Professional scam organizations are targeting cryptocurrency users following the collapse of FTX, initiating millions of automated calls and text messages in an attempt to swindle information and funds. Clayton LiaBraaten, senior executive adviser at Truecaller — an app that helps identify scam callers and messages — spoke to Cointelegraph, scammers often closely follow crypto news to better prey on their victims: “Fraudsters love volatility and current events. Anytime they can try to surf the contours of something very disruptive in the marketplace they have a great deal of success.” LiaBraaten said that Truecaller also saw an increase in scam communications …

Hong Kong police arrested two executives of the crypto exchange AAX accused of fraud and misleading the police, according to local media reports. The former CEO of AAX, Weigao Capital Liang Haoming, and the founder of AAX, Thor Chan, were arrested on Dec. 23. Local authorities accused the company's head of declaring "system maintenance" as an excuse to delay customers from withdrawing assets amid liquidity issues. One of the executives also lied to the police about the timeline of his activities in the company, deliberately misleading enforcement authorities, the police investigation revealed. Two bank accounts of AAX as well as …

Karl Sebastian Greenwood, the co-founder of the multi-billion dollar fraudulent cryptocurrency scheme OneCoin has pleaded guilty to multiple charges brought forward by the United States Department of Justice (DOJ) and faces a maximum of 60 years in prison. The DOJ announced on Dec. 16 that Greenwood submitted a guilty plea in a Manhattan federal court to charges of wire fraud, wire fraud conspiracy and money laundering conspiracy with each charge carrying a maximum potential sentence of 20 years in jail. U.S. Attorney Damian Williams said Greenwood operated “one of the largest international fraud schemes ever perpetrated” and claimed he touted …

More than 350 fraudulent cryptocurrency tokens were created per day this year, defrauding millions of investors, according to blockchain risk monitoring firm Solidus Labs. From the start of the year to Dec. 1, 117,629 “scam tokens” were deployed according to Solidus’ 2022 “Rug Pull Report.” That’s a 41% increase from the nearly 83,400 scam tokens Solidus detected in 2021. It marks the largest year on record for fraudulent tokens since the firm began monitoring in Sep. 2020. The report cited the BNB Chain as harboring the greatest number of scam tokens, claiming 12% of all BEP-20 tokens are scams. The …

According to Bahamian court records filed on Dec. 14, Ryan Salame, the former co-CEO of FTX Digital Markets told the Securities Commission of the Bahamas (SCB) on Nov. 9 that FTX was sending customer funds to its sister trading firm Alameda Research. He also told the SCB only three people had the access required to transfer client assets to Alameda: Former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao “Gary” Wang and FTX engineer Nishad Singh. The allegation spurred SCB executive director Christina Rolle to contact the commissioner of the Royal Bahamas Police Force to request an investigation. Related: Realized losses …

Damian Williams, United States Attorney for the Southern District of New York, said the investigation leading to charges against former FTX CEO Sam Bankman-Fried had been “very, very fast” but prosecutors were “not done” with arrests. In a press conference livestream on Dec. 13, Williams said the timing of the arrest of Bankman-Fried had been based on progress from law enforcement officials, who authorized charges on Dec. 7 and indicted the former FTX CEO on Dec. 9, leading to a warrant being executed in the Bahamas on Dec. 12. An eight-count indictment released on Dec. 13 revealed U.S. authorities alleged …

Merely hours before news of his arrest by Bahamian police, Sam Bankman-Fried took to Twitter denying his involvement or knowledge of a secret group chat named “Wirefraud” — which allegedly involved former FTX and Alameda ranking executives. In a Dec. 12 response to a report from the Australian Financial Review (AFR), Bankman-Fried used Twitter to deny involvement in or knowledge of a “Wirefraud” group chat on messaging app Signal, which reportedly included members of Bankman-Fried’s inner circle, including FTX co-founder Zixiao “Gary” Wang, FTX engineer Nishad Singh and former Alameda CEO Caroline Ellison. The AFR report said the chat was …

Diamonds may be a girl’s best friend, but unfortunately, the billion-dollar diamond industry is rife with scandal and fraud. There have been a number of cases where lab-grown diamonds have been graded as natural diamonds. An example of this was seen last year when the International Gemological Institute analyzed and graded a 6.18ct lab-grown diamond, which was previously claimed to be a natural diamond on its Gemological Institute of America (GIA) report. It was also reported in 2005 that the Gemological Institute of America — which is one of the most trusted sources for evaluating gemstone quality — was accepting …

The new management for bankrupt crypto exchange FTX has reportedly hired a team of financial forensic investigators to track down the billions of dollars worth of missing customer crypto. Financial advisory company AlixPartners was chosen for the task and is led by former Securities and Exchange Commission (SEC) chief accountant, Matt Jacques, according to a Dec. 7 report from the Wall Street Journal. It is understood that the forensics firm will be tasked with conducting “asset-tracing” to identify and recover the missing digital assets and will complement the restructing work being undertaken by FTX. On Nov. 11 hackers drained wallets …

In a recent interview Michael Saylor, the MicroStrategy executive chairman and major Bitcoin (BTC) bull, shared his perspective on the fall of the FTX empire. Saylor said that for years there has been a low-grade “boiling Guerrilla war” between the BTC community opposite the crypto community over industry practices such as, what he repeatedly calls, “shitcoinery." In Saylor’s perspective, Sam Bankman-Fried was “the poster child” of the latter. “There is something ethically broken about being able to issue your own unregistered security. Sam and most of the people in the crypto world were always guilty of the sin of shitcoinery.” …

It’s quite evident that bad actors have left no stone unturned as legendary metal band Metallica warned fans against crypto giveaway scams right before their highly anticipated launch of its new album, 72 Seasons. Cashing in on the buzz around Metallica’s new album launch and upcoming tour, scammers have started targeting metalheads through social media impersonation. Metallica, however, was quick to point out “the ugly side of social media,” asking fans to steer away from Metallica Crypto giveaways, stating: “Let’s be as clear as possible. [Metallica crypto giveaways] are scams.” Sad but true, Cointelegraph recently highlighted a rise in front-running …

Blockchain-based institutional capital marketplace Maple Finance announced on Dec 5 that it plans to cut all ties with Orthogonal Trading due to alleged misrepresentation of finances following the collapse of FTX. According to Maple Finance, it decided to cut all ties with the trading firm because it misrepresented its finances over the last four weeks and only recently admitted on Dec. 3 that it could not meet loan repayments. This means the company had been “operating while effectively insolvent,” making it impossible for it to continue operating without outside intervention. Maple Finance shared that it refuses to work with “bad …