ReportWire

Tag: Crypto Scams

  • 62% of Crypto Press Releases Come From High-Risk or Scam Projects: Chainstory

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    High-risk and scam-adjacent projects have been found to dominate press release volume.

    A majority of press releases published across crypto news sites originate from high-risk or outright fraudulent projects.

    In a new report, crypto communications firm Chainstory analyzed 2,893 crypto press releases published between June 16 and November 1, 2025, and found that roughly 62% were issued by projects classified as either High Risk or confirmed Scams, based on indicators such as anonymous teams, unrealistic return claims, and cross-referencing with legal and consumer scam databases.

    Low-Impact Updates

    Crypto-specific press release “wires” operate on a pay-to-play model that allows projects to buy guaranteed placement across partner media sites, and, in the process, bypass traditional editorial judgment. Unlike legacy wire services that distribute releases for journalists to evaluate, many crypto wires sell direct publication to audiences with minimal compliance checks. This effectively turns article placement into a paid commodity.

    Chainstory said that any crypto project with sufficient budget can secure visibility on recognizable news domains regardless of credibility.

    The analysis revealed that most wire content consists of low-impact announcements that would typically be ignored by newsroom editors. Nearly half of all releases, or 49%, focused on routine product or feature updates, while another 24% covered exchange listings and trading promotions. Token launches and tokenomics changes accounted for 14% of releases.

    On the other hand, only 58 releases, approximately 2% of the dataset, related to traditionally newsworthy events such as venture funding rounds, mergers and acquisitions, or major corporate finance activity.

    Promotional Hype Dominates Crypto Wire

    Chainstory also examined tone and language, finding that promotional framing dominates crypto press releases. Only around 10% were written in a neutral, factual style, while approximately 54% were categorized as “overstated” and another 19% as overtly promotional. The report observed that superlative-heavy language common in marketing copy remains unchallenged in paid releases, even when similar claims would be edited or questioned in reported journalism.

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    Risk profiling of issuers revealed a heavy skew toward questionable projects. High-risk issuers accounted for 35.6% of all releases, while confirmed scams made up 26.9%. Low-risk, established projects were responsible for only about 27% of press releases, which indicates that more credible firms rely less on paid distribution and are more likely to receive organic coverage. In sectors such as cloud mining, almost 90% of press releases came from projects flagged as high risk or scams.

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  • Ledger Users Targeted in Phishing Scam Following Global-e Data Breach

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    The suspected scammers are using leaked order data to personalize messages, making the emails much harder to dismiss.

    Cybercriminals have reportedly launched a targeted phishing campaign using a fake merger between cryptocurrency hardware wallet manufacturers Ledger and Trezor.

    This follows a recent data leak at Ledger’s third-party e-commerce partner, Global-e.

    Details of the Phishing Scam

    On January 5, Ledger disclosed to its customers via email that Global-e had suffered a data breach, exposing customer information, including names, email addresses, phone numbers, and order details. Shortly after the incident was made public, affected users began receiving phishing emails falsely claiming that the two companies had merged. Screenshots of the fake communications have since been shared on X.

    “We are pleased to announce that after months of strategic discussions, Ledger and Trezor have finalized a merger agreement. This landmark partnership unites two industry leaders with a shared vision of providing the highest standard of security for digital asset management,” read the message.

    The email further stated that the decision would allow the two firms to accelerate innovation, expand their product offerings, and continue their commitment to protecting clients’ assets. Recipients were also instructed to “migrate” their wallets by entering their 24-word recovery phrases on a fake website designed to mimic official branding.

    In response to the attack, Global-e has reportedly launched an internal investigation into the hack and is working with cybersecurity experts to assess the scope of the incident. Meanwhile, the company has not disclosed the exact number of affected users but confirmed that the breach was limited to contact and order information.

    Ledger has also reportedly notified relevant data protection authorities and is cooperating with law enforcement agencies.

    A History of Data Breaches

    This episode is not the first time Ledger has been involved in such a scandal. In 2020, attackers also accessed its e-commerce and marketing databases, exposing the personal information of hundreds of thousands of users.

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    The disclosed data included email addresses, names, phone numbers, and physical addresses, with affected users later reporting receiving phishing emails and threats. At the time, the wallet manufacturer faced public criticism for its delayed disclosure and inadequate safeguards, which resulted in a formal lawsuit being filed against it and Shopify.

    The company later confirmed that a rogue Shopify employee was responsible for leaking the personal details of approximately 20,000 customers. This was followed by a separate attack later that year, in which the data of about 292,000 customers was published online.

    More recently, the firm suffered another security incident, resulting in the theft of approximately $600,000 in cryptocurrency after a wallet drainer was inserted into a library used by multiple decentralized applications to connect to their devices.

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  • Crypto Exploits Decline Sharply, With Only $76M Stolen in December 2025

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    December’s losses were spread across 26 incidents, showing fewer large-scale breaches rather than a total absence of attacks.

    Blockchain security firm Peckshield has shared that December 2025 closed with a surprising decrease in crypto exploit losses.

    On-chain data shows the figures fell by 60% compared with those recorded in November.

    $76 Million Lost Across 26 Incidents

    According to the Peckshield report revealed via X, hacks and cybersecurity exploits in the crypto sector dropped in December 2025, with only $76.2 million stolen across 26 major incidents. This figure represents a 60% decrease from November’s $194.2 million.

    The largest single hack during the period was a $50 million address-poisoning scam, where attackers mimicked wallet addresses to trick a user into misdirecting funds. Another notable incident involved a $27.3M multisig breach on a wallet identified as 0xde5f…e965, which was compromised due to a private key leak.

    Other attacks that made it to the top 5 include the exploit of babur.sol, which resulted in $22 million in losses. The Trust Wallet hack, which occurred around Christmas, involved a trojanized Chrome extension uploaded via a compromised Web Store API key and GitHub secrets, leading to the theft of $8.5 million in user funds.

