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May 1, 2020

  • Introducing CipherTrace Armada™ for Financial Services
  • North Korean Regime Uses Gains from Cryptocurrency Crimes to Fund Weapons Program
  • Updated Libra White Paper Addresses Areas of Concern
  • China Jumps Ahead with Blockchain-Based Services Network (BSN)
  • EOS Ecosystem Wallet Scams Users out of $52 Million
  • Ethereum Hacker Swipes $25 Million from Protocol
  • Virtual Events – Free Webinars + Key Consensus 2020 Sessions + Certified Examiner CipherTrace Training


CipherTrace Armada™ Gives Banks Visibility on the Crypto in Their Networks

With the average large American bank processing $2 billion in cryptocurrency annually, and regulators beginning to crack down on illicit crypto transactions, it is vital that financial institutions gain the ability to monitor the crypto on their networks.

CipherTrace Armada™ integrates into existing automated transaction matching systems. With our latest offering, banks can:

  • Flag high-risk payments between banks and VASPs
  • Uncover risk associated with hundreds of VASPs and other virtual asset entities
  • Identify unregistered crypto MSBs and P2P schemes
  • Manage risks related to virtual asset customers, which includes the ability to safely bank lucrative exchange customers

Read about the launch and how Armada™ how it helps mitigate virtual asset money laundering risks at major financial institutions

Explore the solution:

Receive a copy of the Armada versus the Unregistered MSB Use Case here:


North Korean Hackers Pose Threat to International Finance

On April 15th, Bloomberg reported that four U.S. government departments issued a joint warning that North Korea’s cybercrime activities threaten the “integrity and stability of the international finance system.” The advisory cautioned that the North Korean regime is using money laundering and illegal cryptocurrency mining to fuel its weapons of mass destruction programs, despite heavy sanctions.

The U.S. has frequently urged the international community to adhere to sanctions against North Korea and has requested collaboration on information sharing and deployment of enhanced cybersecurity practices. John Hultquist, senior director of intelligence analysis at the cybersecurity firm FireEye Inc., said this recent warning offered “more evidence that North Korea is heavily invested in their cyber capability and taking every opportunity to leverage and monetize it.”

An earlier advisory issued by the U.S. and U.K. focused on the growing number of phishing attacks playing on coronavirus fears. According to the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency and the U.K.’s National Cyber Security Centre, “The surge in teleworking has increased the use of potentially vulnerable services, such as virtual private networks (VPNs), amplifying the threat to individuals and organizations.”

Why it matters: The uptick in cyberattacks in the wake of the coronavirus pandemic underlines the importance of international cooperation when it comes to identifying cybercriminals and reducing the impact of malicious actors. Banks and other financial institutions should increase vigilance against coronavirus phish and money laundering controls—especially when it comes to detecting cryptocurrency related payments in their networks. Last month CipherTrace released a detailed case study on how Chinese nationals linked to North Korea laundered hundreds of millions of dollars’ worth of stolen cryptocurrency through several banks.

Read the analysis here:

Read the full Bloomberg story:

Read the COVID-19 Alert:


Libra 2.0

On April 16 Libra released its updated white paper, which places new emphasis on compliance, privacy, and security. The latest white paper includes provisions to ensure compliance with AML, sanctions, anti-terrorism financing, and Travel Rule regulations. Libra also sought to assuage fears that the multi-currency Libra Coin would “interfere with monetary sovereignty and monetary policy if the network reaches significant scale and a large volume of domestic payments are made in ≋LBR.”

The White Paper v2.0 Cover Letter from the Libra Association states they are “augmenting the Libra network by including single-currency stablecoins in addition to ≋LBR, initially starting with some of the currencies in the proposed ≋LBR basket (e.g., LibraUSD, LibraEUR, LibraGBP, LibraSGD).”

Why it matters: These developments underline the reality that the world is moving fast towards dependence on digital currencies, with compliance and privacy factoring strongly in ongoing discussions.

Read the updated Libra white paper:


China Launches Major Blockchain Initiative

On April 25th, China launched its mainland commercial Blockchain-based Services Network (BSN), with a global launch scheduled for June 25th. China’s fast work on developing what will likely be the first central bank digital currency (CBDC) has stolen most of the spotlight to-date, allowing its BSN to progress under-the-radar. According to a recent CoinDesk article, “The BSN will be the backbone infrastructure technology for massive interconnectivity throughout the mainland, from city governments, to companies and individuals alike.” The government plans to expand BSN to 200 cities, as well as to the country’s myriad of trade partners around the globe.

Why it matters: President Xi has positioned himself to be among the most forward-thinking leaders when it comes to the potential applications of blockchain technology, having made major strides since announcing blockchain as an area of focus in October 2019. Given the eventuality of currency digitization and use of blockchain technology in payment networks, China will have a distinct advantage in influencing standards and setting the tone in both areas. As such, China’s BSN could have major geopolitical and macroeconomic implications.

Read the full CoinDesk story:


Digital Wallet That Promised Big Returns on EOS Deposits Has Run Away with $52 Million

On April 20th, a report came out revealing another crypto exit scam. EOS Ecosystem, a wallet that enticed investors with promises of favorable returns, stole close to $52 million from users.

A local Chinese media investigation found that, as of the morning of April 20th, 19.36 million EOS tokens (equivalent to $52 million) had been transferred into an EOS account apparently belonging to the EOS Ecosystem business. Transaction metadata indicates that the funds may have already been siphoned into an exchange, which promised to freeze the funds upon detection.

The scam appears to have been conducted by a team called “” The group claimed to be part of a Chinese EOS network crypto wallet company in order to garner attention from investors and run their scam operation.

Unfortunately, scams are a byproduct of lack of visibility on the part of banks, exchanges, and other financial institutions. By helping FIs and VASPs to identify illicit financial flows quickly, CipherTrace can ensure bad actors are not using their payment networks and services to get away with scams and other crimes that make the entire cryptocurrency market less attractive.

Read the full Cointelegraph story:


Hacker on Compromises DeFi Protocol to Steal $25 Million in Crypto

On April 19th, Cryptoslate reported that an Ethereum user had stolen over $25 million worth of cryptocurrency from, a decentralized lending protocol operated by Chinese DeFi upstart dForce. The perpetrator had created the address attached to the hack in the hours leading up to the theft, and efforts to identify the criminal in question have come up short. Within a few hours had lost 57 percent of its value and warned users to halt any deposits into the protocol.

Ultimately, the hacker managed to slip away with $25 million worth of Ethereum, Tether’s USDT, and various other tokens, wiping the protocol clean. In the wake of the attack, has silenced their Twitter account and taken down their website. As of April 19th, issued a statement that legal action is imminent in addition to private negotiations that are already underway to recover the stolen funds from the hacker.

Read the full Cryptoslate story:

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