1. Home
  2. Investigation

Investigation

South Korea Launches Investigation Into Worldcoin’s Data Collection Practices

South Korea Launches Investigation Into Worldcoin’s Data Collection PracticesThe government of South Korea has opened an investigation into Worldcoin, the iris scanning cryptocurrency and digital wallet project. According to a press release, the Personal Information Protection Commission, the data privacy watchdog in the country, will investigate the actions taken by Worldcoin regarding the treatment of the data collected from users and will take […]

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

IRS tax bill will swipe creditors of any ‘meaningful recovery,’ says FTX

FTX Trading said the firm “never earned anything anywhere near the amount” that would justify a $24 billion tax bill.

A proposed $24 billion tax bill from the United State IRS will likely suck up any “meaningful recovery” that was meant for victims of FTX, according to the bankrupt crypto exchange. 

The United States tax authority has been trying to chase tax arrears from the crypto exchange and its sister firm Alameda Research since May this year. The IRS initially claimed $44 billion across 45 separate claims against FTX and its subsidiaries in May. 10, but recently brought that number down to $24 billion.

However, in a Dec. 10 filing to a Delaware-based bankruptcy court, FTX said the claims put forth by the Internal Revenue Service were “meritless” and would also impact the funds meant to reimburse impacted FTX users.

Read more

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

FTX and Alameda Research cash out $10.8M to Binance, Coinbase, Wintermute

The latest transfer of $10.8 million was spread across 8 tokens, including Stepn (GMT), Uniswap (UNI), Synapse (SYN), Klaytn (KLAY), Fantom (FTM), Shiba Inu (SHIB), Arbitrum (ARB) and Optimism (OP).

Wallets linked to defunct crypto trading firms FTX and Alameda Research moved $10.8 million to accounts in Binance, Coinbase and Wintermute using eight cryptocurrencies.

Blockchain analysis firm Spot On Chain found $10.8 million worth of cryptocurrencies being moved from FTX and Alameda Research accounts to various crypto exchanges.

The latest transfer of $10.8 million was spread across eight tokens — $2.58 million in StepN (GMT), $2.41 million in Uniswap (UNI), $2.25 million in Synapse (SYN), $1.64 million in Klaytn (KLAY), $1.18 million in Fantom (FTM), $644,000 in Shiba Inu (SHIB) and small amounts of Arbitrum (ARB) and Optimism (OP).

On Oct. 24, the FTX and Alameda wallets transferred $10 million to a single wallet address, which was later redistributed to Binance and Coinbase accounts. 1, a similar transaction occurred between the parties involving $13.1 million being moved to Binance and Coinbase accounts.

Related: Ex-FTX execs team up to build new crypto exchange 12 months after FTX collapse: Report

Read more

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

BNB pops after report that DOJ wants $4B settlement with Binance

BNB hit its highest price since June after Bloomberg reported the Justice Department wanted $4 billion from Binance to end its probe into the exchange.

BNB (BNB) has gained over 7% in the last day after Bloomberg reported that the United States Department of Justice is contemplating a $4 billion settlement with Binance to resolve its investigation into the company.

Cointelegraph Markets Pro shows BNB spiked 6% to $262 in around 30 minutes after Bloomberg’s Nov. 20 report, which said Binance was negotiating an agreement to resolve a DOJ probe into alleged sanctions violations, money laundering and fraud.

BNB dropped to $252 around four hours later but notched a second spike to $266 — its highest price since June 7 — two days after the Securities and Exchange Commission sued Binance and CEO Changpeng “CZ” Zhao alleging they violated various securities laws.

BNB has seen an over 7% gain in the last 24 hours. Source: Cointelegraph Markets Pro

The Binance-issued token has the highest 24-hour price increase among the 75 largest cryptocurrencies by market cap. BNB is currently the fourth largest token with a market cap of over $40 billion.

Despite the recent price pump, BNB is down 61.4% from its May 10, 2021, all-time high of $686 but has gained 6.5% year-to-date.

Related: Binance launches Web3 wallet for its 150M registered users

One settlement scenario sees Binance pay the 10-figure fine and be allowed to keep operating in the U.S. in compliance with certain conditions.

An announcement of a potential agreement could come as soon as the end of the month, Bloomberg reported.

If Binance pays up, it will be one of the largest penalties ever paid in a criminal cryptocurrency case.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

Kronos Research halts trading amid $25M API key hack investigation

While Kronos Research is indefinitely halting trading services until internal investigations track down the culprit who stole over 12,800 ETH, the firm said that potential losses are not a significant portion of its equity.

