Mixin Network hack drains $200M from mainnet assets

September 25, 2023 Coin Telegraph

Mixin Network hack drains 0M 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.

[Announcement] In the early morning of September 23, 2023 Hong Kong time, the database of Mixin Network's cloud service provider was attacked by hackers, resulting in the loss of some assets on the mainnet. We have contacted Google and blockchain security company @SlowMist_Team…
— Mixin Kernel (@MixinKernel) September 25, 2023

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.

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.

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CFTC Commissioner plans to modernize investor protection with technology

September 12, 2023 Coin Telegraph

CFTC

To minimize the damages caused by financial fraud, Romero proposed the formation of the National Financial Fraud Registry — a centralized record of all crimes and fines related to financial fraud.

CFTC Commissioner Christy Goldsmith Romero recommended regulators modernize its protection measures using technological advances as she warned that failure to do so would have a negative impact on American investors.

Romero, speaking at the North American Securities Administrators Association’s annual meeting in San Diego, California, said that the government’s inability to keep pace with technology would affect the most vulnerable investors. She added:

“As regulators are making policy decisions on next-generation technology, it is critical that we have a foundational understanding of the technology, and its implications for finance and law.”

Spearheading this effort to amp up investor protections and guardrails, Romero appointed technology experts in FinTech, responsible artificial intelligence, cryptocurrency, blockchain, and cybersecurity into the CFTC’s Technology Advisory Committee (TAC).

Thank you @NASAA for a warm welcome. Read here to see my re-proposal for a National Financial Fraud Registry. I proposed this in 2019 as @SIGTARP after conducting hundreds of fraud investigations. https://t.co/mjErLobTmY
— Commissioner Christy Goldsmith Romero (@CFTCcgr) September 12, 2023

The CFTC Commissioner revealed that the TAC experts are tasked with identifying ways to instill Know Your Customer (KYC) and Anti-money Laundering (AML) processes into decentralized finance and crypto investment avenues.

The TAC is also tasked with promoting responsible artificial intelligence (AI) development. According to Romero:

“Federal regulators are just getting started when it comes to AI. A good place to start is governance in making important decisions that impact investors and markets.”

Federal crypto investigations have shifted away from primarily backtracking trade activities to monitoring social media platforms such as X (formerly Twitter), Reddit and Facebook. However, Romero recommended the use of tools to aid such investigations:

“Tracing funds, tracing crypto, using the blockchain, using link analysis, using social media, and data analytic tools should all be in a regulators’ tool kit.”

The statements (tweets/posts) one shares on social media platforms “can be strong evidence of intent,” Romero added. The same platforms can be used by regulators to issue warnings about scams and protect investors.

To minimize the damages caused by financial fraud, Romero proposed the formation of the National Financial Fraud Registry — a centralized record of all crimes and fines related to financial fraud. The registry would help investors background check for any ongoing investigations or fines for fraud imposed on the companies. Romero first proposed the creation of this registry in December 2019:

“Once established, each federal agency would register its convictions, sentencings, civil fines and resolved enforcement actions. State and local agencies could join to achieve a true national fraud registry.”

Romero believes that such a one-stop-shop platform could help investors deter financial frauds. On an end note, the CFTC Commissioner stated that together, federal and state officials can improve investors’ safety.

In April, Romero urged crypto companies to verify the digital identity of users, as she believed that reducing anonymity in crypto could ease managing the associated risks. She added:

“It is possible for all crypto companies to distance themselves from mixers and anonymity-enhanced technology, while still appropriately providing financial privacy for customers.”

Romero encouraged the verification of digital identity, urging exchanges as well as decentralized finance (DeFi) platforms to verify the digital identity of users.

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Ronaldinho fails to testify in crypto scam probe, faces possible arrest in Brazil

August 27, 2023 Coin Telegraph

Brazil

The investigation centers around Ronaldinho's company '18kRonaldinho', which promised clients daily profits of over 2% through crypto investments.

Brazilian soccer star Ronaldinho Gaúcho could be detained by authorities to testify over a crypto fraud investigation in Brazil. According to local media reports, Ronaldinho failed to appear before the country's Congress over a pyramid scheme probe allegedly linked to one of his companies.

The former Paris Saint-Germain, F.C Barcelona and AC Milan star failed to testify at a congressional hearing on Aug. 24, citing adverse weather conditions, and ignoring a subpoena for the second time. According to congressman Aureo Ribeiro, he will have another opportunity to testify on Aug. 31. In the event that Ronaldinho fails to appear, law enforcement officials may take him before the committee.

