Karl Sebastian Greenwood, the co-founder of the fraudulent cryptocurrency OneCoin scam, has pleaded guilty to charges brought by the United States Department of Justice (DoJ).

[He faces a maximum of 60 years in prison](https://cointelegraph.com/news/4b-onecoin-scam-co-founder-pleads-guilty-faces-60-years-jail) if convicted of all charges. The DoJ said on 16 December that Greenwood had entered a guilty plea in a federal court in Manhattan to charges of money laundering conspiracy, money laundering conspiracy, and wire fraud conspiracy. Each charge carries a maximum potential sentence of 20 years in prison.

With the OneCoin scam, Greenwood is alleged to have operated "one of the greatest worldwide fraud schemes ever committed", according to US Attorney Damian Williams. 

## OneCoin Scam Promoted as a 'Bitcoin Killer'

Williams further asserts that Greenwood promoted the OneCoin sam as a "Bitcoin killer" despite the tokens being "totally worthless". Greenwood and "Cryptoqueen" Ruja Ignatova were the founders of OneCoin. It was a Bulgarian company that sold a cryptocurrency with the same name, and Greenwood was the CEO of the OneCoin scam.

According to emails that the DoJ collected between the two parties before the company's establishment in 2014, the individuals referred to it as a "trashy currency". Outwardly, it appeared to be a multi-level marketing company, with members earning commissions for allegedly selling cryptocurrency bundles containing OneCoin and the capacity to mine more cryptocurrency. This was the company's stated intention.

OneCoin could only be converted into fiat currency through the Xcoinx exchange, a private platform. It was a [combination of a pyramid and a Ponzi scheme](/news/article/bitcoin-motion-trading-bot-scam) since investors could bring in new members without a tangible product on offer. Later investors were compensated with the money from the initial investors. 

According to the DoJ, Greenwood's position as the "global master distributor" of the fake cryptocurrency enterprise resulted in him collecting around $21.2 million (€20 million) monthly. On 5 April, 2023, Greenwood is scheduled to appear in front of District Judge Edgardo Ramos to receive his punishment.


red onecoin store boarded up with karl sebastian greenwood in foreground

OneCoin Scam Co-Founder Admits Fraud

Crypto is a bewildering world. New tokens and projects emerge daily, which makes [spotting the right ones](/news/article/congress-crypto-protection) more difficult. Besides, with new projects, new [crypto scams](/news/article/crypto-hacks-peaking-october) and rug pull incidents are also emerging. This further adds to the difficulties of the investors.

In the notorious rug pull scam, fraudsters portray the project to have a high potential and then vanish after taking investors’ funds. Disguising as a lucrative DeFi or DEX is the most common strategy for this scam. 

Here we have discussed rug pulling with some tips on detecting one to avoid it.

## What does ‘pull the rug’ mean?

The phrase 'pull the rug' literally means to draw out the floor under someone's feet so they fall. But, figuratively, it means leaving someone defenceless by deception.

In finance, it is a common terminology that refers to a company's stocks that promise a lot to gain investment. Then the company shuts down, selling its shares at a high price, leaving investors with valueless shares. 

## Rug pulling in crypto

The same goes for the crypto world too. Here, tricksters use [DeFi projects](/news/article/globex-crypto-scam) to target investors in an organised way. They propose a strong roadmap, alluring investors and pumping up the price of their tokens. Once the token’s price starts gaining momentum, they dump the project, taking all the funds.

Based on its nature, a rug pull can be of three types:

1.	Stealing liquidity.

2.	Limitations on sell orders.

3.	Pumping and dumping.

## Five ways to detect rug pulling schemes

Here's how you can detect one to protect yourself.

1.	Background of project developers
The background of the founding members of a project can reveal a lot about it. That’s why you must check the track record of developers and founding members in the crypto industry. 

The anonymity of the developers often turns out to be a strategy to hide their illegal doings. A similar kind of scam happened with [Wonderland TIME](https://wonderland.money/), where the CFO was a [convicted felon](/news/article/wonderland-time-crypto) who allegedly exited with a rug pull. 

2.	Sell order limits
Another red flag indicating the potential rug pull attempt is the limitation on sales. The scammers write a code that restricts the token holders from selling it. This can be one of the most prominent signs of a scam. That’s why you must diligently review the code before investing.  