    Unleash Protocol also suffered a $3.9 million loss in December after a hacker gained control of its multisig governance and executed an unauthorized contract upgrade. Meanwhile, the Flow blockchain experienced a $3.9 million breach caused by an execution layer vulnerability that allowed the attacker to mint and transfer assets across services before the network was halted.

    Crypto Industry Loses Over $2.2 Billion in 2025 Hacks

    Despite the December dip, on-chain data reveals that 2025 was another challenging year for the digital asset sector, with over $2.2 billion lost in the top 10 hacks. Bybit’s $1.4 billion breach in February, which saw attackers drain approximately 401,000 ETH from the exchange’s wallets, remains the year’s most devastating hack.

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    Other major incidents included Cetus, a concentrated-liquidity DEX on Sui, which lost $223 million in May after attackers exploited a protocol flaw to manipulate pricing and drain liquidity.

    Balancer V2 also suffered a $128 million exploit in November linked to a rounding-error bug in its composable stable pools, while Bitget reported roughly $100 million lost in April due to manipulation of its VOXEL market-making infrastructure.

    Centralized exchanges were also targeted, with Phemex experiencing an $85 million hot wallet breach in January and Iran-based Nobitex falling victim to $80–90 million stolen from hot wallets in June. In each case, the platforms froze withdrawals, protected the remaining assets, and worked to resume services, while the amount recovered from the losses differed.

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  • SEC Uncovers $14M Crypto Scam Using Fake AI Tips and WhatsApp Investment Clubs

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    The complaint alleges seven entities misused AI buzzwords and crypto promises to defraud US retail investors of $14 million.

    The US Securities and Exchange Commission (SEC) has charged three entities that claimed to operate crypto asset trading platforms, along with four so-called investment clubs, for allegedly running a large-scale fraud that targeted retail investors through social media.

    According to the SEC, Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc., together with AI Wealth Inc., Lane Wealth Inc., AI Investment Education Foundation Ltd., and Zenith Asset Tech Foundation, misappropriated more than $14 million from mostly US-based investors. The regulator said the scheme operated from at least January 2024 to January 2025 and followed a familiar pattern seen in many modern online investment scams.

    Fake Crypto Platforms, Real Losses

    The SEC alleges that the defendants first attracted victims using advertisements on popular social media platforms, and promised easy profits and advanced, AI-generated investment advice. Interested users were then invited to join WhatsApp group chats, where scammers posed as experienced financial professionals and slowly built trust by sharing what they claimed were successful AI-powered trading tips.

    Once investors were convinced, they were encouraged to open accounts and deposit money on purported crypto trading platforms run by Morocoin, Berge, and Cirkor. These platforms allegedly claimed to be properly licensed and regulated, including making false statements about government approval.

    The SEC says this was not true. The complaint further alleges that the investment clubs promoted fake “Security Token Offerings,” which they said were linked to real companies. In reality, no such companies or offerings existed, and no actual trading ever took place on the platforms.

    When investors later attempted to withdraw their funds, the defendants allegedly demanded additional upfront fees, a tactic often used to extract even more money from victims. According to the agency, all investor funds were ultimately misappropriated and funneled overseas through a complex network of bank accounts and crypto wallets.

    In a statement, Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, said

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    “Our complaint alleges a multi-step fraud that attracted victims with ads on social media, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated.”

    AI-Powered Fraud

    In addition to AI-generated investment advice, AI deepfakes have also increased significantly. Fraudsters are increasingly using artificial intelligence to produce realistic videos that appear to show well-known figures, such as X owner Elon Musk, endorsing bogus investment schemes on social media. Scammers are also exploiting AI to get around KYC checks, forge customer support conversations, and replicate platform dashboards to appear legitimate.

    In some cases, they have even abused Zoom meetings by sending fake invites that contain links to malicious software.

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  • Private Key Leakage Remains the Leading Cause of Crypto Theft in Q3 2025

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    Based on a report by SlowMist, private key leakage remains the leading cause of crypto theft, accounting for 317 stolen fund reports in Q3 2025.

    Slowmist’s MistTrack’s Stolen Funds Analysis shows that private key leaks remain the most common cause of crypto theft.

    The findings indicate that 317 stolen fund reports were filed between July and September, with assets worth more than $3.73 million successfully frozen or recovered in ten of those cases.

    Private Keys Remain the Core Vulnerability

    The report highlights that most crypto thefts rely on compromised credentials rather than sophisticated attacks. It notes that unauthorized dealers continue to sell fake hardware wallets, which remain a common scam. These devices often contain pre-written seed phrases or have been tampered with to secretly capture recovery information, allowing attackers to access funds once victims deposit assets.

    SlowMist advised users to only  purchase hardware wallets through authorized vendors, create seed phrases on their device, and try tiny transfers before transferring large sums of money. Simple checks, such as verifying packaging integrity and avoiding pre-set recovery cards, can help prevent losses.

    Attackers are also developing new methods using phishing and social engineering. The report examined some occurrences of EIP-7702 delegate phishing, where compromised accounts were linked to contracts that automatically drained assets once a transfer was initiated. In such cases, victims believed they were engaging in regular activity, but hidden authorizations allowed hackers to gain control.

    The analysis shows that social engineering remains a persistent threat, with phishers posing as recruiters on LinkedIn and building trust with job candidates over several weeks before convincing them to install “camera drivers” or other malicious code. In one case, attackers paired the program with a manipulated Chrome extension during a Zoom call, leading to losses of more than $13 million.

    Old Phishing Scams Remain Effective

    Traditional methods also continued to prove effective. Fraudulent Google ads cloned legitimate services such as MistTrack, while spoofed dashboards for decentralized finance platforms like Aave generated over $1.2 million in losses through hidden authorization requests. The exploiters also hijacked unused Discord vanity links left in project folders to trick communities.

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    Another attack vector disguises malicious commands as CAPTCHA verifications, tricking victims into copying code that steals wallet data, browser cookies, and private keys.