Witnesses subpoenaed to appear before Congress have a duty to do so, as per Brazil's law. Witnesses who fail to comply with a subpoena may be fined and taken forcibly before Congress by the police.

Após ausência, CPI das Criptomoedas aprova condução coercitiva a Ronaldinho Gaúcho. https://t.co/g9OalFlKSl
— Jornal O Globo (@JornalOGlobo) August 22, 2023

The investigation revolves around Ronaldinho's venture, '18kRonaldinho'. The company allegedly promised clients daily returns over 2% through crypto investments. A lawsuit seeking more than $61 million in damages was filed against the company for failing to return such profits. The litigation is now part of a broader investigation into crypto frauds in the country.

Ronaldinho's legal team argues that he was merely the company's 'ambassador', thus another victim of the alleged scam. According to them, his image and name were illegally used to deceive potential clients without the proper authorization. Ronaldinho's crypto business also includes a nonfungible token (NFT) collection, launched in collaboration with INFLUXO in 2021.

In 2020, Ronaldinho and his brother Roberto de Assis were arrested in Paraguay for entering the country with fake passports, spending over 170 days behind bars. Assis is also involved in the ongoing crypto investigation.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

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Alleged former Worldcoin employee says they’re in contact with authorities

August 25, 2023 Coin Telegraph

Coin Telegraph

The individual, whose Worldcoin employment could not be independently verified, claimed they witnessed “sloppy and/or illegal things” while working there prior to the token launch.

An individual calling themselves Nadir Hajarabi, who claimed to have previously worked for Worldcoin, has alleged the human identity verification project may have committed illegal acts during their employment.

In an Aug. 23 YouTube video, Hajarabi said they witnessed “very questionable” activities at Worldcoin including “sloppy and/or illegal things” prior to quitting the project before its token launch on July 24. They claimed the organization was holding some of their pay, and were speaking with authorities in different jurisdictions as part of probes into Worldcoin.

According to Hajarabi, the Worldcoin project had a “horrendous execution” which involved cutting corners ahead of the release of its white paper, and they had seen red flags “from day one”. They said they contacted the Worldcoin CEO and the organization’s legal team but did not receive satisfactory answers for the alleged discrepancies in its mission versus execution.

Cointelegraph was unable to independently verify Hajarabi’s claims, though a photo posted to X appeared to show them with one of the project's iris-scanning orbs. Their YouTube channel, created in September 2013, featured only one video with the allegations against Worldcoin. An X account which appeared to be controlled by the same individual posted a photo of an ETHGlobal Paris badge with Hajarabi’s name and affiliation with Worldcoin.

*X posted by Nadir Hajarabi on Aug. 25 of an ETHGlobal Paris badge. Source: X*

A LinkedIn page of Hajarabi appeared to be connected to the same individual in the YouTube video — a Paris resident with experience in nonfungible tokens, web3 projects, and smart contracts. Cointelegraph reached out to Worldcoin for comment, but did not receive a response at the time of publication.

The Worldcoin project started with the intention of distinguishing real people from bots by providing retinal scans for identity verification through the orbs. There were more than 2 million sign-ups prior to the launch of the Worldcoin token in July.

Ahead of the launch of the Worldcoin token and verification process, many in and out of the crypto space criticized the project, citing privacy concerns over user data. The Bavarian State Office for Data Protection Supervision reportedly began investigating Worldcoin in November 2022 while the French National Commission on Informatics and Liberty reportedly called its data collection methods “questionable.” The Information Commissioner’s Office in the United Kingdom has also raised similar concerns over the project.

In August, Kenya’s minister of internal security announced it would suspend Worldcoin’s local operations until authorities had the opportunity to assess any potential risk to residents, which reportedly included a raid and seizure of the organization’s equipment. Argentina’s Agency for Access to Public Information later announced a probe into Worldcoin’s collection, storage and use of customer data, citing security and privacy concerns.

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BarnBridge DAO calls halt to ‘all work’ on DeFi protocol amid SEC probe

July 7, 2023 Coin Telegraph

BarnBridge

Some DAO members joked about the situation while others believed there may be an ulterior motive at play.

BarnBridge DAO members have been told to pause “all work” related to the project after a reported probe by the United States Securities and Exchange Commission (SEC).

In a July 6 post to the platform’s Discord channel, Douglas Park, a lawyer for the decentralized autonomous organization revealed the news to members.