3.	Total locked liquidity
Locked liquidity endorses the project’s security. However, when the founders intend to rob the investors, they often do not lock liquidity in smart contracts. It allows them to swindle out all the liquidity from a DeFi. 

Also, checking the project's total value locked (TVL) is advisable. Ideally, the TVL should at least be 80%.

4.	Pumping and shilling
Fake hype for any financial product is one of the easiest ways scammers trick investors. Through paid campaigns on social media, the founding team of a blockchain creates buzz around a cryptocurrency. Though it’s not illegal to advertise a coin, propagating false news about it is unethical. 

After gaining popularity, the criminals dump these projects, leaving investors clueless. That’s why you should avoid investing in shiny-looking tokens. 

5.	No third-party code audits
Third-party code audits are another way of gauging the authenticity of a cryptocurrency. Since developers can easily exploit the code, validation from an external source becomes necessary. Also, an audit from a trusted firm like [Hacken](https://hacken.io/) or [Certick](https://www.certik.com/) is a mandatory procedure to assure the audience about their funds’ security.

However, fraudulent cryptocurrencies often evade third-party audits. Therefore, it is one of the ways to detect a shady token. 

## Bottom line

Rug pull is a prevalent [scamming strategy](/news/article/bitcoin-doubler-scam) in the crypto world. In this, the criminals strategically create false hype for a cryptocurrency to lure investors. They pump its price by generating fake positive news. As its price goes suspiciously high, they pull the rug on investors by taking all the liquidity and shutting the project.

Therefore, it is advisable to know the indicators that allow you to detect rug-pulling ventures. For this, the founders’ background, locked liquidity, advertisement campaigns, and code — require careful research.


Rug Pull: What Is It?

The [US Feds](/news/article/us-fed-crypto-rates-hike) announced Monday that it had [seized approximately $3.36 billion worth of Bitcoin stolen](https://www.nbcnews.com/now/video/feds-announce-seizure-of-3-36-billion-in-stolen-bitcoin-152877125774) during an unannounced 2021 raid on James Zhong's home.

Zhong pled guilty on Friday to one count of wire fraud, with a maximum prison sentence of 20 years.

According to the Feds, on November 9, 2021, US authorities seized approximately 50,676 Bitcoin, valued at more than $3.36 billion, from Zhong during a search of his house in Gainesville, Georgia. It is the Feds' second-largest financial seizure to date, following its February announcement of $3.6 billion in allegedly stolen [cryptocurrency](/news/article/impact-of-cryptocurrency-on-society) linked to the 2016 hack of the [crypto](/news/article/crypto-hacks-peak-hacktober) exchange Bitfinex.

The raid was part of an investigation led by the United States Attorney's Office in Manhattan into the whereabouts of thousands of missing coins linked to Silk Road founder Ross Ulbricht. 

[Bitcoin](/news/article/bitcoin-prime-review) was trading more than $60,000 at the time of seizure, boosting the worth of the loot for investigators by billions of dollars. The digital currency is currently worth around $21,000. As per current data, the seizure is worth just 1 billion dollars. 

## How much Bitcoin, other crypto and cash was stolen? 

Zhong began his criminal behaviour in 2012 when he defrauded Silk Road, a website known for trading drugs and cryptocurrencies, out of more than 53,000 Bitcoin. According to court documents, he set up a series of Silk Road accounts to mask his identity. He carried out 140 transactions quickly to trick the platform into releasing Bitcoin into those accounts. Zhong then transferred the [digital currency](/news/article/cbdc-uk) into other accounts under his control.

Prosecutors claim that 50,000 Bitcoin were found in an underground safe and a single-board computer in a popcorn tin beneath a pile of blankets in Zhong's bathroom cabinet. He has since surrendered over 1,000 more coins and agreed to assist prosecutors in accessing the remaining coins and providing technical assistance.

Zhong agreed to sign over his 80% business ownership to the government as part of his plea deal for the Silk Road fraud. According to the forfeiture order, prosecutors also seized 25 Casascius coins worth 174 Bitcoin and $661,900 in cash. On Friday, Zhong was set free after posting a $310,000 bond.





Feds seize $3.36B Bitcoin stolen in crypto scam

According to the most recent statistics, October has broken all records for crypto exploits and the number of digital assets stolen, living up to its new name of "Hacktober."

PeckShield, a blockchain security company, [tweeted](https://twitter.com/PeckShieldAlert/status/1587112410082512897) some alarming data on October 31. The company stated that $2.98 billion in digital assets had been stolen, almost twice the $1.55 billion lost in 2021.

