AirBit Club execs face decades in prison after pleading guilty to $100M fraud

March 9, 2023 Coin Telegraph

AirBit Club

Co-founder Rodriguez and senior promoters Millan, Aguilar and Chairez all recently pled guilty to the charges, while the other founder, Dos Santos pled guilty in October, 2021.

Six people involved in a cryptocurrency “Ponzi scheme” that raked in about $100 million over five years have pled guilty to a series of fraud and money laundering charges, each carrying a maximum sentence of 20 to 30 years of prison.

One of the founders of “AirBit Club,” Pablo Renato Rodriguez, was the latest to plead guilty to wire fraud conspiracy charges on Mar. 8.

According to a Mar. 8 statement from the United States Department of Justice (DOJ), AirBit Club was a fake cryptocurrency mining and trading company operating between 2015 to 2020, where executives and promoters induced victim investors into believing that they’d make guaranteed passive income and profits on any membership purchased.

Operators and attorney of global multi-million-dollar cryptocurrency Ponzi scheme “AirBit Club” plead guiltyhttps://t.co/MT3mM9aqPV
— US Attorney SDNY (@SDNYnews) March 8, 2023

According to the DOJ, the perpetrators traveled throughout the United States, Latin America, Asia and Eastern Europe to market AirBit at “lavish expos” to convince investors to purchase AirBit Club memberships.

Victims saw “profits” accumulate on the AirBit Club online portal, but no actual mining or trading was ever carried out. One victim trying to withdraw was asked to “bring new blood” into the AirBit Club scheme in order to withdraw her funds.

U.S. Attorney Damian Williams said the operators used funds from victims to purchase luxurious cars, houses and jewerly. Some of the proceeds were used to finance more expos to recruit more victims too:

“The defendants took advantage of the growing hype around cryptocurrency to con unsuspecting victims around the world out of millions of dollars with false promises that their money was being invested in cryptocurrency trading and mining."

"Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets," he added.

The representatives were first officially charged Aug. 18, 2020.

Since then, senior promoters Cecilia Millan, Jackie Aguilar and Karina Chairez each pled guilty to a series of wire fraud conspiracy, bank fraud conspiracy and money laundering conspiracy charges on Jan. 31, Feb. 8 and Feb. 22, while another founder, Gutenberg Dos Santos pled guilty to wire fraud and money laundering conspiracy charges on Oct. 21, 2021, according to the Mar. 8 statement.

These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud,” Williams added.

The operators have been ordered to forfeit their fraudulent proceeds of AirBit Club, which include fiat currency, real estate and Bitcoin (BTC), collectively valued at about $100 million.

Cointelegraph found there are still videos of the AirBit Club representatives marketing the membership scheme on YouTube.

The scheme often used the hashtag “#AirBitBillionaireClub” and shared several fake success stories of investors to try to lure in more victims.

California-licensed Attorney Scott Hughes, an attorney accused of laundering proceeds of the scheme, also pled guilty to money laundering charges on Mar. 2.

Rodriguez, Millan, Aguilar, Chairez and Hughes will be sentenced on different dates between June and August this year.

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‘Do not delay’ — ASIC warns Aussies to look for 10 signs of a crypto scam

November 8, 2022 Coin Telegraph

Australia Competition and Consumer Commission

The list comes out as part of Australia’s 2022 Scams Awareness Week.

Australia’s market regulator has released a list of the “top-10 ways to spot a crypto scam,” amid a detected rise in crypto-related investment scams this year.

The Australian Securities and Investment Commission’s (ASIC) public advisory statement was published as part of Scams Awareness Week 2022, an initiative that teaches Australians how to identify all forms of scams. The campaign takes place between Nov. 7 to 11.

ASIC said that Australians had already lost more through “investment scams” in 2022 than the total $701 million figure in 2021, while ASIC Deputy Chair Sarah Court attributed cryptocurrencies to the steep incline in investment scams over the last two to three years:

“The main driver of the increase was cryptocurrency investment scams, where losses increased by 270%. The ACCC have advised that losses to crypto scams have increased further in 2022.”