    SlowMist explained that Web3 exploits are not about complex tricks but involve hackers taking advantage of everyday actions. That being said, simple actions like slowing down, double-checking sources, and avoiding shortcuts are the best ways to stay safe in a space where threats keep changing.

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  • Ex-Mine Digital CEO Faces Charges Over $1.5M Embezzlement

    Ex-Mine Digital CEO Faces Charges Over $1.5M Embezzlement

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    Grant Colthup, the former CEO of ACCE Australia, is facing a single fraud charge following an investigation by the Australian Securities and Investments Commission (ASIC).

    Colthup, who appeared in the Magistrates Court at Ipswich, Queensland, was charged with embezzling $1.47 million (2.2 million Australian dollars) from a customer.

    $1.5M Bitcoin Payment Goes Missing

    From May 2019 to September 2022, ACCE ran a digital asset exchange platform that provided cryptocurrency trading services to customers under the “Mine Digital” brand.

    According to a press release, the incident dates back to July 2022, when a customer paid the company $1.5 million to buy Bitcoin but never received the cryptocurrency.

    ASIC alleges that instead of delivering the Bitcoin, Colthup used the customer’s funds to cover the financial liabilities of ACCE and to purchase cryptocurrency for other clients.

    The charge, filed under Section 408C of Queensland’s Criminal Code 1899, carries a maximum penalty of 20 years in prison. The case has been adjourned to December 16, 2024, and will be prosecuted by the Office of the Director of Public Prosecutions.

    ACCE’s Legal Troubles

    This legal development is just one of many controversies that have affected ACCE and Mine Digital. The company collapsed in September 2022, leaving creditors scrambling to recover approximately $16 million in owed funds.

    The collapse of the Queensland-based exchange was handed over to administrator Brad Tonks of PKF in September 2022, just weeks before the infamous crash of the U.S.-based exchange, FTX.

    At the time, a local publication, the Australian Financial Review, reported that Tonks’ subsequent investigations of the company had brought to light troubling financial discrepancies, including limited records, an irregular balance sheet, and the existence of just $20,000 in assets.

    In a statement to creditors, The PKF partner noted that substantial digital assets appeared to have been transferred out of ACCE before the administration, with insufficient records available to track the transactions.

    “Investments made by clients into digital assets do not appear to have been recorded on the company’s balance sheet,” Tonks reported.

    Furthermore, the collapse occurred shortly after a legal dispute with a self-managed superannuation fund regarding a separate $1.6 million investment loss in 2020. The fund alleged that ACCE did not take adequate steps to prevent a social engineering scam known as “500 Investments.”

    Although the exchange defended itself in this case, the incident contributed to its increasing legal challenges.

    By December 2022, PKF had been appointed as the official liquidator of ACCE, and Tonks began legal proceedings against Colthup to recover the $16 million owed to creditors.

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  • Widespread FBI Investigation: Over $25 Million in Crypto Seized, Three Companies Charged

    Widespread FBI Investigation: Over $25 Million in Crypto Seized, Three Companies Charged

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    Three crypto companies and 15 individuals have been charged with extensive fraud and market manipulation. This follows an unprecedented investigation by the US Federal Bureau of Investigation (FBI), which involved creating a new digital token to help expose criminal activity in the sector.

    Federal prosecutors in Boston announced charges against Gotbit, ZM Quant, and CLS Global, as well as their leaders and employees. This led to four arrests, five guilty pleas, and the seizure of over $25 million in crypto.

    Acting US Attorney Joshua Levy highlighted that the defendants engaged in sham trades to artificially inflate trading volumes of various tokens, ultimately leaving innocent investors “holding the bag.”

    According to the report by the South China Morning Post, Levy characterized the case as a blend of modern technology and traditional fraud, specifically referencing a “pump and dump” scheme that has long plagued financial markets.

    As part of the investigation, the FBI established a crypto company called NexFundAI, which operated a token on the Ethereum blockchain that ZM Quant, CLS Global, and another firm, MyTrade, agreed to manipulate. This token was closely monitored to prevent retail investors from buying it before trading was disabled.

    The Securities and Exchange Commission (SEC) has also filed related civil cases. Among the companies charged was Saitama, whose market value soared to $7.5 billion primarily due to the manipulation of its tokens by its leadership, including CEO Manpreet Singh Kohli, who was arrested in the UK.

    Meanwhile, Gotbit’s CEO, Aleksei Andriunin, was apprehended in Portugal, while two of his company’s employees in Russia were also charged as part of the ongoing investigation. Federal prosecutors in Boston outlined that from 2018 to 2024, Gotbit engaged in “wash trading” and other manipulative practices on behalf of crypto clients in a bid to boost token trading volumes.

    Several other individuals involved in market-making operations, including Liu Zhou and Riqui Liu, have also been charged.

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  • 86-Year-Old Gets 5 Years Probation for $15M Crypto Ponzi Scheme

    86-Year-Old Gets 5 Years Probation for $15M Crypto Ponzi Scheme

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    An 86-year-old former attorney, David Kagel, has been sentenced to five years of probation for organizing a multimillion-dollar cryptocurrency Ponzi scheme that defrauded investors out of nearly $15 million.

    The judgment, filed on October 8 in a Las Vegas federal court, also requires him to pay $14 million in restitution to his victims.

    $15M Crypto Ponzi Scheme

    U.S. District Judge Gloria Navarro handed down the sentence following Kagel’s guilty plea to one count of conspiracy to commit commodity fraud in May.

    Court documents reveal that the scheme, which ran from December 2017 to June 2022, involved misleading investors into believing they were putting money into a cryptocurrency bot trading program that promised high returns and minimal risk.

    According to prosecutors, Kagel and his two accomplices lured victims by falsely claiming their investments would yield profits between 20% and 100% within just 30 days. The trio assured potential investors that their principal amounts would be fully repaid.

    Through these fraudulent promises and deceptive schemes, the three collected around $15 million from victim investors for several cryptocurrency trading programs.

    However, instead of generating profits, the perpetrators later used new investors’ funds to pay off earlier ones in a typical Ponzi scheme fashion. This left many of the victims facing significant financial losses.