According to the report, October 2022 saw 44 exploits affecting 53 protocols. In just one-month, malicious actors stole $760M. However, $100M was refunded. 

March has been the second-highest month for hacked funds after October, with $710M stolen. Most of this came from the Ronin bridge exploit, which resulted in the theft of $625M in crypto assets.

According to PeckShield, the top October exploit was the [BNB Chain](/news/article/bnb-chain-security-system), which lost $586M. The second major exploit of the month was the Mango Markets DeFi protocol, despite an agreement with the exploiter to return some funds and [fix the crypto hack](/news/article/bankman-fried-crypto-hack-fix).

## DeFiYield's Rekt crypto hack data

According to [DeFiYield's Rekt Database](https://defiyield.app/rekt-database), there were several other notable exploits in October. These include the $60 million rug pull of the [Freeway crypto](/news/article/freeway-crypto-halts) yield platform, [Transit Swap](/news/article/crypto-hacker-transit-swap), which lost $29 million, Team Finance, which lost $13 million; and Moola Market, which lost $9 million.
 
On November 1, DeFiYield published its [report](https://blog.defiyield.app/report-over-1b-lost-in-october-in-crypto-scams-d27d03c15efd) outlining the dire circumstances surrounding the hackfest that took place the previous month.
 
The report states that over $1 billion was lost to crypto scams, including rug pulls, Ponzi schemes, and direct protocol exploits. DeFiYield reported 35 incidents, 15 of which were rug pulls.
 
On a more upbeat note, the report noted that in 2022, nearly $890 million in cryptocurrency funds had been recovered.

Chainalysis declared Hacktober "the biggest month" for crypto hacks.

Chainalysis, a leading blockchain analytics firm, has previously declared [October "the biggest month" for cryptocurrency hacks](/news/article/crypto-hacks-peaking-october). According to the data released by the firm, the total value hacked reached $718 million by the middle of the month.
 
 
 



Crypto hacks peak in "Hacktober"

[BitMiner](https://bitminer.io/) is claimed to be a Bitcoin mining pool that provides its services for free. It claims to have mined more than 3,109 Bitcoins since its initial launch, which is quite an impressive feat in [Bitcoin mining](/news/article/free-bitcoin-mining). The platform claims itself as the "ultimate mining pool". In addition to the free version, it offers four different premium memberships.

The platform is listed under [“not recommended websites” by newsonlineincome.com](https://newsonlineincome.com/what-is-bitminer-is-bitminer-a-scam-noi/). This free [Bitcoin mining pool](/news/article/norway-bitcoin-mining) is the sister site of StartMiner, which itself is considered as a Ponzi scheme.

## Popularity

The affiliated websites that advertise the platform cause the site's popularity. 

Affiliate websites like [startminer.com](https://www.startminer.com/) and btcprominer.life run by the same business, BitMiner Cloud Eu LTD, bring in about 12.5% of visitor traffic. The majority of the other traffic comes from shady YouTube channels or false reviews with affiliate links that can be found on Google.

## Red flags

BitMiner generates a plethora of warning signs. The company's inability to pay its financial obligations and the fact that the site was created by the same scammer who developed StartMiner are obvious red flags. 

Enter "BitMiner reviews" into any search engine to find more alarming warning signs. You'll find many forum posts and articles alleging that investors haven't been able to withdraw their money.

## Conclusion

As per my research, BitMiner is probably considered a [scam](/news/article/bitcoin-doubler-scam). The website refuses to process withdrawal requests while the company behind the website is in financial distress. According to research, when the platform was first launched, it served as a legitimate [mining](/news/article/best-crypto-miner) pool operation. Several complaints were reported within a few months, mainly about the lack of withdrawals.

Withdrawal requests were initially dispersed when the site was first developed due to a steady stream of new depositors. However, as the stream of new depositors slowed, so did withdrawal request acceptance. So, it can be said, Bitminer is likely to be a ponzi scheme.




BitMiner: A Ponzi Scheme?

Ruja Ignatova, aka Cryptoqueen, the founder of OneCoin, has been on the run since 2017. She is allegedly involved in a multibillion-dollar [Ponzi scheme](/news/article/crypto-hacks-peaking-october).

Now, three of her associates have been presented to the German court. The charges against them include money laundering, fraud, and embezzlement.