“Given this concerning trend, we want to arm Australians with the information they need to protect themselves from scammers,” she added.

As part of the advisory, ASIC stated that cryptocurrency scams fall into three categories. The first relates to scams where the victim believes to be investing in a legitimate asset. However, the crypto app, exchange, or website turns out to be fake.

The second scam involves fake crypto tokens used to facilitate money laundering activities, while the third type of scam involves the use of cryptocurrency to make fraudulent payments.

ASIC says top signs of a crypto scam include “receiving an offer out of the blue,” “fake celebrity advertisements” and being asked by a “romantic partner you only know on-line” to send money in crypto.

Other red flags include being asked to pay for financial services in crypto, being asked to pay more money to access funds, withholding investment earnings “for tax purposes” or being offered “free money” or “guaranteed” investment returns.

The markets regulator also said it was common for scammers to pressure victims into transferring crypto to their website. To prevent this issue, ASIC also advised crypto investors not to use web apps that aren’t listed on Apple Store or Google Play.

Other things to look out for is if “strange tokens appear in your digital wallet,” said ASIC.

If scammed, Court strongly advised victims not “to send any more money” to the scammer and to “block all contact” from them if their identity is known:

“Do not delay. Contact your bank or financial institution immediately to report the scam. Ask them to stop any transactions. Also, warn your family and friends so they can watch out for potential follow-up scams.”

A Nov. 7 report from the Australian Competition & Consumer Commission (ACCC) predicted Australian-targeted scam losses will reach $4 billion Australian dollars by the end of 2022.

The ACCC has received $10 million in seed funding as part of its budget to build a National Anti-Scam Center to support the community in its fight against cybercriminals, which was confirmed by Financial Services Minister Stephen Jones on Nov. 7.

David Koch, the host of the Australian breakfast show Sunrise, has called for the ACCC to demand more accountability on social media platforms like Facebook, Instagram and LinkedIn over the scam-like content that can be found on its platforms.

8 sneaky crypto scams on Twitter right now

August 22, 2022 Coin Telegraph

Coin Telegraph

A 19-part thread outlines the sophisticated strategies scammers are using to part crypto users from their funds.

Cybersecurity analyst Serpent has revealed his picks for the most dastardly crypto and non-fungible token (NFT) scams currently active on Twitter.

The analyst, who has 253,400 followers on Twitter, is the founder of artificial intelligence and community-powered crypto threat mitigation system, Sentinel.

In a 19-part thread posted on Aug. 21, Serpent outlined how scammers target inexperienced crypto users through the use of copycat websites, URLs, accounts, hacked verified accounts, fake projects, fake airdrops, and plenty of malware.

One of the more worrisome strategies comes amid a recent spate of crypto phishing scams and protocol hacks. Serpent explains that the “Crypto Recovery Scam” is used by bad actors to trick those who have recently lost funds to a widespread hack, stating:

“Simply put, they attempt to target people who have already been scammed, and claim they can recover the funds.”

According to Serpent, these scammers claim to be blockchain developers and seek out users that have fallen victim to a recent large-scale hack or exploit, asking them for a fee to deploy a smart contract that can recover their stolen funds. Instead they “take the fee and run.”

This was seen in action after the multimillion-dollar exploit affecting Solana wallets earlier this month, with Heidi Chakos, the host of the YouTube channel Crypto Tips, warning the community to watch out for scammers offering a solution to the hack.

Another strategy also leverages recent exploits. According to the analyst, the “Fake Revoke.Cash Scam,” tricks users into visiting a phishing website by warning them that their crypto assets may be at risk, using a “state of urgency” to get users to click the malicious link.

Another strategy uses “Unicode Letters” to make a phishing URL look almost exactly like a genuine one, but replacing one of the letters with a Unicode lookalike, while another strategy sees scammers hack a verified Twitter account, which is then renamed and used to impersonate someone of influence to shill fake mints or airdrops.

