Royal United Services Institute’s Post

🇰🇵 * North Korean hacking group Lazarus sent over $150,000 worth of stolen cryptocurrency to a wallet used by a major Cambodian payments firm, Huione Pay. * The stolen crypto originated from hacks of three cryptocurrency companies in June and July 2022, primarily through phishing attacks. * Cryptocurrency allows North Korea to circumvent international sanctions and potentially pay for banned goods and services. * Huione Pay claimed it was unaware the funds came from the hacks, citing the multiple transactions between its wallet and the source as the reason. * Payments firms in Cambodia are prohibited from dealing or trading cryptocurrencies, but the central bank said it is drafting regulations to address crypto-related illegal activities. * Blockchain analysis tools enable companies to identify high-risk wallets and prevent interaction with them, but third parties cannot control transactions to and from wallets they don't manage. * The hackers used a complex laundering operation, including converting the stolen crypto to the stablecoin tether on the Tron blockchain, to hide their tracks. * Southeast Asia has become a global hub for high-tech money laundering and cybercrime operations, with many unregulated crypto service providers and online casinos acting as "underground banks." * Cambodia was recently removed from the FATF's "grey list" of countries with flawed anti-money laundering policies, but gaps in its regulations for crypto firms remain. * Tracing funds from Lazarus hacks is difficult due to the complex methods used to conceal the money trail, according to blockchain analysis firm. #aml #cft #antimoneylaundering #governance #compliace #kyc #cdd #duediligence #regulatory #onboarding #security #fatf #counterterrorism #financialintelligence #fraud #bank #banking #fintech #cryptocurrency #amla #fatf #finsec #fiu #financialcrime #penalty #fines #verification #scheme #scam #moneymule #underground #moneylaundering #terroristfinancing #cooperation #amlcft #followthemoney #sanctions #taxevasion #corruption #bribery #sustainability #va #vasp #northkorea #hackers

Crypto scams have evolved in sophistication, targeting unsuspecting investors eager to capitalize on the booming market. These scams range from phishing attempts to fake ICOs (Initial Coin Offerings) and ponzi schemes disguised as legitimate investment opportunities. Types of Scams Common in These Regions ⭕Phishing Attacks: Scammers use fake websites or emails to steal personal information. ⭕Fake ICOs: Investors are tricked into investing in non-existent projects. ⭕Ponzi Schemes: Returns are paid to earlier investors using the capital of newer investors. ⭕Law Enforcement's Response The joint efforts of Delhi and Hong Kong police have led to the dismantling of several large networks. Their strategy involves increased surveillance, collaboration with international agencies, and public awareness campaigns. Global Crackdown on Major Crypto Scams: A Deep Dive into Delhi and Hong Kong's Joint Efforts https://lnkd.in/gWq2jCBV

China's highest prosecuting body, the Supreme People's Procuratorate (SPP), is concentrating on criminals who use blockchain and metaverse initiatives for illegal purposes in an attempt to stop the rise in cybercrimes. The surge in online fraud, cyberviolence, and breaches of personal information has alarmed the SPP. According to reports, there has been a noticeable rise in cybercrimes on blockchains and in the metaverse. Criminals are also increasingly employing cryptocurrencies to launder money, making it more difficult to track down their stolen assets. According to SPP deputy prosecutor-general Ge Xiaoyan, charges for telecom fraud involving cybercrime have increased by 64% on an annual basis. Traditional crimes like gambling, theft, pyramid schemes, and counterfeiting have also made their way into cyberspace in tandem with the development in blockchain-related crimes. Xiaoyan highlighted that accusations pertaining to online theft have increased by approximately 23%, whereas charges pertaining to online counterfeiting and the sale of subpar goods have increased by nearly 86%. Procuratorates filed charges against 280,000 people in cybercrime cases between January and November, representing 19% of all criminal offenses and a 36% year-over-year rise. The Fourth Procuratorate of the SPP's director, Zhang Xiaojin, alerted the public and users of digital assets about investment frauds in the region's cryptocurrency market. The metaverse, blockchain, and binary options platforms have all been used by new cybercrimes, according to Xiaojin. Digital currencies have become hubs for these activities, thus it is imperative that people exercise increased caution. Despite China’s stringent restrictions on cryptocurrency transactions and mining, it remains a major hub for crypto mining. On the other hand, Hong Kong has adopted crypto-friendly regulations to protect investors and standardize its digital asset ecosystem, balancing security with innovation. . . . . #china #cybercrime #cryptocurrencies #cryptostan #thecryptocountry #blockchain #cryptonews