On 18 October, a lawyer from Munich and a couple who allegedly worked for Cryptoqueen appeared in court. [Reportedly](https://www.bloomberg.com/news/articles/2022-10-18/onecoin-s-cryptoqueen-associates-face-german-fraud-trial#xj4y7vzkg), the lawyer helped Ignatova in purchasing two apartments in London. For this, it is claimed, he transferred $19.7 million (€20 million) from the Cayman Islands.

The couple was allegedly involved in payment handling for [OneCoin](https://www.investopedia.com/terms/o/onecoin.asp). Within a year, they are said to have dealt with $315.4 million (€320 million).

## Charges of $4 billion against Cryptoqueen’s OneCoin

Ruja Ignatova founded the OneCoin platform in 2014. She falsely claimed that it is a cryptocurrency and trade platform. However, after the US’s Federal Bureau of Investigation ([FBI](https://www.fbi.gov/)) investigated, it turned out to be a multi-level marketing [Ponzi scheme](/news/tag/scam). 

The platform allured investors through false claims. It claimed to run a token mining program, but in truth, there was not any. As per the investigation by the FBI, Cryptoqueen's company scammed more than three million investors. The total amount fraudulently obtained is roughly $4 billion.

Ruja Ignatova disappeared in 2017. Reportedly, she was last seen in Athens, Greece. The FBI also added her to the top ten most wanted criminals list. The bureau also announced a $100,000 reward for anyone who could share information about her whereabouts.

The OneCoin company also allegedly bribed the presidents of Bulgaria and Serbia. An economist, Angelina Lazar, claimed this in an [interview](https://cointelegraph.com/news/angelina-lazar-presidents-of-serbia-bulgaria-took-bribes-from-onecoin-my-war-against-onecoin-part-2). 

Previously, some other actors who were part of the company also faced charges. Christopher Hamilton was one of them. He faced [money laundering](/news/article/crypto-aml) charges involving around $105 million in embezzlement. 

Ruja’s brother, Konstantin Ignatov, was also accused of money laundering and pleaded guilty in 2019.



cryptoqueen ruja ignatova and crypto fraud

Cryptoqueen Associates Face Fraud Trial

Token hash values are random strings generated every time a password is saved on your computer, smartphone, or anywhere on the internet. [Token](/news/article/crypto-coin-vs-token) hash values are usually encrypted, but sometimes they can be easily decoded, and all the sensitive information is sent to any hacker who cares to listen. With token sniffing, all you need to hack into accounts is a sniffer, a database of stolen tokens, and a [database of leaked passwords](/news/article/celsius-data-breach), along with their corresponding token hashes.

## Dangers of Public WiFi

A token sniffer steals user data by monitoring and collecting the encrypted data that passes between your computer and a network. This information can include usernames, passwords, and other sensitive information.

This attack can happen when surfing the web on public WiFi networks, like at your local coffee shop or airport lounge. Hackers can use special tools to monitor the traffic passing through their device's WiFi card and steal any data transmitted over the network.

The dangers of public WiFi include the fact that anyone can use it within range to access your data. [A VPN will also protect your](/news/article/reddit-using-vpn-for-crypto) login details from hackers while on public networks such as airports or coffee shops where lots of people gather together in one place.

## How Can You Safeguard Your Information?

Token sniffer attacks are a common way to compromise an organization's network. In addition to collecting information about a user's account, this attack allows someone to access their network connection and remotely log into their system as if they were using it themselves.

There are ways for you to safeguard your information from token sniffers.

First, you should ensure that you're using [two-factor authentication](https://www.investopedia.com/terms/t/twofactor-authentication-2fa.asp) whenever possible. You'll need more than just your password when you log into a site. You'll also need a code sent to your phone or email address to verify that it's you trying to get into the account.

Second, if you don't already have a strong password for each account, consider creating one now. A strong password comprises letters and numbers (no symbols), and it should be at least 12 characters long - more if possible!

Third, don't use public computers or public WiFi networks when signing into sensitive sites like banking accounts or social media platforms because these connections can leave your information vulnerable to sniffing attacks.
 


Token Sniffer Threats and You

[Sam Bankman-Fried](/news/tag/sbf), the cryptocurrency billionaire, has [proposed a framework for reducing the damage caused by the hacks and vulnerabilities](https://www.msn.com/en-us/money/other/billionaire-bankman-fried-tries-to-fix-crypto-s-hacking-problem/ar-AA13axks) affecting the sector. It includes setting the highest reward for attackers at $5 million.