    False Bitcoin Claims and Forged Documents

    Kagel was instrumental in winning the trust of victims. Leveraging his professional background as a lawyer, he forged letters on his firm’s letterhead to make the scheme appear legitimate.

    In 2018, he falsely claimed to own 1,000 bitcoins worth $11 million at the time as a guarantee for the investments. The former attorney also lied about his prior experience with crypto investing, convincing potential backers of the scheme’s credibility.

    In 2023, the California Supreme Court revoked his law license after he failed to respond to disciplinary charges related to misappropriating $25,000 in client funds. His license had also been suspended for other violations on two separate occasions, one in 1997 and the other in 2012.

    Kagel will serve his probation at a senior living facility in Las Vegas, where he is also receiving hospice care. Should the perpetrator leave the premises, he will be required to wear a monitoring device to ensure compliance with the terms of his sentence.

    His co-conspirators, David Saffron and Vincent Mazzota, have pleaded not guilty and are awaiting trial in a Los Angeles federal court scheduled for April 2025.

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  • Aussies Lose $122 Million to Crypto Scams, With Younger Victims Now Leading

    Aussies Lose $122 Million to Crypto Scams, With Younger Victims Now Leading

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    Australians reportedly lost at least AUD 180 million (approximately $122 million) to cryptocurrency investment frauds over the past year.

    Victims under 50 now make up around 60% of scam reports, overtaking older Australians, who are typically considered more vulnerable to such projects.

    Crypto-Based Investment Scams in Australia

    The data, gathered by the Australian Cyber Security Centre (ACSC) from police reports via cyber.gov.au, shows total losses of AUD 382 million (approximately $269 million) to investment scams in the 2023-24 financial year, with 47% of these losses attributed to cryptocurrency.

    Moreover, around 60% of these reports came from Australians under 50. AFP Assistant Commissioner Richard Chin highlighted that this data challenges the misconception that only older individuals fall victim to fraud.

    Chin emphasized that bad actors frequently employ high-pressure tactics and a variety of methods to deceive victims into making poor investment choices, with “pig butchering” schemes and deepfake technology being two widespread strategies.

    He also advised the community to remain cautious and avoid feeling pressured to invest while encouraging individuals with doubts to cease communication, seek independent financial advice, and report any suspected investment scams to their financial institution or digital currency exchange, as well as to alert the authorities through cyber.gov.au.

    Chin said that the AFP and its policing partners are closely collaborating with the banking industry and digital currency exchanges to assist victims of investment scams and attempt to recover funds lost to bad actors.

    Chin also added,

    “If an investment opportunity sounds too good to be true, then it probably is. Financial gain is what motivates most scammers however stolen funds could be used to bankroll future criminal ventures such as money laundering, trafficking illicit drugs, or human exploitation. We have seen instances where people are exploited and made to work in horrific conditions for organized crime groups to scam people.”

    Investment Scams in Australia

    Earlier this month, the Australian Securities and Investments Commission (ASIC) disclosed that it had closed down 615 cryptocurrency investment scams in the first year of its effort to address fraudulent investment websites.

    The Australian government’s Fighting Scams initiative relies heavily on ASIC’s capability to take down investment scam websites, playing a critical role in thwarting fraud and protecting Australians.

    Suspicious websites are referred to a dedicated cybercrime detection firm, and once evidence of malicious activity is confirmed, the takedown is carried out, usually with input from various government and industry partners. ASIC’s joint efforts with the National Anti-Scam Centre (NASC) have contributed to reducing such losses from $1.5 billion in 2022 to $1.3 billion in 2023.

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  • Interpol Issues Red Notice for Hong Kong Crypto Promoter Linked to $384K Scam

    Interpol Issues Red Notice for Hong Kong Crypto Promoter Linked to $384K Scam

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    Hong Kong native and crypto promoter Wong Ching-kit has entered the radar of the International Criminal Police Organization (Interpol) for his suspected role in several criminal cases, the latest being a cryptocurrency scam involving over HK$3 million ($384,310).

    According to a report from the South China Morning Post, Interpol has issued a red notice against Ching-kit, alerting global law enforcement that he is wanted for one count of fraud and two counts of theft in Hong Kong.

    Interpol Goes After Crypto Promoter

    Ching-kit, also known as the “Coin Young Master,” has a rough past filled with violations of Hong Kong law. The 30-year-old man was named Kwan Tsz-kit at birth but changed his name after being convicted of theft and sentenced to 160 hours of community service in 2012 while he worked as a swimming instructor.

    Six years ago, Ching-kit also pulled a stunt that involved throwing over HK$6,000 ($768) from a rooftop in Sham Shui Po district. Local police arrested him on suspicion of disorderly conduct in public, and he was eventually granted bail. A few days after the incident, Ching-kit donated HK$92,000 ($11,785) to a restaurant in Sham Shui Po to serve over 3,800 meal boxes to underprivileged residents. This happened barely 15 minutes after speaking with Chan Cheuk-ming, the business owner.

    When asked why he shared the free meals, Ching-kit told reporters that the gesture was an attempt to appeal to the local public. He added that people who intend to make cash or kind donations should not cause nuisances.

    Despite his attempt to appeal to the public, Ching-kit is being investigated for several criminal cases by the Hong Kong police force’s Commercial Crime Bureau. Sources familiar with the matter said local police also sought Interpol’s help to find Ching-kit’s 26-year-old former associate, Mok Tsun-ting, who is wanted for two counts of money laundering.

    Crypto Crimes Surge in Hong Kong

    Crypto crimes in Hong Kong have been surging recently. Last week, CryptoPotato reported that local police arrested three individuals for defrauding a businessman of HK$3.11 million ($399,000) in crypto assets by offering him bundles of counterfeit HK$1,000 banknotes.

    Another incident reported earlier this month entailed kidnappers demanding a ransom of HK$5.15 million to be sent as 660,000 USDT after abducting a 3-year-old boy from a shopping mall.