“I am letting you know that the Securities and Exchange Commission is investigating BarnBridge DAO and individuals associated with the DAO,” Park said.

pic.twitter.com/ChsjBuGEzM
— BarnBridge (@Barn_Bridge) July 7, 2023

In order to “reduce potential further legal liability,” Park suggested “all work” on BarnBridge-related products should stop — including the closure of liquidity pools — and that individuals should not receive compensation for work flowing from the investment efforts of the DAO.

Co-founder Tyler Ward, presumably dubbed “Lord Tyler” on Discord, confirmed Park’s message was true on BarnBridge’s Discord shortly after.

Park and Ward didn’t explain why the SEC launched a probe into BarnBridge DAO. Park however explained that because the investigation is “ongoing” and “non-public,” only limited information can be shared.

Between June 30 and July 3, 100% of BarnBridge (BOND) token holders — voted on a proposal to retain the law firm Park & Dibadj LLP — of which Park is the managing partner — as legal counsel for the DAO “for various legal work.”

213,000 votes were cast and 201,000, or 94.3%, of them came from the wallet “barnbridge.eth.”

*100% of the 213,000 BOND tokens were placed in favor of the proposal. Source: Snapshot*

The timing and subject of the proposal may suggest the SEC launched an investigation into BarnBridge DAO before June 30.

Some DAO members have raised suspicions over the announcement, however.

One member of the Discord asked for supporting evidence of the SEC’s investigation and implied BarnBridge’s founders may be using it as an excuse to facilitate an “exit strategy” to potentially defraud investors.

Ward refuted the claim stating it would be the “worst thought-out rug attempt in history.”

Other members took the news more lightheartedly with one saying it’s “time to move to Europe” — suggesting DAO members could hide from the SEC.

Another jokingly stated that anyone who interacted with BarnBridge would be “shot” by SEC chair Gary Gensler “on live TV” — alluding to his tough stance on crypto.

*Mixed reactions were recieved from BarnBridge DAO members on Discord. Source: Discord*

BarnBridge is a cross-platform risk management DeFi protocol that attempts to tackle inflation risk and interest rate volatility.

Since the news emerged, the price of its native token BOND has fallen 1.9% to $3.12, according to CoinGecko. The token is down 98.3% since its all-time high price of $185.7 on Oct. 27, 2020, and currently has a market cap of $29 million.

Early last month, the SEC filed lawsuits against two of the industry’s largest exchanges Binance and Coinbase, alleging they offered unregistered securities.

The reported investigation into BarnBridge, a small to mid-sized DAO, could suggest the securities regulator isn’t just looking to target the crypto space's largest organizations.

Cointelegraph contacted the SEC for comment but did not receive an immediate response.

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Fed, SEC investigate Goldman Sachs over Silicon Valley Bank’s securities portfolio: Report

June 15, 2023 Coin Telegraph

Bankruptcy

Both regulatory bodies are inquiring into the activities of Goldman Sachs during its unsuccessful capital raise preceding the downfall of Silicon Valley Bank.

Goldman Sachs is currently facing scrutiny from the Federal Reserve and Securities and Exchange Commission (SEC) regarding its involvement in the purchase of Silicon Valley Bank's securities portfolio prior to the bank's collapse, The Wall Street Journal has reported, citing sources familiar with the matter.

Breaking: Goldman Sachs is being investigated by the Federal Reserve and the Securities and Exchange Commission over its role in Silicon Valley Bank’s final days https://t.co/L7buF8TfvX
— The Wall Street Journal (@WSJ) June 15, 2023

According to the report, both agencies are investigating Goldman Sachs' actions during its failed capital raise before the collapse of SVB. The Justice Department has also reportedly issued a subpoena to Goldman Sachs as part of its investigation into SVB.

Insiders have also allegedly reported that the Federal Reserve and SEC are particularly interested in obtaining documents relating to Goldman Sachs' dual role as buyer of SVB's securities portfolio and the advisor for the bank's capital raise. The agencies are reportedly investigating whether there were any improper communications between Goldman's investment banking division and its trading division regarding the sale of the portfolio.

In response, Goldman has shared that it is “cooperating with and providing information to various governmental bodies in connection with their investigations and inquiries into SVB, including the firm’s business with SVB in or around March 2023.”

In the final days leading to the collapse of SVB, Goldman Sachs was reportedly hired to assist the bank in raising capital. At the same time, its trading division purchased "SVB's $21 billion portfolio of available-for-sale debt securities at a discount." As WSJ reported, bankers and finanicallawyers consider it uncommon for banks to simultaneously act as both an adviser and a buyer of a company's assets, except in times of financial distress.