A hacker walked away with $25 million from quantitative trading firm Kronos Research after accessing its compromised API keys.

On Nov. 19, Kronos Research revealed that an unauthorized entity accessed some of its API keys. Subsequently, the firm stopped its trading services on the platform. However, no losses were reported at the time.

Blockchain investigator ZachXBT followed up on the announcement and found roughly $25 million in total was siphoned away into six unique crypto wallet addresses. According to the investigation, the six transactions — worth 2,780 Ether (ETH), 2,540 ETH, 2,540 ETH, 2,636 ETH, 4.93 ETH and 2,507.52 ETH, respectively — were made from a Kronos Research account to various addresses owned by the hacker.

Kronos Research hacker sends stolen $25 million to various addresses. Source: Etherscan

While Kronos Research is indefinitely halting the trading services until internal investigations track down the culprit who stole over 12,800 ETH, the firm expects a positive outcome:

“Potential losses are not a significant portion of our equity and we aim to resume trading as soon as possible.”

Kronos Research did not immediately respond to Cointelegraph’s request for comment.

Related: Atomic Wallet asks to toss suit over $100M hack saying it has ‘no US ties’

The rising number of crypto hacks warrants that investors conduct extensive research on projects they intend to invest in.

Blockchain security firm CertiK recently revealed Q3 2023 as the most “damaging” quarter for crypto.

Incident counts and amount lost in Web3 security incidents in Q3 2023. Source: CertiK

Private key exploits, exit scams and oracle manipulation were the most prevalent techniques used for hacking crypto ecosystems. Over $700 million in digital assets was lost to various security incidents in Q3 2023, surpassing first-quarter losses of $320 million and second-quarter losses of $313 million.

Magazine: Breaking into Liberland: Dodging guards with inner-tubes, decoys and diplomats

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

Ukraine officials get training on crypto and virtual assets investigation

Officials from Ukraine were trained in tracing crypto transactions over different blockchains using specialized analytics software.

14 Ukrainian officials received advanced training on investigating new-age financial crimes in a training course held from Nov. 14 to Nov. 17 in Vienna, Austria.

According to a report released by the Organization for Security and Co-operation in Europe (OSEC), select supervisory and law enforcement officials from Ukraine learned about advanced techniques and tools required to investigate financial crimes using virtual assets.

OSEC comprises 57 participating countries from Europe, Asia and North America that aim to tackle security-related and other concerns globally.

Participants of the advanced training on virtual asset and crypto investigations in Vienna (OSCE). Source: osce.org

The course was organized by the Office of the Co-ordinator of OSCE Economic and Environmental Activities in partnership with the United Nations Office on Drugs and Crime.

Ralf Ernst, acting coordinator of OSCE economic and environmental activities, said the training course helped enhance Ukraine’s resilience against financial crimes such as money laundering. He added:

“With the growing use of virtual assets and cryptocurrencies in Ukraine, there is a pressing need to strengthen the capacity of law enforcement and supervisory bodies.”

The officials from Ukraine were trained in tracing crypto transactions over different blockchains using specialized analytics software.

Ernst also revealed that the Ukrainian officials received similar training in the past on crypto investigations and that OSCE will “continue to support Ukraine’s efforts to combat money laundering, particularly through virtual assets and cryptocurrencies” under the “innovative policy solutions to mitigate money-laundering risks of virtual assets” project.

The United States, the United Kingdom, Germany, Romania and Poland fund the project, specifically designed to support the governments of Georgia, Moldova and Ukraine to mitigate criminal risks related to digital assets and cryptocurrencies.

Related: Ukraine demands local crypto businesses provide financials

Stablecoin issuer Tether recently collaborated with Ukraine and Israel’s local law enforcement agencies to freeze 32 addresses that were potentially linked to terrorist activity.

As Cointelegraph reported, $873,118 worth of Tether (USDT) spread across 32 wallet addresses in Israel and Ukraine were frozen.

“Contrary to popular belief, cryptocurrency transactions are not anonymous; they are the most traceable and trackable assets,” stated Tether CEO Paolo Ardoino, explaining the transparency offered by the crypto ecosystem.

Magazine: Breaking into Liberland: Dodging guards with inner-tubes, decoys and diplomats

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

5 nations challenge crypto experts and investigators to target tax crimes

The J5 generates significant leads through events, which, in the past, has helped uncover multimillion-dollar crypto Ponzi schemes, such as the BitClub Network.