Recently, crypto attacks have increased, with more than $3 billion looted from the crypto sector so far in 2022. This year is anticipated to set a hacking record.

The involvement of the FTX crypto exchange founder and CEO comes days after a hacker was allowed to keep $50 million of the approximately $100 million taken from the Mango decentralised finance programme. This was as part of a settlement with the platform following the heist.

In crypto, some white-hat hackers aim to reveal flaws in exchange for a reward rather than for nefarious purposes.
A white-hat hacker is a person who uses hacking techniques to find security flaws in the blockchain ledger in exchange for rewards. However, sometimes these rewards could be too costly to be justifiable.

As seen in the above case, the hacker was given 50% of the total value, accounting for $50 million of the $100 million funds. Such numbers must be addressed. They cause outrage and are unsustainable for the company and the community. For that reason, people like Bankman-Fried are seeking solutions to crypto hacking.

[Bankman-Fried](/news/article/ftx-acquires-bithumb) claims that implementing his [5-5 strategy](https://www.ftxpolicy.com/posts/possible-digital-asset-industry-standards) can reduce hacker effect by more than 98%, but he is still unsure about what should be the industry norm.

## Is DeFi an easy target?

DeFi protocols provide software-based algorithms that let cryptocurrency traders, borrowers, and lenders transact, borrow, and lend on digital ledgers without needing a central mediator. According to blockchain expert Chainalysis Inc. data, DeFi has been the primary target of most flaws and breaches this year. DeFi is hailed as crucial for the widespread adoption of digital tokens, which also suffered from this year's plunge in coin prices. 

The recent attacks are placing pressure on crypto players to find answers.



Bankman-Fried Floats Crypto Hack Fix

[Chainalysis](https://www.chainalysis.com/), a leading name in blockchain analytics, has declared October as 'the biggest month' for crypto hacks. Although we have yet to reach the month's midpoint, the firm has predicted that hacking activities will be peaking this month. The total value hacked in October 2022 has already reached [$718 million](https://twitter.com/chainalysis/status/1580312145451180032). 

Besides, 2022 will also be the biggest year so far for crypto [hacks](/news/article/binance-hack), according to Chainalysis. Previously, 2021 saw the highest rate of [cyber-attacking activities](/news/article/crypto-youtube-pennywise) on blockchains. However, at the rate these incidents are happening currently, they will likely surpass the total number of hacked amounts in 2021. 

## Crypto hacks in October, so far

The month has already seen some major hacking incidents. In total, there have been 11 instances where cryptocurrencies have been exploited. Meanwhile, on October 11 alone, there were four cyberattacks on blockchains and DeFi platforms. 

These incidents have drained more than $122 million worth of cryptocurrencies. The platforms affected by these cyberattacks include [Rabby Wallet](https://rabby.io/), Ethereum bridge of [QANplatform](https://www.qanplatform.com/), [TempleDAO](https://templedao.link/), and Solana Mango Markets. 

## 2022 is to be a record year for crypto hackers

This year is also going to be a record 12 months for hackers. Last year, cybercriminals exploited around $3 billion. The ongoing year has already seen over 125 blockchain hacking incidents. As per Chainalysis, the last 12-month amount will likely be surpassed if this trend persists.
 
Though the market is going through a [severe downturn](/news/article/bitcoin-price-crash-celsius), cybercriminals continually make more hacking attempts. Meanwhile, there has been a shift in projects they are targeting in the market. 

Previously, centralised exchanges were the main target of hackers. However, later they started focussing more on the DeFi protocols. This year, 90% of the hacking incidents were also on the DeFi protocols. On the other hand, these incidents are affecting the investors' confidence in DeFi projects. 

Besides, multichain bridging has also gained the attention of blockchain cyber attackers. In October, three cross-chain bridges were breached, making up around 82% of the amount exhausted this month.
 
 
 
 
 
 



Crypto Hacks Peaking in October - Chainalysis

Globex is a crypto exchange that also introduces its cryptocurrency, [GEX](https://crypto.com/price/globex). This broker allows you to make trades with cryptocurrencies. Though the GEX token's value is not quite impressive, the project has gained popularity among investors. However, there are concerns about a Globex crypto scam.

