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US senators drill into FTC’s work to track AI attacks on older citizens

The senators asked the FTC chair four questions about AI scam data collection practices to find out if the commission can identify AI-powered scams and address them accordingly.

Four United States senators have written to Federal Trade Commission (FTC) Chair Lina Khan requesting information on efforts taken by the FTC to track the use of artificial intelligence (AI) in scamming older Americans.

In the letter addressed to Khan, U.S.

Underlining the importance of understanding the extent of the threat in order to counter it, they stated:

“We ask that FTC share how it is working to gather data on the use of AI in scams and ensure it is accurately reflected in its Consumer Sentinel Network (Sentinel) database.”

Consumer Sentinel is the FTC’s investigative cyber tool used by federal, state or local law enforcement agencies, which includes reports about various scams.

The senators wanted to know if the FTC has the capacity to identify AI-powered scams and tag them accordingly in Sentinel.

The lawmakers also requested a breakdown of Sentinel’s data to identify the popularity and success rates of each type of scam.

Casey is also the chairman of the Senate Special Committee on Aging, which studies issues related to older Americans.

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Australia tries again to combat ‘future sectors’ crypto scams

The “Proposed Scams Code Framework” consultation paper aims to delegate clear roles and responsibilities to government and private entities when combatting scams.

A consultation paper on a new framework for addressing consumer and business scams proposed by Australia’s Department of the Treasury considers applying sector-specific codes and standards to banking and cryptocurrency scams, among others.

The paper adds to the efforts of the Australian Competition and Consumer Commission (ACCC) to combat scams via the annual Scams Awareness Week initiative. It also reveals Australia’s plan to assign mandatory industry codes to each different type of scam.

The “Proposed Scams Code Framework” consultation paper — announced on Nov. 30 by Assistant Treasurer Stephen Jones and the Minister for Communications Michelle Rowland — aims to delegate clear roles and responsibilities to government and private entities when combatting scams. “This includes ensuring that key sectors in the scams ecosystem have measures in place to prevent, detect, disrupt, and respond to scams, including sharing scam intelligence across and between sectors,” the Treasury clarified.

Scams code framework proposed by the Australian Treasury. Source: treasury.gov.au

The framework proposes three broad categories for assigning codes and standards, covering what they see as the areas most targeted by scammers: banks, telecommunications providers and digital communications platforms. It also mentions a “future sectors” category, which would tackle cryptocurrencies, nonfungible tokens (NFT) and related trading platforms and marketplaces.

Related: Australian Treasury proposes to regulate crypto exchanges, not tokens

The Treasury highlighted that Australian consumers and businesses lost at least $3.1 billion to scams in 2022 — an 80% increase from 2021. While the Australian government recently introduced several initiatives to address scams, existing attempts have proved ineffective.

The new mandatory industry codes will outline the responsibilities of the private sector concerning scam activity. Currently, the National Anti-Scam Centre (NASC), led by the ACCC, the Australian Securities and Investments Commission, the Australian Communications and Media Authority, and specialist support services are working together to combat scams in Australia.

The Treasury will collect comments on the consultation until Jan. 29, 2024.

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​​Hong Kong authorities say 145 victims and $18.9M lost in Hounax scam

Authorities in Hong Kong confirmed there were 145 affected users scammed on the unlicensed crypto exchange Hounax, resulting in $18.9 million in lost funds.

Hong Kong authorities reported on Nov. 27 that 145 users were affected in a scam by the unlicensed cryptocurrency exchange Hounax, resulting in a loss of 148 million HKD ($18.9 million), according to local media Shenzhen Commercial News. 

On Nov. 25, local police held an initial press conference to inform the Hounax platform of the reports. The Hong Kong Securities Regulatory Commission (SFC) said that as of the 27th, they received 18 complaints about exchange regarding amounts ranging from 12,000 HKD to 10 million HDK ($1,539- $1.2 million).

According to local police, Hounax claimed to be a licensed platform that cooperated in line with legal financial institutions, although on Nov. 1 the SFC listed it as a suspicious platform and cautioned users over its risks.

Hounax allegedly recruited local customers via claims it was founded by the original Coinbase technical team, it had a license from Canadian authorities, and it was considering investments from big names like Sequoia Capital and IDG Capital.

The chief inspector of the Commercial Crime Investigation Section of the Hong Kong Police, Ke Yongn, said the platform also utilized social media to attract victims. However, according to the report, the official Facebook page of the platform is no longer online.

Related: Binance-linked HKVAEX still preparing to apply for license in Hong Kong

The SFC currently lists nine suspicious crypto investment platforms, including Hounax, JPEX, Hong Kong Digital Research Institute, BitCuped, FUBT, futubit/futu-pro, EFSPD, OSL trading, and arrano.network.