The Joint Chiefs of Global Tax Enforcement (J5), a global anti-tax fraud group, hosted investigators, cryptocurrency experts and data scientists in “The Cyber Challenge” event to track down individuals and organizations committing tax fraud.

The J5 members comprise the criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States, which collaborate in the fight against international and transnational tax crime and money laundering.

The group includes the Australian Taxation Office, the Canada Revenue Agency, the Dutch Fiscal Information and Investigation Service, His Majesty’s Revenue and Customs from the U.K. and IRS-CI from the United States. Participants included experts from J5 countries, which were tasked with optimizing the usage of data acquired from a variety of open and investigative sources available to each country.

J5 members include criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States. Source: irs.gov

Since its inception in 2018, the J5 has hosted five such events. In 2022, the fourth event focused on nonfungible tokens (NFTs) and decentralized exchanges (DEX). Sharing details about the latest 2023 event, the U.S. Internal Revenue Service report stated:

“This is the first Challenge where Financial Intelligence Units (FIUs) from each J5 country participated. Private sector was represented by blockchain analysis companies Chainalysis, BlockTrace, and AnChain making this the most collaborative Challenge to date.”

In the process, the J5 generated significant leads for further investigation, which, in the past, helped uncover multimillion-dollar crypto Ponzi schemes, such as the BitClub Network. John Ford, deputy commissioner of the Australian Taxation Office, stated:

“This collaboration between public and private specialists not only generates operational outcomes, but shares expert training, techniques and procedures, which is integral for the participants to remain proactive and effective in a rapidly evolving operating environment.”

Ryan Ryder from Chainalysis pointed out that crypto’s inherent transparency, coupled with international public and private sector experts, “can collaborate to identify and shut down illicit activity,” a task that remains impossible in traditional finance.

Related: G7 countries to launch AI code of conduct: Report

The Cointelegraph Innovation Circle recently featured seven crypto experts in an article to help Web3 companies prep for tax season. First and foremost, Web3 companies must constantly monitor the tax implications of their activities and diligently work to ensure they’re meeting their obligations.

In addition, the members of the Cointelegraph Innovation Circle recommended seven best practices to ensure adherence to tax formalities. Choosing a tax-friendly country while ensuring on-time payment is a top priority, in addition to avoiding shortcuts and finding an experienced crypto tax accountant.

Other key factors include accurate documentation of all activities, seeking expert legal counsel, automating transaction tracking and using specialized software.

Magazine: Slumdog billionaire 2: ‘Top 10… brings no satisfaction’ says Polygon’s Sandeep Nailwal

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

UK seeks six crypto investigators to beef up National Crime Agency

The role demands candidates to have the ability to provide strategic and tactical advice to crypto investigations, among other investigative qualities.

Reacting to the rising attempts from bad actors to dupe crypto investors, the United Kingdom’s National Crime Agency (NCA) plans to form a specialized cryptocurrency and virtual assets team to counter the issue.

The NCA posted a job opening on Nov. 4, looking to hire six individuals to create a new team focused on crypto crimes — which will either fall under the National Cyber Crime Unit (NCCU) or the Digital Asset Team. The responsibilities include:

“The role will support existing and new investigations where specialist cryptocurrency experience is required along with taking a proactive lead in identifying targets for further development.”

The role requires candidates to have the ability to provide strategic and tactical advice to crypto investigations, conduct blockchain forensic investigations and analyze various materials.

While the intent behind forming a dedicated team of crypto investigators becomes evident amid rising cyber threats, NCA did not immediately respond to Cointelegraph’s request for comment.

In 2023, the NCA issued numerous crypto-centric recruitment notices — all hiring for crypto investigators on various levels. The move complements the UK’s goal to become a crypto hub as it reignites discussions around building a regulated environment that nurtures the crypto ecosystem instead of penalizing the users.

Related: London emerges as world’s most crypto-ready city for business — research

In August 2023, crypto exchange Coinbase confirmed it was working “seriously” in the U.K. and Europe amid the introduction of the Markets in Crypto Assets (MiCA) regulation.

A related Coinbase post recognized the U.K. as one of its fastest-growing user markets. “In short, things are happening in Europe that are edging the region ahead and when it comes to embracing the digital economy, the region is preparing for a seismic change in how it uses and thinks about money,” it added.

Magazine: Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

Unibot contract $560K exploit crashes token price by more than 40%

Amid ongoing investigations from Unibot and blockchain investigators, Scopescan advised users to revoke the approvals for the exploited contract and move the funds to a new wallet.