However, many users have also raised concerns that the exchange is running a scam. Besides, its website (globexcrypto.com) is not currently accessible. Moreover, other resources like its whitepaper and Medium account are also unavailable.     

This article considers some of the major questionable indicators and uncover the Globex crypto scam.

## What is Globex crypto?

It is a cryptocurrency exchange that deals with only digital asset trading. However, some sources suggest that it may include fiat currencies in its offerings in the future. The exchange also introduced its native token, GEX, through an initial coin offering. At the time of writing, the token's worth is $0.00001365, and its market cap is $512,933.

[CoinMarketCap](https://coinmarketcap.com/currencies/globex/) suggests that the GEX reached its highest value of $0.00008286 two years ago, in August 2020. Since then, its price has been down by more than 83%. Currently, it is not listed on many exchanges; only [Mercatox](https://mercatox.com/) offers the trading pair of GEX/ETH. 

## Globex crypto scam: The indicators

Various indicators suggest that Globex crypto could be a [scam](/news/tag/scam). Let's take a look at them.

1.	One of the primary reasons is its website's inaccessibility. Since the project does not give any verifiable information, it concerns the users.

2.	It is unavailable on most of the top-ranked and trusted exchanges. 

3.	The exchange is not licensed by any country’s financial regulatory body.

4.	There is no whitepaper or other documentation available for the users.

5.	There is a lack of information about the founding members of this project.

6.	Most scam-detecting sites give it a low trust rating.

7.	The platform is not present on any social platform, so there is no way users can get updates about it. 

There are many red flags that validate the view of GEX being a scam.     

## Is Globex crypto a scam? 

It is not possible to rule out it being a scam when so many indicators exist. The platform has almost no online presence currently. Therefore, it seems like a serious rug-pull scheme, where scammers disappear after getting their clients' funds.  

Moreover, user reviews also hint toward its deceptive scheme. Reviews on Trustpilot point out that the platform claims to give free [Ethereum](/coins/eth). Yet, later it asks about depositing an initial amount. Also, some reviews say that scammers contact you and offer free Ethereum. But, it is only to get information about you, and later they might use it against you. 

Besides, no regulatory authority like the [FCA](/news/tag/fca), [SEC](/news/tag/sec), or others has registered this platform. Plus, the token is not listed on any of the trusted exchanges.    

## Final thoughts

Cryptocurrency scams vary and Globex seems to be one of them. After gaining popularity, the platform has disappeared from the internet, which seems to be a potential rug pull. 

That’s why it’s advisable to avoid dubious projects like these. Therefore, always ensure to carry out comprehensive research and read the reviews online before investment to reduce the chances of falling prey to such


The Globex Crypto Scam Uncovered

The "temporary" suspension is due to "irregular behaviour" and a "possible exploit," according to BNB Chain on [Twitter](https://twitter.com/BNBCHAIN/status/1578148078636650496). The team stated that all systems are now isolated, and they are examining the possible vulnerability promptly. It also asserted that all monies are secure. They had also halted all BNB deposits and withdrawals on the exchange due to "maintenance" on the Chain. 

However, Twitter user and DeFi creator "foobar" had a [different take](https://twitter.com/0xfoobar/status/1578140914283065344) on the matter. He said an attacker took 2 million BNB from "someone" on the network, which is worth around $600 million.

## Evidence of Binance hack

Foobar continued by saying that the attacker is dumping money into liquidity pools and using any bridge to go to safer chains. A snapshot from a block explorer showed the suspect had $532 million in crypto scattered over several EVM-compatible chains and L2s, according to the user. These include $421,000,000 on the BNB (79%) and another $53 million on Ethereum (10%).

The address's total assets are $421 million, matching the foobar snapshot. Which is supported by BNB data, which shows precisely 1,020,094 BNB parked at the same spot, valued at $288 million. 

According to the explorer, the address was previously detected as part of the "BSC bridge attack," as [revealed](https://twitter.com/AnciliaInc/status/1578155138857914368) by the Web 3 cybersecurity organisation Ancilia. Tether, the creator of the world's largest stablecoin, has already [blocked](https://twitter.com/0xfoobar/status/1578144109206073344) the account.

## Can funds be recovered from the Binance hack? 

[BNB](/news/article/bnb-chain-security-system) had recently [verified](https://twitter.com/BNBCHAIN/status/1578163230790520832) that about $70 to $80 million in assets vanished from the platform before being suspended. Another $7 million of the escaped monies became blocked due to "the community" and [Binance's](/news/article/binance-bridge) "internal and external security partners." 