🇺🇸 🇰🇷 Last week, the U.S. Department of State and the Ministry of Foreign Affairs, Republic of Korea (ROK) co-hosted a US-ROK joint symposium on “Protecting the Virtual Asset Industry from DPRK Exploitation and Disrupting DPRK Revenue Generation.” TRM experts Nick Carlsen (former FBI and North Korea expert), Chris Janczewski (former IRS Criminal Investigation), and Kyle Armstrong (former Federal Bureau of Investigation (FBI)) joined experts from 40 countries to discuss how to mitigate the risk of cryptocurrency theft by DPRK cyber actors. During the event, global industry leaders and experts from the US and ROK governments delivered updates on current trends in DPRK (North Korea) virtual asset thefts and laundering, information on DPRK cyber threats to VASPs, and guidance on how industry and government can better work together to identify and halt DPRK virtual asset heists. Nearly USD 3 billion worth of cryptocurrency has been lost to Pyongyang-linked threat actors since 2017. And in 2023, hackers tied to North Korea stole approximately USD 700 million in cryptocurrency, according to research by TRM Labs—over a third of all funds stolen in #crypto attacks last year, despite an approximately 20% reduction from the USD 850 million haul in 2022. On average, hacks perpetrated by North Korea in 2023 resulted in ten times more losses than those perpetrated by other actors. The promise of cryptocurrency—cross-border value transfer at the speed of the internet—means that global cooperation and coordination is more important than ever. Information-sharing and public-private partnerships like the US-ROK symposium are critical when it comes to addressing North Korea and other illicit finance threats in the cryptocurrency ecosystem.

  The Many Battles of Binance   At a time cryptocurrency is breaking the seams regaining momentum with Bitcoin surging past $67,000 while Ethereum approached $3,300 and BONK rallied over 35%, the world’s largest cryptocurrency exchange, Binance is battling for its soul. The founder of Binance, Changpeng Zhao, is facing 36 months in prison after pleading guilty to violating laws against money laundering in the United States.   Zhao, who is expected to be sentenced on 30 April in Seattle, stepped down as Binance CEO last November, when he and the exchange admitted to the violations, and the firm agreed to a penalty of US$4.3-billion. Zhao, commonly known as CZ who founded Binance in 2017, also agreed to pay $50-million and cease involvement with Binance. The penalty included a $1.8-billion criminal fine and restitution of $2.5-billion.   US authorities said Binance failed to report more than 100 000 suspicious transactions with designated terrorist groups including Hamas, al-Qaeda and the Islamic State of Iraq and Syria, or Isis. Prosecutors said Binance’s platform also supported the sale of child sexual abuse materials and was a recipient of a large portion of ransomware proceeds.   Zhao, commonly known as CZ, agreed to pay $50-million and cease involvement with Binance, which he founded in 2017. The company quickly replaced Mr. Zhao with Richard Teng, a former Singaporean regulator, and continued to operate worldwide, but with a smaller staff after it laid off 3,000 of its nearly 8,000 employees last year.   In Nigeria, the government has been investigating money laundering and terrorism financing transactions allegedly perpetrated on its currency exchange platform. This led to a clampdown on the platform. Two top Binance executives traveled to Nigeria where they were promptly arrested since February this year.   Nadeem Anjarwalla, one of them reportedly escaped from detention. That embarrassing escape exacerbated the issue leading to an international manhunt for him and his re-arrest in Kenya two days ago. It is expected that he would be flown to Nigeria upon the approval of an extradition request by Interpol in conjunction with the Economic and Financial Crimes Commission (EFCC). In South Africa, it came as a shock that Binance is missing from the list of 75 licensed crypto asses service providers (CASPs) from over 374 applicants. The list, released Monday, features well-established global exchanges like Luno and VALR while Binance was conspicuously missing.   South Africa’s Financial Sector Conduct Authority (FSCA) was quoted as saying that the licensing process goes beyond simply legitimizing crypto businesses. It has a two-fold objective: protecting South African investors from the inherent risks of the volatile crypto market and preventing illegal activities like money laundering and terrorist financing through increased oversight. Statement analysts say was a subtle referral to the dark cloud that presently enveloped Binance. #crypto

