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Jake Paul-endorsed SafeMoon gets hacked after introducing a bug in upgrade

March 29, 2023 Coin Telegraph

Coin Telegraph

A public burn() function introduced in the latest upgrade allegedly allows users to burn tokens from other addresses.

SafeMoon, a project previously endorsed by A-list celebrities and social influencers such as Jake Paul and Soulja Boy, announced its liquidity pool (LP) was compromised. Without revealing further details about the attack, SafeMoon confirmed undertaking steps “to resolve the issue as soon as possible.”

Just like many other crypto projects in 2021, SafeMoon was backed by numerous celebrities. However, a lawsuit from Feb. 2022 alleged that musicians such as Nick Carter, Soulja Boy, Lil Yachty and YouTubers Jake Paul and Ben Phillips mimicked real-life Ponzi schemes by misleading investors to purchase SafeMoon (SFM) tokens under the pretext of unrealistic profits.

*Jake Paul promoting SafeMoon token in 2021. Source: Twitter*

Investigating the SafeMoon hack shows that the attacker made away with approximately 27,000 BNB (BNB), worth $8.9 million. SafeMoon has not yet responded to Cointelegraph’s request for comment. Moreover, users have been barred from posting comments on the announcement that revealed the LP compromise.

To the @SAFEMOON community: We want to inform you that our LP has been compromised.

We are taking swift action in an attempt to resolve the issue as soon as possible. Follow here for updates.

Thank you for your support as we work to address this situation.
— SafeMoon (@safemoon) March 28, 2023

Blockchain investigator Peckshield narrowed the problem to a recent software upgrade as a potential culprit that introduced the bug. A public burn() function introduced in the latest upgrade allegedly allows users to burn tokens from other addresses.

As explained by community member DeFi Mark, the attacker used the vulnerability to remove SFM tokens, causing an artificial spike in the token’s price. The attacker took advantage of the situation and sold off the tokens at an inflated price.

*SafeMoon exploit overview. Source: Peckshield*

The attacker, on the other hand, left a note along with the transaction, as shown above, stating:

“Hey relax, we are accidently frontrun an attack against you, we would like to return the fund, setup secure communication channel , lets talk.”

Until SafeMoon officially announces a resolution, investors are advised against investing in the project to avoid possible loss of funds.

Following a recent security incident related to illicit access to hot wallets, Bitcoin (BTC) ATM manufacturer General Bytes plans to reimburse customers that lost funds.

On March 17-18th, 2023, GENERAL BYTES experienced a security incident.

We released a statement urging customers to take immediate action to protect their personal information.

We urge all our customers to take immediate action to protect their funds and https://t.co/fajc61lcwR…
— GENERAL BYTES (@generalbytes) March 18, 2023

As Cointelegraph reported, the hack caused a loss of 56 BTC and 21.82 Ether (ETH), cumulatively worth nearly $1.9 million.

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Bitconnect Victims to Receive Over $17 Million in Restitution From Ponzi Scheme

January 14, 2023 Bitcoin.com

800 victims of ‘massive’ Bitconnect fraud to receive $17M restitution

January 13, 2023 Coin Telegraph

BitConnect

The millions will be distributed among the select number of victims, but thousands more were impacted by the $2.4 billion fraudulent scheme.

A group of crypto fraud victims of the BitConnect investment scheme will see some respite from the multi-billion dollar fraud scheme after a court ordered they receive a share in a $17 million restitution.

The United States District Court for the Southern District of California ordered the restitution for the “massive” scheme on Jan. 12 according to a release on the same day by the Department of Justice (DOJ).

800 victims of the scheme, hailing from 40 countries will be able to take a small slice of the $17 million restitution, a term that refers to returning property or monetary value of losses to the proper owner.

The DOJ statement noted that Bitconnect was a purported crypto lending platform that touted proprietary technology including the “Bitconnect Trading Bot” and “Volatility Software” that claimed would net investors guaranteed returns.

It promised a return an average daily compounding interest of 1% or 3,700% annually.

Investors would trade in Bitcoin (BTC) receiving Bitconnect Coin (BCC) in return which could be lent out at varying rates of interest.

However, the whole platform turned out to be a "textbook Ponzi scheme," as early investors were paid with funds supplied by new investors, it wrote.

The crypto platform launched in 2016 but collapsed in 2018 after pilfering $2.4 billion from over 4,000 people from 95 countries.