Sources familiar with the matter have also reportedly disclosed that Goldman advised SVB executives to "sell part or all of its securities portfolio" before raising capital to demonstrate the need for funding. This advice was reiterated by Greg Becker, SVB's former CEO, during his testimony before the Senate Banking Committee.

In response to the allegations, a Goldman Sachs spokeswoman stated that:

[Goldman] "informed SVB in writing that we would not act as their adviser on the sale, and that SVB should not rely on any advice from the bank in this regard, but instead hire a third-party financial adviser.”

On March 10, California regulators took the unprecedented step of closing down Silicon Valley Bank, a prominent financial lender catering to venture capital firms and tech companies. Before its closure, SVB stood as the 16th largest bank in the United States, boasting assets ofmore than $212 billion.

Following that incident, on March 17, SVB Financial Group filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court. The voluntary petition sought to facilitate a court-supervised reorganization process to preserve the company's value.

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CNHC stablecoin issuer detained by Chinese police: Report

May 31, 2023 Coin Telegraph

China

KuCoin Ventures and Circle Ventures are among the investors in the Chinese offshore yuan-pegged stablecoin, which is reportedly under investigation in China.

The Chinese government continues to crack down on the cryptocurrency industry with a new investigation targeting a major Chinese yuan stablecoin issuer.

Employees of Trust Reserve — the issuer of the Chinese yuan-pegged stablecoin CNH Coin (CNHC) — have been detained by Chinese police, the local blockchain publication PANews reported on May 31.

According to the report, Trust Reserve employees have been out of reach since the afternoon of May 29 due to multiple arrests. Some employees’ family members have reportedly been notified about the detentions.

PANews also learned that Trust Reserve’s office in Pudong, Shanghai was empty as of May 31. The door was sealed on May 29, with a notice saying, “Judicial seizure, strictly no vandalism.”

*Trust Reserve’s office in Pudong, Shanghai. Source: PANews*

Trust Reserve, formerly known as CNHC Group, issues the CNHC stablecoin and Hong Kong dollar-pegged HKD Coin (HKDC).

In March 2023, Trust Reserve secured $10 million in funding in a round led by KuCoin Ventures, the venture capital arm of the major cryptocurrency exchange, KuCoin. Other prominent investors in the round included KuCoin’s investor, IDG Capital, and Circle Ventures, the investment subsidiary of the USD Coin (USDC) issuer.

CNHC co-founder Joy Cham previously told Cointelegraph that Trust Reserve launched its offshore yuan-pegged stablecoin, CNHC, in 2021. The firm was expecting to increase the exposure of the stablecoin in the near future, as it is only listed on one centralized exchange, TruBit Pro, according to data from CoinMarketCap.

*CNHC stablecoin’s historical price chart. Source: CoinMarketCap*

Trust Reserve and its representatives did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.

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Wife finds husband’s Bitcoin stash amid divorce proceedings

May 21, 2023 Coin Telegraph

Coin Telegraph

The woman initially suspected that her husband — who earned $3 million per year — did not reveal all his assets, which would get split between the two during the divorce.

The divorce proceedings of a New York couple took a turn after a forensic accountant helped track down the husband’s 12 Bitcoin (BTC) stash, which he intended to hide from his wife.

The couple in question were married for 10 years, but the man’s wife suspected that her husband did not reveal all his assets, which would get split between the two following their divorce. The housewife — addressed pseudonymously as Sarita — revealed to CNBC that her husband was earning $3 million annually, which was not reflective of his declared assets.

The woman appointed a forensic accountant, who eventually found that her husband failed to declare 12 BTC — worth roughly $500,000 — stored in an undisclosed crypto wallet. Having no clue about the Bitcoin investment, Sarita stated:

“It was never even a thought in my mind because it’s not like we were discussing it or making investments together. It was definitely a shock.”

As a result, the woman’s husband will have to part ways with some of his BTC holdings. Tracking crypto investments is easier than its fiat counterparts, considering that blockchain technology preserves all transactions and does not allow external factors to modify or delete entries.

Check out Cointelegraph’s article on blockchain to learn more about the underlying technology that makes Bitcoin possible.

Contrastingly, one of the latest crypto innovations, the metaverse, has become a popular place for couples worldwide to tie the knot.

Since 2021, countless couples have gotten married in metaverse-based virtual venues, allowing family members and friends to witness the joyous occasions.

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