China's Supreme People's Procuratorate Targets Blockchain and Metaverse Cybercrimes According to Cointelegraph: As cybercrimes are on the rise, China's Supreme People's Procuratorate (SPP) – the country's top prosecutorial body – is aiming its sights at criminals utilizing blockchain and metaverse projects for illicit activities. The SPP reports an alarming increase in online fraud, cyber violence, and personal data breaches, particularly in blockchain landscapes and within metaverse platforms. Ge Xiaoyan, Deputy Prosecutor-General of the SPP, stated telecom fraud related to cybercrime surged by 64% year-on-year. The shift of traditional crimes like gambling, theft, pyramid schemes and counterfeiting into the digital space has augmented the challenge. Cases of internet theft rose nearly by 23%, while charges related to online counterfeiting and sale of subpar goods surged by around 86%. From January to November, the Procuratorate pressed charges against 280,000 individuals in cybercrime cases, representing a 36% year-on-year increase. These accounted for a staggering 19% of all criminal offenses, as reported by Xiaoyan. Zhang Xiaojin, the director of the Fourth Procuratorate of the SPP, cautions public and digital asset participants about investment scams within the local crypto economy. He underscored the proliferation of new cybercrimes leveraging the metaverse, blockchain, and binary options platforms, stating digital currencies have become hotspots for such activities. Despite China's steadfast efforts to eradicate digital asset-related crimes, Hong Kong adopts a contrasting strategy, promoting crypto-friendly regulations to streamline its digital asset ecosystem and protect investors without stifling innovation. As yet another step to maintain financial stability, the People’s Bank of China (PBoC) – the Chinese central bank – stated in its latest stability report the need for cryptocurrency industry regulation through multi-country joint efforts. Disclaimer: Includes third-party opinions. No financial advice. #digitalcurrency #crypto

New Post: South Korea looks to crackdown on crypto mixers via new regulations - South Korean financial authorities are considering introducing specific regulatory measures for cryptocurrency mixers to curb the misuse of these protocols for money laundering by criminal organizations, local media reported on Jan. 15.The move is driven by the growing concern that mixers, originally designed for privacy protection, are increasingly exploited for illicit financial activities.The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission is spearheading the examination of potential regulatory frameworks.Mixers under fireCryptocurrency mixers, or tumblers, fragment and intermix digital assets, redistributing them across numerous wallet addresses, thus obfuscating the trail of transactions and user identities.While these services were initially intended to safeguard the privacy of users with substantial funds, they have become a tool for criminals, including hackers, to launder money.According to an FIU official, the absence of specific sanctions against mixers in South Korea has led to a significant risk of them being used for laundering funds. The proposed regulations might restrict virtual asset service providers from engaging in mixer-based transactions.Professor Hwang Seok-jin from Dongguk University’s Graduate School of Information Security emphasized the importance of new regulations to prevent the cash-out of stolen assets through exchanges and to maintain market integrity.Domestically, the urgency of these measures is driven by the recent hacking of the Orbit Bridge. Hackers exploited the protocol to steal roughly $81 million in various digital assets, which is suspected to have been laundered through mixers.International collaborationThis move aligns with international trends and regulatory actions from other authorities, such as the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), which recently established Anti-Money Laundering (AML) regulations targeting mixers.Following this, the regulator sanctioned crypto mixer Sinbad, frequently used by the North Korean hacking group ‘Lazarus‘ for laundering stolen funds.There is a growing global consensus on the issue of mixers needing regulatory intervention, primarily to stop their misuse by illicit actors. However, the formulation of concrete regulatory frameworks might take time due to the novelty of the discussion and the need for international coordination, given the cross-border nature of mixer usage.The FIU said it intends to monitor the situation in other countries and aims to collaborate heavily with international regulators to clamp down on the misuse of mixers. #South #Korea #crackdown #crypto #mixers #regulations https://lnkd.in/djRBDchC

A #UN report exposes #NorthKorea's reliance on cybercrime, with findings indicating that the country derives around 50% of its foreign currency income from illicit activities. The report highlights the nation's involvement in #cryptocurrency hacking, raising alarms over global digital investment security. Investigations reveal that a significant portion of the funds obtained through cyberattacks is diverted towards building weapons of mass destruction, fueling further apprehension Read full story: https://lnkd.in/gSAEAb_P

The #Crime-#Crypto Nexus: Nuancing Risk Across Crypto-Crime #Transactions. Available Open Access, my latest chapter, co-authored with Rhianna Hamilton in a volume published by Springer, entitled #FinancialCrime and the Law: Identifying and Mitigating Risks, co-edited by Louis De Koker and Doron Goldbarsht. #Cryptocurrency is supercharging illicit activities by #transnational #criminal #networks, including #terrorism, #drugtrafficking, #pornography, #sanctionsevasion, and #ransomware. Yet, mainstream cryptocurrency literature often overlooks this criminal association. The relatively new and transboundary nature of cryptocurrency is restructuring criminal activities. #Hacking has emerged as a digital-age #bank #heist, siphoning off substantial sums from #exchange #platforms. #Cryptocrime is dynamic, transitioning from primarily #placing and #layering the proceeds of #precursor crimes into the #financialsystem to a burgeoning trend of stealing #virtualcurrency. While not every online financial crime involves cryptocurrency, the proliferation of crypto-enabled cybercrimes is exponential. Paradoxically, existing literature largely disregards cryptocurrency-enabled offenses such as Online Child Sexual Exploitation and Abuse (OCSEA), sanctions evasion, and ransomware. https://lnkd.in/gDrAdA4i