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  • Tether CEO Alerts: Email Newsletter Provider for Crypto Companies Might Be Compromised

    Tether CEO Alerts: Email Newsletter Provider for Crypto Companies Might Be Compromised

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    Paolo Ardoino, CEO of Tether, has issued a warning about a possible security breach involving a prominent email vendor frequently used by cryptocurrency companies.

    CoinGecko’s co-founder and COO, Bobby Ong, supported the caution, noting that the cryptocurrency data platform’s newsletter service might also be affected.

    Email Vendor Compromise

    In a post on X, Ardoino stated that they had received two independent confirmations indicating that a prominent vendor commonly used by crypto companies to manage mailing lists might have been compromised.

    He added that they are not disclosing the vendor’s name until the investigation is complete, but advised caution regarding any emails suggesting crypto-airdrops received in the past 24 hours.

    CoinGecko’s co-founder and COO, Bobby Ong, corroborated the warning in a public service announcement on X. He alerted the community to an ongoing supply chain email breach attack, indicating a potential impact on CoinGecko’s newsletter service. Ong emphasized the broader implications, noting that various crypto companies could be affected by email blasts promoting fraudulent token launches.

    Email Phishing Threats

    Email-related security breaches are not new to the crypto industry. Last year, blockchain-based metaverse company The Sandbox reported a similar incident where a security breach led to an email phishing campaign. The breach allowed unauthorized access to email addresses, which were then targeted with phishing messages falsely claiming to be from the project itself.

    The Sandbox claimed that an unauthorized third party gained access to an employee’s computer and used the obtained information to send the fake emails. Other prominent crypto firms, including Nansen, Celsius, OpenSea, and Ledger, have also experienced similar exploits in recent years.

    Phishing is a technique used by hackers to lure a victim into clicking on a malicious link sent via emails or messages that appear to be from trusted companies. The goal is to trick individuals into disclosing personal information, like passwords and credit card numbers.

    As investigations continue, both Tether and CoinGecko have advised users to exercise heightened caution with email communications, especially those promising crypto-airdrops or new token launches.

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  • 50% of Solana’s Recent Token Launches Revealed as Malicious Scams: Report

    50% of Solana’s Recent Token Launches Revealed as Malicious Scams: Report

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    Despite network outages, Solana has witnessed a flurry of projects launched on top of its blockchain. Such a trend typically depicts a growing demand. But the latest report paints a different picture.

    These fraudsters were found to be capitalizing on users’ heightened risk appetite, fueled by FOMO amidst a market-wide resurgence.

    • In a report shared with CryptoPotato, blockchain security company Blockaid revealed that 50% of recent pre-sale token launches on Solana have been malicious. The strategies employed by fraudsters within the popular Layer 1 ecosystem closely resemble those observed in other cryptocurrency platforms.
    • This includes leveraging social engineering platforms such as Telegram, Twitter, and Discord to trick users into engaging with malicious addresses or websites.
    • The ongoing meme coin frenzy as well as the potential for quick profits amidst market volatility further exacerbated the vulnerability of inexperienced and novice users to these scams.

    “Scammers capitalize on the excitement surrounding meme coins to lure investors, exploiting fear of missing out (FOMO) and the promise of lucrative returns.”

    Presale Token Scams. Source: Blockaid
    • Firstly, in February and March of this year, Blockaid’s threat intelligence team observed a significant surge in the uptake of pre-sale tokens, which quickly increased from a few tens to hundreds of purchases.
    • This surge was largely driven by the exponential growth of legitimate meme coins.
    • The team also claimed that Solana’s ecosystem may lack adequate security measures, essentially leaving it vulnerable to exploitation by scammers.
    • In fact, the security firm’s data indicates that even popular projects have been targeted by these groups, highlighting the continued threat posed by pre-sale scams within the cryptocurrency industry.
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  • Google Sues 2 Individuals for Alleged Crypto Investment Fraud Using its Play Store

    Google Sues 2 Individuals for Alleged Crypto Investment Fraud Using its Play Store

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    American tech giant Google recently filed a lawsuit against two developers for uploading almost 90 fraudulent crypto investment applications on its online store, Google Play, which they used to defraud unsuspecting victims.

    Despite the company’s previous attempts to take down fraudulent apps from its Play Store, the alleged scammers found a way to upload more of such bogus apps, with Google stating that their fraud scheme affected around 100,000 users.

    Victims Promised ‘Illusory’ Gains From Crypto Investment

    Google, in its complaint filed in the Southern District of New York, claimed that Yunfeng Sun and Hongnam Cheung, both Chinese online app developers, employed three primary methods to deceive investors into downloading their fake apps from Google Play.

    The defendants reportedly used wrong number messages to initiate a conversation with the targeted victim, thereafter forming a friendly or romantic relationship and convincing the victim to download a fraudulent investment app on Google Play.

    One such app was a purported crypto exchange called TionRT, which was uploaded to Google Play in July 2022. Sun and Cheung, along with others involved in the fraud scheme, promoted the app as legitimate.

    However, victims were later aware of the fraudulent cryptocurrency exchange when they were unable to make more withdrawals. The platform eventually closed down, and investors did not get their money.

    The alleged scammers also used online videos and affiliate marketing programs to convince investors that the crypto and investment apps on Google Play were genuine. They also allegedly made promises of high returns to the victims, with Google describing such financial gains as “illusionary.”

    As a way to string investors along, the defendants, as stated in Google’s complaint, would allow withdrawals in small amounts. However, further attempts to withdraw more funds were impossible.

    Sometimes, Sun and Cheung or their agents would require a fee between 10% and 30% or ask that investors maintain a minimum balance if they wanted to withdraw their funds. Despite victims’ compliance with the demands, they were still unable to make withdrawals.

    “Defendants and their agents designed the fraudulent apps that were made available on Google Play to appear legitimate. Their user interfaces sought to convince victims that they were maintaining balances on the app and that they were earning “returns” on their investments. But those statements were false. The apps were not actual trading platforms; they existed only to ingest users’ money, with which the fraudsters then abscond.”