The alleged founder of Bitconnect, Satish Kumbhani, was charged by the DOJ in February 2022. He is also subject to a police investigation in India and his whereabouts are currently unknown.

*Kumbhani (right) in a 2017 interview. Image:* *YouTube*

The top U.S.-based Bitconnect promotor, Glenn Arcaro, pled guilty to wire fraud conspiracy charges in September 2021 and was ordered to pay back $24 million to investors.

According to the DOJ, Arcaro and others used 15% of Bitconnect investor money for a slush fund to be used for the benefit of its owner and other promoters.

On Sep. 16, 2022, Arcaro was sentenced to 38 months in prison for his participation in Bitconnect.

Executives from $1.5B South Korean crypto exchange fraud jailed

December 28, 2022 Coin Telegraph

Executives from .5B South Korean crypto exchange fraud jailed

Coin Telegraph

The latest court action now takes the number of V Global execs behind bars up to seven, as the CEO was previously sentenced to a 22-year prison term.

Six executives involved in the $1.5 billion (2 trillion won) South Korean crypto exchange fraud V Global have received prison sentences of up to eight years — but three were not detained so they could fight certain charges in court.

V Global operated between July 2020 and April 2021, roping in around 50,000 investors by promising 300% returns alongside sizable payments for referring new customers.

According to a translation of Dec. 26 reports from South Korean media outlets such as Economist.co.kr, two high-ranking execs, named Mr.Yang and Mr. Oh, got eight years and three years apiece for their role in defrauding investors.

Another four unnamed execs received three-year sentences and five years of probation.

Three of the total six have not yet been detained, however, as they have claimed innocence to certain charges and have the right to defend themselves in court.

“The defendants only trusted the VGlobal management team, evaded responsibility, and once the investigation began, they destroyed evidence and interfered with the investigation,” said the judge from the 12th Criminal Division of the Suwon District Court.

The judge however, was reported to have given the defendants some leniency, as the actual amount of fraud and number of investors impacted was lower than initially thought last year.

According to Kyeongin's reporting from February, this was due to later evidence showing that around 10,000 investors had actually made returns from V Global via payments from multilevel marketing incentives such as customer recruitment bonuses. Many are said to have then reinvested those profits back into the platform before it was shut down.

It was alleged back in June last year that the firm had paid out its customer referral bonuses, reportedly worth $1,000 a pop, to existing investors via the influx of capital from new users, in a Ponzi-like fashion.

The latest court action now takes the number of V Global execs behind bars up to seven, as the CEO, known as Mr. Lee, was sentenced to a 22-year prison term back in February.

$4B OneCoin scam co-founder pleads guilty, faces 60 years jail

December 19, 2022 Coin Telegraph

Coin Telegraph

The co-founder of the fraudulent scheme is set to be sentenced in April 2023 on charges relating to wire fraud and money laundering.

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 OneCoin as a “Bitcoin killer” when in reality the tokens were “entirely worthless.”

OneCoin was a Bulgarian company founded by Greenwood alongside “Cryptoqueen” Ruja Ignatova that marketed a cryptocurrency by the same name. Emails obtained by the DOJ between the two before its founding in 2014 allege the pair called it a “trashy coin.”

*Greenwood on stage in Jun. 2016 at OneCoin’s “COIN RUSH” event in London. Image:* *YouTube*

Outwardly it claimed to be a multi-level marketing firm with members gaining commissions for selling cryptocurrency packages apparently containing OneCoin and the ability to mine more. OneCoin could only be exchanged for fiat currency on the private Xcoinx exchange.

In reality, it was both a pyramid and a Ponzi scheme as investors could recruit others into the scheme without an actual product and later investors were paid with the money from earlier investors.

According to the DOJ Greenwood was earning around $21.2 million (€20 million) per month in his role as the “global master distributor” of the fraudulent crypto firm. Over $4 billion is believed to have been swindled by OneCoin from the three million people who invested in the packages.

Ignatova was placed on the Federal Bureau of Investigation’s top ten most wanted list in June for her role in the scheme. She remains at large and was last known to have traveled to Athens, Greece in Oct. 2017.

Williams said Greenwood’s plea “sends a clear message” the DOJ is “coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”

Greenwood is slated to be sentenced before District Judge Edgardo Ramos on Apr. 5, 2023.

Authorities elsewhere have charged those involved with OneCoin and Ignatova, with three associates facing charges in Germany over fraud and money laundering.

Ponzi scheme

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