This incident follows a major scandal with the JPEX exchange in Hong Kong earlier this year. Local authorities received more than 2,000 complaints from JPEX users and eventually reported around $180 million in losses. Sixty-six individuals have been arrested in relation to the scandal so far.

These events have caused local regulators in Hong Kong to tighten crypto regulation to avoid another industry catastrophe. However, regulators have said the country’s one-year grace period for crypto exchanges won’t change.

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Asked to get a banana, a BAYC owner narrowly avoids a fake Forbes scam

Scammers posing as Forbes journalists have been targeting BAYC holders to set up interviews and distract them while they attempt to steal their apes.

A Bored Ape Yacht Club (BAYC) owner says he has managed to avoid a potentially “dreadful day” after being asked to retrieve a banana for a photo from someone they initially believed was interviewing them for Forbes.

On Nov. 27, NFT collector ‘Crumz’ detailed his run-in with a scammer  posing as a Forbes journalist.

He reported that someone pretending to be Robert LaFanco — a real Forbes editor, contacted him by direct message from an impersonator account with the offer of an interview for a new article about BAYCs. 

During the interview, the scammer prompted Crumz to click a "button" to allow access to record the interview. Crumz said he complied with the so-called journalists despite certain red flags, including their use of a non-premium Zoom account and wanting to use a separate recorder bot to record his screen.

“I had to press a button to allow access to record,” he said before adding, “I didn’t think much of it first but at the end, he asks me to say something that resembles my ape and he suggests a banana.”

'Crumz' said he later realized this was a distraction attempt to take him away from his computer during which the attacker would take control of his computer to steal his assets. 

‘Crumz’ said instead of getting the banana, he waited by his computer and sure enough, the scammers started to control his screen.

"I mute my screen and there's no video and just waited by the screen and sure enough they started to control my screen, I stopped them when they went on delegate.cash." 

Crypto casino Rollbit partner ‘@3orovik’ echoed the warning to his 140,000 X followers on Nov. 27.

He also fingered a spurious account named ‘Robert LaFranco’ whose profile claims he is a Forbes assistant managing editor. “During this interview, he attempts to trick you to gain access to your PC and steal your expensive NFTs,” he warned.

Meanwhile, BAYC community member Laura Rod also reported being contacted by the bogus Forbes editor.

Related: Nansen phishing emails flood crypto investors’ inboxes

Earlier this month blockchain security firm Slowmist detailed a number of scams in which victims lost crypto assets to fake journalists.

It reported that, after scheduling an interview, the attacker would guide victims to join the interview on Telegram, providing an interview outline, conducting a two-hour interview, and then providing the malicious link to consent to publication.

In October, a Friend.tech user reported being duped by a fake Bloomberg journalist, who lured them into clicking a link for a “consent form” which instead resulted in a drained Friend.tech account. 

Meanwhile, several industry observers have noted that scammers on X (Twitter) often have a BAYC profile picture which is something to look out for.

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Nansen phishing emails flood crypto investors’ inboxes

On Sept. 22, one of Nansen’s third-party vendors suffered a security breach, which exposed the email addresses of 7% of the system’s users.

Numerous users of the crypto analytics platform Nansen have received phishing emails from scammers pitching an “exclusive opportunity” to participate in the fictitious “Nansen Airdrop.”

On Nov. 23, crypto community members on X (formerly Twitter) flagged an ongoing phishing campaign targeting Nansen users. The scammers are impersonating Nansen and sending fake invitations to an exclusive airdrop event.

Cointelegraph confirmed the hack from crypto investigator Officer’s Notes (Officercia), who initially warned the community about the ongoing attack. He suspects that user data from a previous third-party database leak is being used to target Nansen users.

On Sept. 22, one of Nansen’s third-party vendors suffered a security breach, which affected nearly 7% of the system’s users. The users affected by the breach reportedly had their email addresses exposed, along with some password hashes, and several had their blockchain addresses compromised. At the time, Nansen claimed it would identify and inform those affected and ask them all to change their passwords. It also clarified that wallet funds were unaffected by the event.

Nansen phishing email. Source: @offiercia (X)

The screenshot of the Nansen phishing email shared with Cointelegraph shows the sender was “mail@networkforgood.com,” an email address completely unrelated to the original analytics platform.

It said that for the next 48 hours, users could claim a guaranteed allocated amount of fake NANSEN tokens. The scammers attached a link to the email, which would redirect users to a potentially rigged website.

Officercia advises reporting suspected phishing links to databases such as chainabuse.com, cryptoscamdb.org and phishtank.org, which help the internet community reduce the success rates of such attacks.

Nansen has not responded to Cointelegraph’s request for comment.

Related: No ‘mass exodus of funds’ following Binance–DOJ settlement — Nansen

Even more crypto investors are potential phishing targets after user data from TrueCoin and FTX bankruptcy claims, among others, was leaked recently.