    100,000 Google Users Affected

    Sun, Cheung, and other unnamed associates have been carrying out their fraud scheme since 2019, with about 87 apps uploaded on Google Play.

    While the tech company said that it removed some of these fraudulent apps, the defendants were able to upload new ones “using new aliases and infrastructure, making repeated material misrepresentations regarding their identity and activities to Google as part of attempts to deceive Google into allowing their new apps into Google Play.”

    According to Google, approximately 100,000 users download fake apps, 8,700 of whom are said to be based in the United States. The lawsuit noted that financial losses for Google users ranged “from one hundred to tens of thousands of thousands of dollars” per victim, based on complaints.

    Apart from its users, the tech company said it was also affected by the fraud scheme, stating that the defendants’ fraudulent actions affected users’ confidence in its services and platforms.

    The firm added that stating that it suffered financial damage of more than $75,000 used to investigate the breach of its platform and remedy the damage caused by the defendants.

    Google, in its filing, claims that Sun, Cheung, and associates committed wire fraud, breached various contracts, and violated the Racketeer Influenced and Corrupt Organizations (RICO) Act.

    As a result, the firm is seeking a permanent injunction on Sun, Cheung, and their associates, to prevent them from accessing Google services, creating or maintaining any Google accounts, or using the company’s products to promote any website, app, or product.

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  • South Korean Police Nabs 2 Fraudsters After Senior Citizen Loses $4.1M in Crypto Scam

    South Korean Police Nabs 2 Fraudsters After Senior Citizen Loses $4.1M in Crypto Scam

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    Crypto crimes are on the rise across the world, especially with the market-wide boom. Elderly individuals, for one, are one of the most targeted groups, preyed on by fraudsters who convince them through different means to exchange their funds for crypto while promising substantial investment gains.

    This has prompted authorities to intensify their crackdown. In the latest development, South Korean authorities have reportedly arrested two anonymous individuals in their 20s and 30s for orchestrating a similar scam that targeted a senior citizen.

    Two Fraudsters Arrested For Targeting Elderly

    The local report by the popular Korean daily, ‘Chosun,’ stated that the victim, who is in his 60s, lost nearly 5.5 billion South Korean won, which is valued at almost $4.1 million. The suspects, who were detained by the Haeundae Police Station in Busan, South Korea, reportedly lured the victim with promises of huge returns in investments of crypto assets from September to December 2022.

    The duo assured a monthly profit of 70% on investments totaling 1 billion won and even convinced the victim to transfer 5.5 billion won across six transactions. They provided fabricated balance certificates that showed nonexistent investments.

    Despite the victim’s financial contributions, none of the funds actually reached any legitimate crypto trading accounts, as per the Busan authorities. The victim, on the other hand, was also presented with counterfeit balance sheets and falsified real estate contracts to mask the deceit further.

    While law enforcement managed to swiftly nab the perpetrators, details regarding the recovery of the stolen funds are not known yet.

    Crypto Scams on Elderly

    Fraudsters often specifically prey on seniors for multiple reasons. Seniors are often more trusting and less technologically savvy, especially when it comes to digital assets. Furthermore, certain individuals in their 60s may also not have adequate retirement savings, thereby becoming susceptible to investment schemes similar to get-rich-quick ones in an attempt to make up for lost time.

    FBI’s 2022 Elder Fraud Report revealed a surge of over 300% in financial losses attributed to investment fraud. The figure eclipsed all other forms of fraudulent activities and is primarily attributed to scams involving crypto investments. The report further disclosed that losses related to crypto surged by 350% across various crime categories monitored by the agency.

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  • X (Formerly Twitter) Remains a Haven for Scammers as Phishing Incidents Claim $104M

    X (Formerly Twitter) Remains a Haven for Scammers as Phishing Incidents Claim $104M

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    X (formerly known as Twitter) has been a popular hook for scammers for over a decade now. However, the tactics employed in these schemes continuously evolve.

    What’s concerning is that many victims are still falling for scams because of misleading comments made by fake X accounts, leading them to phishing websites.

    X Fakes Fuel Phishing Frenzy

    According to Scam Sniffer’s February Phishing Report, a significant portion of the victims fell prey to such scams via X. Deceptive comments from impersonated X accounts were used as a means to lure unsuspecting individuals to phishing websites, where they subsequently became victims of such schemes.

    A staggering 57,000 individuals succumbed to crypto phishing scams, resulting in collective losses of around $47 million. Surprisingly, this marks a significant decrease of 75% in the number of victims, losing over $1 million compared to the previous month.

    Meanwhile, Ethereum mainnet accounts for the majority, comprising 78% of the total thefts, with ERC20 tokens being the primary assets targeted, making up 86% of the stolen funds. The thefts of ERC20 tokens were predominantly facilitated through phishing signatures like Permit, IncreaseAllowance, and Uniswap Permit2.

    Additionally, many Wallet Drainers have begun utilizing Safe or Account Abstraction wallets as token approval spenders, further exacerbating the phishing issue.

    The latest revelations from Scam Sniffer are consistent with SlowMist’s investigation, which uncovered widespread theft driven by phishing tweets. The security team reported numerous instances of theft, discovering that a significant portion of these incidents were facilitated by misleading comments under tweets from reputable projects.

    In fact, about 80% of comments under tweets from such projects were identified as phishing scam accounts.

    Malicious Crypto Ads on X

    Despite Elon Musk’s promises to curb bots on the platform, not much has changed since his controversial takeover and the subsequent updates. Several reports suggest that cybercriminals are increasingly exploiting X advertisements to promote websites that result in crypto drainers, fake airdrops, and other scams.

    In 2023, X’s revenue dropped by 22% compared to the previous year, reaching $3.4 billion. The decline is primarily attributed to a significant decrease in advertising income over the last two years. Despite efforts, revenue from subscriptions and data licensing hasn’t compensated for this loss.

