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Weekly Update #34

MARK COLLINS & DEMETRIOS TSEAS

Regulatory:

Four individuals charged for laundering millions from cryptocurrency investment scams: Four US nationals were charged for exfiltrating nearly $80M as part of a cryptocurrency investment scam. The individuals would open shell companies and bank accounts to launder the money they would extract from the victims lured into the schemes via dating apps, instant messaging platforms and social media. The fraudsters now face up to 20 years in prison. DOJ

US court approves order for Binance to pay US$2.7 billion to CFTC: A US federal judge has approved the order for the cryptocurrency giant Binance to pay $2.7B for money laundering. This comes following the CEO’s admission to breaking US anti-money laundering laws in the world’s biggest cryptocurrency exchange. TheBusinessTimes 

Spain’s Central Bank partners with three companies to test CBDC: On Jan 3, Banco de España, Spain’s Central Bank, published a resolution announcing its partnership with Cecabank, Abanca, and Adhara Blockchain., to test a wholesale central bank digital currency (CBDC).  The testing of the wholesale CBDC will involve simulating the processing and settlement of interbank payments using a single tokenized wholesale CBDC and multiple wholesale CBDCs issued by different central banks, while in another her part of the experiment, the wholesale CBDC will be used to settle a simulated tokenized bond.

Central Bank of Nigeria approves the launch of a Nigerian Naira stablecoin: The Africa Stablecoin Consortium (ASC), a consortium of Nigerian financial institutions, fintechs, and blockchain experts, is set to launch a compliant Nigeria Naira (cNGN) stablecoin on February 27, 2024.  cNGN is a stablecoin pegged 1:1 to the Nigerian Naira (1 cNGN=1NGN), backed 100% by ASC’s reserves and can move easily across the blockchain.  ASC states via its website that cNGN is compliant with the regulatory requirements and standards set by the CBN, the Securities and Exchange Commission (SEC), the Nigerian Financial Intelligence Unit (NFIU), and engages with them to ensure compliance, consumer protection, and transparency.

Huobi Korea will be shutting down its services on Jan 29, 2024: Huobi Korea announced it will be shutting down its services on January 29, 2024, citing a difficult “business environment” as the reason for the closure and following shut down of other South Korean exchanges such as Cashierest and Coinbit in November.

South Korean regulator to weigh in on banning crypto purchases with credit cards: The Financial Services Commission (FSC) in South Korea is considering a ban on using credit cards for cryptocurrency purchases, aiming to address concerns about the “illegal outflow of domestic funds overseas. In addition, the FSC had previously suggested rules to safeguard crypto exchange users, mandating the storage of at least 80% of customer deposits in cold wallets and requiring exchanges to compensate customers for using their deposits. FSC & Press release

Hacks and Exploits:

Tallying up 2023 hack statistics: In 2023 hackers and scammers caused a total loss of $1.8 billion, with 17% attributed to the Lazarus Group linked to North Korea, according to a report from Immunefi. The year’s largest hacks included Mixin Network ($200 million), Euler Finance ($197 million), and Multichain ($126 million), with law enforcement identifying $309 million associated with the Lazarus Group, indicating a 52% decline in losses compared to the previous year. Immunefi

A supply chain attack on crypto hardware wallet ledger led to the theft of $600K: A threat actor has stolen $600K worth of virtual assets by targeting crypto hardware wallet Ledger. Using a phishing email containing a malicious script, the actor targeted a module within Ledger’s main package manager, therefore uploading a crypto drainer. Nonetheless, Ledger security teams were able to bring down the malware, delete the malicious modules and made Tether aware who then froze the addresses. Securityaffairs

Atomic Wallet launches $1M bug bounty amid hacking lawsuit: The Atomic Wallet developer has launched a $1M bug bounty for whitehat hackers to find vulnerabilities in its open-source code. Critical risk vulnerabilities will receive a reward of up to $100k. The announcement comes amid a class-action lawsuit against the company, following the exfiltration of $100M worth of crypto. CoinTelegraph

Former Amazon engineer pleads guilty to stealing $12.3M of crypto in first ever hacking case involving smart contracts: A former security engineer has hacked the codes of two cryptocurrency exchange platforms, resulting in $12.3M of stolen crypto. The engineer exploited a vulnerability in the platforms’ smart contracts, submitting false statements which lead to millions in revenue. The hack comes amid an increasing number of attacks targeting the open-source codes of the smart contracts. Business Insider

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