However, Friend.tech recently denied claims that its database of over 100,000 users was leaked. “It’s like saying someone hacked you by looking at your public Twitter feed,” explained the Friend.tech team, clarifying that the information came from scraping its public API.

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Tether freezes $225M USDT linked to romance scammers amid DOJ investigation

The stablecoin issuer reported the illicit funds had been used by a Southeast Asia-based crime syndicate responsible for a “pig butchering” romance scam.

Stablecoin issuer Tether froze roughly $225 million worth of USDT tokens as part of an investigation into a Southeast Asia human trafficking syndicate launched by the United States Department of Justice (DOJ). 

In a Nov. 20 announcement, Tether said it had worked with the DOJ and crypto exchange OKX to freeze $225 million USDT in “external self-custodied wallets.” The firm reported the illicit funds had been used by a crime syndicate responsible for a “pig butchering” romance scam — a technique in which bad actors attempt to develop an online relationship with unsuspecting individuals, often convincing them to invest in legitimate businesses before conning them.

According to Tether, the freezing of the USDT followed a “months-long investigative effort” into the location of the funds between the firm, OKX, DOJ, and U.S. law enforcement agencies. The stablecoin issuer said it would work with U.S. authorities to unfreeze any “lawful” wallets that may have been seized as part of the effort.

“Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for safety within the crypto space,” said Tether CEO Paolo Ardoino. “Our recent collaboration with the Department of Justice underscores our dedication to fostering a secure environment. We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry.”

Tether has previously worked with global law enforcement agencies to freeze assets allegedly linked to criminal syndicates, such as when the firm coordinated with Israel’s National Bureau for Counter Terror Financing to freeze roughly $873,000 worth of USDT used for funding terrorist activities in Israel and Ukraine. The latest $225-million freeze appeared to be the largest in Tether’s history.

Related: Circle, Tether freezes over $65M in assets transferred from Multichain

Unlike many cryptocurrencies like Bitcoin (BTC), which has the ability to be held outside the control of anyone but the individual with the private keys, stablecoins like USDT are more likely to be issued by a single authority. As a result, the issuers sometimes have the capability of freezing funds and halting transactions in response to requests from law enforcement.

However, crypto moving through exchanges is sometimes subject to the same treatment. In August 2022, Binance said it had restricted account access to $1 million in crypto for a Tezos tool contributor following a request from authorities and similarly froze accounts linked to Hamas militants in October 2023 in response to Israeli law enforcement.

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Cybersecurity Expert Backs Elizabeth Warren’s Anti-Crypto Legislation Proposal

Cybersecurity Expert Backs Elizabeth Warren’s Anti-Crypto Legislation Proposal

A cybersecurity expert is endorsing Senator Elizabeth Warren’s anti-crypto legislation proposal, saying that it would cut down on scams. According to a new press release, Warren, a Democrat representing Massachusetts, asked cybersecurity expert Steve Weisman during a special Senate hearing on Aging if her proposed legislation would help cut down on crypto scams. Weisman responded […]

The post Cybersecurity Expert Backs Elizabeth Warren’s Anti-Crypto Legislation Proposal appeared first on The Daily Hodl.

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Google sues scammers over creation of fake Bard AI chatbot

Google has filed a lawsuit against scammers offering a malicious version of its AI chatbot Bard that tricks users into downloading and installing malware on their devices.

Google has filed a lawsuit against three scammers for creating fake advertisements for updates to Google’s artificial intelligence (AI) chatbot Bard, among other things, which, when downloaded, installs malware.

The lawsuit was filed on Nov. 13 and names the defendants as “DOES 1-3,” as they remain anonymous. Google says that the scammers have used its trademarks specifically relating to its AI products, such as “Google, Google AI, and Bard,” to “lure unsuspecting victims into downloading malware onto their computers.”

It gave an example of deceptive social media pages and trademarked content that make it look like a Google product, with invitations to download free versions of Bard and other AI products.

Screenshot of fake “Google AI” social media page used by scammers. Source: Court documents (Google)

Google said that unsuspecting users unknowingly download the malware by following the links, which are designed to access and exploit users’ social media login credentials and primarily target businesses and advertisers. 

The tech giant asked the court for damages, an award of attorneys’ fees, permanent injunctive relief for injuries inflicted by the defendants, all profits obtained by the scammers, a comprehensive restraining order and anything else the court deems “just and equitable.”

Related: OpenAI promises to fund legal costs for ChatGPT users sued over copyright

The lawsuit comes as AI services, including chatbot services, have seen a significant increase in users worldwide. According to recent data, Google’s Bard bot gets 49.7 million unique visitors each month. 