A new contract deployed on Oct. 29 by Unibot, a popular Telegram bot used to snipe trades on the decentralized exchange Uniswap, was reportedly exploited for roughly $560,000 in various memecoins from users.

On Oct. 31, blockchain security firm Scopescan alerted Unibot users about an ongoing hack on Unibot that went undetected. An exploit on a newly deployed contract by Unibot drained the crypto holdings of several users.

Unibot later confirmed the hack by revealing initial details:

“We experienced a token approval exploit from our new router and have paused our router to contain the issue.”

Amid ongoing investigations from Unibot and blockchain investigators, Scopescan advised users to revoke the approvals for the exploited contract (0x126c9FbaB3A2FCA24eDfd17322E71a5e36E91865) and move the funds to a new wallet.

Unibot hacker moving funds. Source: 0xscope.com

The hacker is in the process of converting the stolen memecoins into Ether (ETH), blockchain data from Scopescan shows.

Unibot 1-day price chart showing a sharp decline in price following the hack. Source: CoinGecko

As seen above, the market reacted negatively to the development as the UNIBOT token witnessed an immediate 42.7% drop in its price in one hour — from $57.56 to $32.94. However, the token’s price is making a recovery attempt at the time of writing.

Unibot committed to compensating all users who lost funds due to the contract exploit. Weekly transaction data shows that cryptocurrencies such as Joe (JOE), UNIBOT and BeerusCat (BCAT) represented a major part of the loot.

Cointelegraph also learned from Scopescan that the address 0x835B, which is identical to the exploited address, was deployed and is being used to receive tokens from unsuspecting victims.

Unibot has not yet responded to Cointelegraph’s request for comment.

Related: Telegram crypto bots gain momentum in the market: Binance Research

A similar contract exploit recently drained 280 ETH from users of Maestrobots, a group of cryptocurrency bots on the Telegram Messenger app.

In the following days, Maestrobots paid a total of 610 ETH from its own revenue to cover all the user losses while citing a lack of liquidity to buy back the lost tokens:

“So we compensated affected users with the ETH equivalent of their tokens, and boosted that amount by 20% because you deserve it. These refunds cost 334 ETH.”

Blockchain security firm CertiK confirmed to Cointelegraph that it has been able to detect the transactions showing the 334 ETH compensation paid out to users from Maestro.

Magazine: Ethereum restaking: Blockchain innovation or dangerous house of cards?

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded

Mixin Network hack drains $200M from mainnet assets

Mixin Network suspended all deposits and withdrawals and will restart the services “once the vulnerabilities are confirmed and fixed.”

Decentralized peer-to-peer network Mixin Network has lost approximately $200 million in a hack involving the compromise of the database of a third-party cloud service provider.

On Sept. 25, Mixin Network confirmed that a hack on Sept. 23 drained approximately $200 million worth of crypto assets from its mainnet. An immediate suspension of all deposit and withdrawal services on Mixin Network followed the revelation.

Mixin Network appointed blockchain investigator SlowMist, as well as Google, to help investigate the hack as the Mixin team attempts a recovery. At the time of the hack, Mixin held $94.48 million in Ether (ETH), $23.55 million in Dai (DAI) and $23.3 million in Bitcoin (BTC), according to a separate investigation conducted by PeckShield. The total portfolio amounted to $141.32 million.

Mixin Network portfolio of $141.32 million. Source: PeckShield

Deposits and withdrawals on Mixin Network will recommence “once the vulnerabilities are confirmed and fixed.” The plans to recover the lost assets for users were not announced immediately.

While it was initially promised that Mixin founder Feng Xiaodong would explain this incident in a public Mandarin livestream at 1:00 pm Hong Kong Time on Sept 25, links to the livestream were not provided on official social media channels such as X (formerly Twitter) or its official website mixin.network.

Mixin Network did not respond to Cointelegraph’s request for comment by publication.

Related: Remitano exchange hacked for $2.7M; $1.4M frozen by Tether

Ethereum co-founder Vitalik Buterin recently suffered a hack that compromised his social media profile on X.

Vitalik Buterin confirms how hackers accessed his X account. Source: Warpcast

Buterin confirmed that he fell victim to a SIM swap attack after “someone socially-engineered T-mobile itself to take over my phone number.” SIM swap or sim jacking attacks aim to control the victim’s mobile number and use two-factor authentication to access social media, bank and crypto accounts.

Magazine: ‘AI has killed the industry’: EasyTranslate boss on adapting to change

$62 Million Munchables Hack: Rogue Developer Returns All Funds, No Ransom Demanded