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  • Blast Network’s Layer 2 Project Loses Over $1.2M in Suspected Rug Pull

    Blast Network’s Layer 2 Project Loses Over $1.2M in Suspected Rug Pull

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    The Blast network’s layer 2 project, RiskOnBlast, has been scrutinized due to suspicions of a potential rug pull scam surfacing.

    The incident has left investors reeling from significant losses estimated at around 420 Ether (ETH), equivalent to approximately $1.25 million at current market rates.

    Rug Pull Suspicions

    The incident began when community members noticed the abrupt disappearance of RiskOnBlast’s presence on social media platforms.

    Arkham Intelligence’s report shows that the RiskOnBlast balances were fully depleted due to fund withdrawals on February 25. Additionally, Etherscan has marked the 0x1E…C558 project’s address as a phishing scam, warning users to be cautious when engaging.

    A rug pull is a tactic employed in the cryptocurrency space where developers vanish with investors’ funds, causing a sharp decline in the value of the associated asset and leaving investors empty-handed.

    The abrupt deletion of RiskOnBlast’s Twitter account only deepened suspicions surrounding the project’s legitimacy, prompting widespread outcry from analysts and investors alike. MoonCat2878, one of the affected investors, expressed dismay over the losses incurred, going as far as pledging one ETH to blockchain analyst ZachXBT and offering $12,500 to aid in the recovery of lost investments.

    Blast Network Under Scrutiny

    MoonCat2878’s account of their experience shed light on the initial optimism surrounding RiskOnBlast, which quickly soured as concerns arose regarding changes in the project’s public sale structure. Despite attempts to seek clarification from the RiskOnBlast team, investors were met with delayed and unsatisfactory responses, further deepening doubts about the project’s integrity.

    Blokzi.eth, another Blast network user, lamented the breach of trust, emphasizing the platform’s endorsement of RiskOnBlast as a contributing factor to their financial losses.

    The fallout from the alleged rug pull has prompted a broader questioning of Blast’s security measures, with industry figures like Coinbase’s Andrew Choi engaging in discussions to ascertain how such a significant lapse could occur within the blockchain network.

    The Blast network was initially hailed for its promising layer 2 solution designed to enhance transaction speeds and reduce costs on the Ethereum network. However, it now faces scrutiny over its handling of the RiskOnBlast incident. Despite getting support from notable entities like Paradigm, the network’s reputation has been affected by the suspected rug pull, raising concerns about the platform’s ability to uphold investor trust and safeguard against fraudulent activities.

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  • South Korean Crypto Exchanges Report Nearly 50% Surge in Suspicious Transactions in 2023

    South Korean Crypto Exchanges Report Nearly 50% Surge in Suspicious Transactions in 2023

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    South Korea has witnessed a surge in crypto trading, particularly following a market recovery. Correspondingly, authorities in the country received almost 49% more alerts of potentially suspicious transactions from crypto service providers in 2023 compared to the previous year.

    A paper from the Financial Intelligence Unit (FIU) revealed that South Korea logged 16,076 instances of reported crypto transactions suspected of links to activities like money laundering, market manipulation, or illicit drug trading in 2023.

    Suspicious Crypto Transactions Soar in South Korea

    In a recent press release, the FIU attributed this rise to improved communication with domestic companies, urging them to report such activities.

    It also mentioned that the volume of reports linked to suspected crypto-related crimes surged by around 90% in 2023 compared to the previous year.

    However, the agency refrained from providing specific information about these alerts, citing the Specified Financial Information Act. It also didn’t clarify whether these alerts also originated from crypto exchanges, similar to the suspicious transaction reports.

    So far, the National Tax Service and the National Police Agency have received 100 instances of unregistered crypto loan enterprises.

    These cases were flagged using suspicious transaction data collected by the FIU between December 2023 and January 2024.

    Going forward, the FIU intends to implement a new system designed to promptly halt suspicious virtual asset transactions prior to investigation by local prosecutors. The primary aim of this system is to conduct preliminary testing for its implementation by March of this year.

    Increased Scrutiny

    The release of the report aligned with South Korea’s increased regulatory oversight of the space, triggered by several notable incidents of failure in 2023.

    As part of an effort to enhance transparency and accountability within the public sector, senior public officials in the country are now required to disclose their digital asset holdings, as per new legislation announced by the Ministry of Personnel Management.

    More recently, the Korea Customs Office disclosed that approximately 88% of illicit foreign exchange dealings involved digital assets, some using crypto to evade taxes. In response, the customs authority has established a specialized team aimed at combating cryptocurrency-related crimes.

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  • Here’s How Scammers Have Improved Their Tactics in Address Poisoning Attacks

    Here’s How Scammers Have Improved Their Tactics in Address Poisoning Attacks

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    Scammers have taken their tactics to the next level and are now using real funds in address poisoning attacks.

    A recent incident where a victim lost nearly $50k was brought to light through a post on X by Cyvers Alerts, a platform dedicated to raising awareness about online threats.

    Crypto Users Targeted with Real ETH

    An initial post warned of the new phishing scam targeting crypto users, stating, “Beware of a new phishing scam targeting #crypto users! Scammers are now sending real $ETH to trick you.”

    It was further emphasized that these bad actors rely on users mistakenly copying a scam address, a tactic similar to address poisoning. These fraudsters may also send counterfeit Tether (USDT) tokens, tricking users into sending funds to the wrong address and falling prey to their scam.

    In a follow-up post, Cyvers Alerts pointed to an incident of such a scam. The victim fell prey after receiving a negligible amount of Ethereum in what appeared to be a test transaction.

    Unknown to them, the scammer had placed their fake address in the victim’s transaction history. Subsequently, the victim copied the scammer’s address and sent 17 ETH worth $47.6K, resulting in a significant financial loss.

    User Loses 1 Million USDT

    Another X user named Catakor has highlighted a recent similar incident that saw a user lose a million USDT. Through a thread, they narrated how the user received a million from their Kraken account and conducted a “test deposit” to confirm the funds went to the correct account.