OpenAI’s popular AI chatbot service, ChatGPT, has more than 100 million monthly users with nearly 1.5 billion monthly visitors to its website.

This upsurge in popularity and accessibility of AI services has also brought many lawsuits against the companies developing the technology. OpenAI, Google and Meta — the parent company of Facebook and Instagram — have all been caught up in legal battles in the past year.

In July, Google was brought into a class-action lawsuit. Eight individuals who filed on behalf of “millions of class members,” such as internet users and copyright holders, said that Google had violated their privacy and property rights. It came after Google updated its new privacy policy with data scraping capabilities for AI training purposes.

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UK cryptocurrency scams jump 23%, young investors prime targets: Lloyds Bank

According to the bank, potential cryptocurrency investors usually make an average of three payments before recognizing they’ve fallen victim to a scam.

One of the Big Four banks in the United Kingdom, Lloyds Bank, has said that reports of cryptocurrency investment scams by victims have surged by 23% in the current year compared to the same period in 2022.

According to a press release published by Lloyds Bank, an increasing number of investors face the threat of falling victim to fraudulent schemes through a wave of fake advertisements posted on social media. Each victim of a cryptocurrency investment scam is losing an average of $13,115 (10,741 British pounds), an increase from $8,562 (7,010 pounds) the previous year. This surpasses losses from other consumer frauds, such as romance scams or purchase scams.

Screenshot of the report from Lloyds Bank. Source: Lloyds Bank

According to the report, individuals aged 25–34 constitute a quarter of all crypto scam victims, making it the most prevalent age group affected. The criminal organizations orchestrating these scams adapt their strategies to capitalize on emerging trends, deceiving more victims into relinquishing their money. Recently, their focus has expanded to include younger investors, enticed by the allure of quick riches through cryptocurrency trading.

Potential cryptocurrency investors usually make an average of three payments before recognizing they’ve fallen victim to a scam. It takes approximately 100 days from the initial transaction date before they report it to their bank. Unfortunately, the funds are usually irretrievable for the bank by this time.

Related: BNB Smart Chain scam losses dropped 75% in Q3: Report

This Lloyds Bank report corresponds with findings from a Coinbase report on the cryptocurrency landscape, indicating that younger Americans are more receptive to unconventional avenues for financial independence, including crypto, than older generations. This susceptibility makes them vulnerable to scams.

Younger generations actively explore new economic opportunities, laying the foundation for a modernized system and a revitalized version of the “American Dream.” As the report outlines, they see technologies like cryptocurrency as a tool to modernize the system.

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JPEX scandal: Taiwan determines new suspects in alleged fraud — Report

Taiwan prosecutors want Chang Tung-ying, chief partner at JPEX’s office in Taiwan, to be held in custody over alleged fraud.

The saga of the imploded cryptocurrency exchange JPEX continues to develop as Taiwanese prosecutors have reportedly found new alleged suspects.

The Taipei District Prosecutors Office (TDPO) requested Chang Tung-ying, the chief partner at JPEX’s office in Taiwan, be held in custody over alleged fraud, the local TV channel TVBS News reported on Nov. 9.

Taipei prosecutors reportedly searched nine locations related to the JPEX investigation and summoned Chang and three other alleged suspects. The authorities identified Chang and JPEX lecturer Shih Yu-sheng (also called Shi Yu) as suspects in the case for violating the Banking Act and the Money Laundering Control Act.

Other defendants were released, including JPEX salespersons Liu Chien-fu and Niu Keng-sheng. According to the report, Liu was released on bail of 50,000 new Taiwan dollars ($1,550), while Niu, a registered person in charge of JPEX Taiwan, was released after questioning.

The report also noted that Nine Chen, a Taiwanese celebrity and singer who once represented JPEX as a brand ambassador, was also summoned by prosecutors. Prosecutors reportedly named Nine Chen as a defendant after initially calling him to testify as a witness.

Nine Chen as JPEX brand ambassador. Source: JPEX

Once a successful crypto exchange, JPEX abruptly halted some services in mid-September 2023, citing a liquidity crisis triggered by “unfair treatment” from several institutions in Hong Kong. The abrupt implosion fueled allegations about JPEX misleading investors by claiming to have applied for a crypto trading license and other issues.

Related: ​​JPEX scandal won’t hurt Hong Kong crypto vision: Financial Secretary

JPEX quickly became the center of a major scandal in the industry. Hong Kong authorities launched an investigation after receiving over 2,000 complaints from JPEX users reporting nearly $180 million in losses. The implosion of JPEX has become a significant concern for financial regulators in Hong Kong, Taiwan and other countries, with many authorities initiating new measures to protect investors from losses due to similar incidents.

As of Sept. 25, law enforcement has arrested at least 11 alleged suspects in the JPEX case, while the alleged masterminds are still at large.

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