $2M The complaint has been brought against both Flagstad individually, and against seven companies operated by the businessman — levying allegations of fraud, theft, conspiracy, breach of contract, and breach of fiduciary duty. The trust asserts …

Data published on April 10 by blockchain forensics firm Chainalysis indicates that the average value of transactions received by the wallets of known scams fell 30% during March. Amid fraudsters’ attempts at leveraging COVID-19 fears to dupe victims into downloading malicious apps, donating to impersonations of charities, or purporting to peddle coronavirus cures, the coronavirus pandemic appears to have driven a sharp decline in crypto scammers’ revenues. The mid-March crash crypto market crash appears to have also impacted the incomes of crypto scammers. COVID-19 scams represent a small percentage of crypto fraud The report asserts that the total daily value …

A Bitcoin (BTC) trading scam has claimed the involvement of the Duke and Duchess of Sussex Prince Harry Charles Albert David and his wife Meghan Markle. According to an April 9 report by the Mirror, the royal couple was featured in a fake BBC article where they praised a Bitcoin trading scheme. The fake news piece claimed that the pair talked during a television show about a “wealth loophole” that can “transform anyone into a millionaire within three to four months.” According to the fake article, the scheme would play a role in the couple's very real intentions to step …

The Texas securities regulator has continued its crackdown on cryptocurrency scams, spotting an alleged fraudulent crypto firm that made fake claims about COVID-19 donations. On April 8, the Texas State Securities Board (TSSB) issued an emergency cease and desist order against Ultra Mining, alleging that the crypto mining firm is involved in diverse illicit activities including purportedly fraudulent claims to double investors’ money. As specified in an official TSSB notice, the Texas action was brought jointly with the Alabama Securities Commission to stop the ongoing illegal offering. According to the order, Ultra Mining is promising some “eye-opening returns.” As such, …

Russian authorities have detained a group of online criminals that reportedly sold massive amounts of counterfeit banknotes on the dark web in return for cryptocurrencies. According to an April 7 report from Russian news agency Kommersant, the criminal group has managed to sell more than 1 billion counterfeit Russian rubles, worth around $13 million as of press time. Criminals operated via Russia’s largest darknet marketplace As the country’s Ministry of Internal Affairs reported to Kommersant, the online perpetrators were operating currency counterfeiting via a darknet store on Russia’s largest darknet marketplace, Hydra. According to the report, the store was operating …

Amid the apparent global surge of cryptocurrency-related scams, New Zealand’s financial regulator has warned the public against another suspected Bitcoin (BTC) investment scam scheme. In an April 6 statement, the country’s major financial watchdog, the Financial Markets Authority (FMA), issued an official warning against “Profit Bitcoin” — an alleged get-rich-quick scam that promises returns by using software that “wins” Bitcoin trades with “99.4% accuracy.” Scam purportedly involved false claims from the New Zealand’s government The FMA noted that the entity and its website, theprofitbtc.com, have the “hallmarks of a scam,” emphasizing that Profit Bitcoin is not registered as a financial …

Three alleged cryptocurrency traders ran a Ponzi scheme which scammed more than 100 investors for over $35 million, according to a lawsuit filed by an entity formed by the victims in a federal court of Florida, United States. According to an announcement published on April 2, Q3 Investment Recovery Vehicle, who represents defrauded investors, accused the trio of alleged crypto traders of cheating victims by promising them a winning trading formula. Former NYSE and Wells Fargo workers among the accused The federal securities fraud case names three individuals as the primary perpetrators of the scheme. They include James Seijas, who …

French international soccer striker Kylian Mbappé filed a complaint on March 31 for the unauthorized use of his name on a cryptocurrency scam network, which is being investigated by local authorities. According to the newspaper L’Équipe, the soccer player, who plays for Paris Saint-Germain, is being impersonated to use his name in advertising campaigns for the alleged scam that involves a cryptocurrency acquisition scheme. These advertising posts cited false statements by Mbappé, where he allegedly claimed that the formula offered by the network was miraculous and that people could become a millionaire in two or three months. Fake advertising articles …