The remaining scams target users wanting to get in on a “get rich quick” scheme. This includes the “Uniswap Front Running Scam”, often seen as spam bot messages telling users to watch a video on how to “make $1400/DAY front-running Uniswap” which instead tricks them into sending their funds to a scammer’s wallet.

Another strategy is known as a “Honeypot Account” — where users are supposedly leaked a “private key” to gain access to a loaded wallet, but when they attempt to send crypto in order to fund the transfer of coins, they are immediately sent away to the scammers’ wallet via a bot.

Other tactics involve asking high-value NFT collectors to “beta test” a new Play-to-earn (P2E) game or project, or commissioning fake work to NFT artists — but in both cases, the ruse is merely an excuse to send them malicious files that can scrape browser cookies, passwords, and extension data.

Last week, a report from Chainalysis noted that revenue from crypto scams fell 65% in 2022 so far, due to falling asset prices and the exit of inexperienced crypto users from the market. Total crypto scam revenue year-to-date is currently sitting at $1.6 billion, down from roughly $4.6 billion in the prior year.

$5 wrench attacks appear to be on the rise in the crypto community

February 2, 2022 Coin Telegraph

$5 wrench attack

Security expert warns that individuals known to work in crypto are susceptible to becoming targets of extortion-related crimes.

Normally, the only way to access one's crypto funds is through their private key, which, thanks to advances in cryptography, would take nothing less than an advanced futuristic quantum computer to decipher. That said, mafias and gangs have managed to think outside the box. Instead of wasting their efforts on breaking the underlying cryptography, they've turned their attention to targeting crypto owners, themselves.

A $5 wrench attack is when someone finds out you have a lot of crypto and physically attacks or threatens you for your private keys. On Wednesday, at least eight men, including a police officer, were arrested in the city of Pimpri-Chinchwad, India, for allegedly kidnapping a crypto trader and demanding ransom. The arrested officer, Constable Dilip Tukaram Khandare, reportedly learned of the trader's 300 crore rupee ($40.13 million) crypto wealth via access to confidential data while working in the cybercrime department. The trader was let go after his friend filed a missing person report that prompted Khandare, who feared repercussions, to release him.

Similarly, last November, four assailants allegedly broke into American tech entrepreneur Dentzel Zaryn's home in Spain and attempted to coerce him into giving up his private keys. The tech entrepreneur reportedly holds $58 million worth in Bitcoin (BTC) across his wallets, with a significant portion of funds concentrated in one account. When Zaryn refused, he was subsequently tortured until he revealed the account information. The assailants left the property shortly after.

As Dr. Anon, a Cointelegraph staff member with expertise in such matters wrote in a related magazine piece:

These attacks are frequently "your money or your life" situations carried out by sophisticated, professional, and organized criminals. That said, one can significantly limit their losses by having a "decoy" crypto wallet with a small portion of funds. If a robbery, kidnapping, etc., were to occur, simply hand it over and alert authorities afterward. It's not worth the risk of getting tortured or killed for refusing to pay.

The same month, a crypto trader in Hong Kong was kidnapped by triad gang members who demanded $30 million Hong Kong dollars ($3.85 million) in ransom. Police managed to raid the kidnappers' residence and rescue the trader, but not before being held in captivity for over a week — including being beaten with hammers during interrogations. According to reports, kidnappers first demanded an $8 million ransom in Hong Kong dollars ($1.03 million), which was only raised to $30 million Hong Kong dollars after the triad discovered the victim had a lot of USDT in his account. "It's maybe best to stay silent, keep a low profile, especially online, and make up a cover story if ever prompted about what you do," writes Dr. Anon, "even if you have a decoy wallet, criminals could always get the wrong impression about your financial status and demand a ransom greater than your entire net worth, and it'd be pretty tough to get out of that one."

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