    However, a scammer had created a fake transfer of USDT from the user’s wallet to an address closely resembling the one associated with the Kraken account. The user then unknowingly copied the last “sent” transaction, resulting in them losing up to a million USDT. The scammer then quickly converted the stolen USDT to ETH and transferred them to another wallet, where they are now stored.

    Address poisoning is a scam that targets the common practice of copying and pasting wallet addresses in cryptocurrency transactions. The scammer uses a ‘vanity’ address generator to create one closely resembling the victim’s and sends a transaction of negligible value from this fake account. If the victim accidentally pastes the scammer’s address, they end up sending funds to the scammer instead of the intended recipient.

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  • ‘Crypto King’ Partner Sentenced to 5 Months in Prison for Contempt of Court

    ‘Crypto King’ Partner Sentenced to 5 Months in Prison for Contempt of Court

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    Colin Murphy – an associate of Canada’s notorious “Crypto King” Aiden Pleterski – was sentenced to 5 months in prison on Friday for contempt of court in Oshawa, Ontario, Canada.

    Ontario Superior Court Justice Hugh O’Connell found Murphy in contempt for refusing to surrender his iPhone and for deleting its data when a search warrant was executed against him last year.

    Crypto King Aid Headed to Prison

    “He’s put himself behind bars, I haven’t done it,” said O’Connell when delivering the sentence, according to CBC. “Although I’m forcing it, his actions have to require a large wake-up call.”

    In February 2023, the 27-year-old was sued by an investor trying to recover $120,000 he had given to Murphy, who was supposed to invest that money into Pleterski’s crypto trading business.

    When the client later messaged Murphy to cash in his investments, the former went quiet, according to WhatsApp messages included in a court affidavit. The documents stated that the client’s invested money was his life savings.

    In November, Judge O’Connell issued a default judgment against Murphy for fraud and breach of fiduciary duty around separate charges of a similar nature to Groot’s client. He was ordered to liquidate $120,000 of his assets, including a 2017 Porsche 9TS, a 2020 Ford F250, and several firearms.

    Lavish Living

    Murphy told the investor last year that he didn’t have any funds to pay him back, though these claims were refuted by Pleterski in messages within the affidavit.

    “Colin took money in from so many individuals that I never ended up seeing,” claimed Pleterski. “Colin has over 2M in assets he can liquidate, but he isn’t.”

    Much like Pleterski himself, Murphy was known for displaying a lavish lifestyle on social media, showing off sports cars and the like.

    Though an auction to sell Murphy’s vehicles is scheduled for later this month, he has yet to hand over his guns. The judge cited this failure as an aggravating factor in Murphy’s sentence.

    Norman Groot, the lawyer representing the investor, initially sought a 12-month jail sentence for Murphy in court submissions last fall.

    Pleterski, the main culprit in the Canadian fraud saga, owes over 160 investors $40 million after he failed to repay them money he was expected to use for crypto investing.

    In practice, the bankruptcy investigation found that less than 2% of the money was invested, and over $16 million was spent on his own private jets, vacations, and luxury cars. Only $3 million has been recovered so far.

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  • Deepfake Alert: Fraudulent Crypto Platform Promoted in Doctored Clip of Andrew Forrest on Facebook

    Deepfake Alert: Fraudulent Crypto Platform Promoted in Doctored Clip of Andrew Forrest on Facebook

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    A doctored clip of Australian mining magnate and businessman Andrew “Twiggy” Forrest on Facebook represents the newest addition to a series of deepfakes hijacking images of figures in deceptive advertisements, eroding trust in the media.

    Cybersecurity firm Cybertrace flagged the video Forrest, which appears to be promoting a fake crypto trading platform.

    Deepfake Deception

    The footage surfaced on Facebook, encouraging viewers to enroll in a fraudulent platform claiming to generate thousands of dollars daily for “regular individuals.” Targets are directed to a site named “Quantum AI,” which, according to Cybertrace, has gained notoriety as a hub for scams and financial deceit.

    The video altered Forrest’s actions and mannerisms from a “fireside chat” hosted by the Rhodes Trust in October 2023. Cybertrace identified the deepfake on Facebook on January 27th, where an AI-modified rendition of the billionaire is depicted endorsing a fraudulent crypto trading platform.

    Facebook and Instagram’s parent company ‘Meta’ implemented a prohibition on deepfakes in early 2020, however, doctored clips continue to wreak havoc targetting unassuming users on the social media platforms. However, Forrest slammed the social media giant for not doing enough to prevent scams.

    The billionaire has criminal charges pending against Facebook for another crypto advertising scam that allegedly exploited his image. Expressing his frustration, Forrest stated,

    “Facebook does nothing – that’s what I hope the legal actions I started will address, to make social media companies liable for the negligent way they run their ad platforms. I commenced legal proceedings almost two years ago out of concern for the innocent Australians being scammed on Facebook.”

    Deepfake Scammers on Rise

    MicroStrategy founder Michael Saylor recently disclosed that his team is working to remove around 80 counterfeit videos every day, many of which are designed to endorse different Bitcoin scams. Additionally, modified videos featuring well-known figures like billionaire Elon Musk, the founder of Tesla and SpaceX, have also emerged on various social media.

    Some of these videos contain links to investment schemes, unauthorized products, or unrelated e-commerce sites that vanish after a few days.

    Artificial intelligence (AI) generated deepfake videos are slowly emerging as one of the top security threats across the world. Data from Sumsub indicated that the proportion of deepfakes in North America saw a significant increase from 2022 to Q1 2023.

    In the United States, the proportion surged from 0.2% to 2.6%, while in Canada, it rose from 0.1% to 4.6%. Concurrently, instances of printed forgeries, accounting for 4% – 5% of all fraud in 2022, plummeted to 0% in the last quarter.

    “Anti-fraud and verification providers who do not constantly work to update deepfake detection technologies are lagging behind, putting both businesses and users at risk. Upgrading deepfake detection technology is an essential part of modern effective verification and anti-fraud systems.”

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