The business also acknowledged several organisations for their assistance, including CertiK, Ankr, and Coinbase Cloud.



$600mil Binance hack leads to BSC pause

The use of cryptocurrency trading bots has proliferated widely by experienced and novice crypto traders. Like a trading bot on a traditional financial market, crypto trading bots are used to execute potentially profitable trades automatically.

As these platforms are so common in the cryptocurrency industry, many cryptocurrency trading bot scams exist. However, numerous websites have verified that the one we are discussing today: The Bitcoin Motion trading bot, is a scam you must avoid at all costs. 

The scam works by luring people with promises of easy returns on Bitcoin for a simple fee of $250. They claim that investors have a dedicated account manager on call that they can reach and can withdraw at any time. This was proven to be fake. Luckily, helpful websites exist created by teams of people who care about informing the general public about crypto trading bot scams. 

One way to find out about scam crypto trading bots like Bitcoin Motion is [Scam Crypto Robots](https://scamcryptorobots.com/bitcoin-motion-review-scam/). According to this website, Bitcoin Motion trading bot users reported being unable to withdraw their money from a broker entitled “Coin Central Invest”, a registered business in Sophia, Bulgaria. Shady doesn’t even begin to describe it. 

This Bitcoin Motion scam has even gone so far as to use the names of celebrities like Elon Musk and create fake videos of him “endorsing” it. 

According to the Scam Crypto Bots site, all five of the Bitcoin Motion websites it found were discovered to be fake scams. 

However, after all this, it begs the question…

## Do real crypto trading bots exist? 

There are multiple ways to recognize a fake or scam crypto trading bot. 

1. They promise guaranteed returns
Markets are unpredictable. Therefore, how can anyone promise guaranteed returns? Advertising such promises are illegal in traditional financial markets.

2. Free
Rarely is a proper trading algorithm going to be free. The best one can hope for is a simulation or demo from a real trusted brokerage. 

3. Disclosure 
Who are the people behind the company? Who developed the bot? Is the info available on their software? Do they have any documentation or whitepaper of their procedure? 

Bitcoin Motion has been proven to be a scam and is re-used on a white-label basis by multiple shady agencies. Be aware, and protect your money. 

Be very careful when looking to trade cryptocurrency online. Reliable blue chip exchanges like [Coinbase](https://www.coinbase.com) are secure and are your best bet when investing in crypto. Real crypto trading bots do exist, such as Pionex. Such companies undergo heavy scrutiny, and a good way is to read the many reviews online. 

The basic steps you can take to protect yourself from crypto fraud are first to ensure the following:

1. Is my wallet protected?
Is your wallet legitimate in the first place? Also, if any company or individual asks for your wallet key to participate in an investment opportunity, it is probably a scam. Never give away your private crypto wallet key.

2. Watch your wallet
Makes sure you are constantly watching for strange transactions or security alerts from your wallet. If it’s your first time using a crypto wallet, only transfer a small amount of money as a test. 

3. Don’t rush! 
Take your time learning the world of crypto and read up on the legitimacy of any project you are interested in. Do your due diligence, and never believe anyone promising free money.

Ultimately, if something looks shady in the cryptocurrency world, it probably is. 

At best, the Bitcoin motion scam will take your $250. At worst, scammers will steal your financial records or identity. 



Exploring the Bitcoin Motion Trading Bot Scam

## Comments about theft from Wintermute CEO

According to a series of [tweets](https://twitter.com/EvgenyGaevoy/status/1572134271011225601) by Wintermute's founder and CEO, Evgeny Gaevoy, the attack allegedly targeted the company's decentralised financing (DeFi) operations. Gaevoy promised clients that the company is still "solvent with twice over" the $160 million taken in the residual stock.

As per blockchain research firm Elliptic, these services are "uniquely vulnerable to hacking" due to their open source code, vast pools of assets, and fast growth, which may have resulted in a gap in security best practices in some circumstances.

## Details of Wintermute scam

A cryptocurrency wallet address labelled as belonging to the Wintermute exploiter on blockchain explorer platform Etherscan revealed a series of transactions earlier on Tuesday, [one of which](https://etherscan.io/tx/0xd7bf7b67e0d0095b7eb1813a4a60c129b45694374bf996f9ecc249d07efbcd02) involved transferring 112 million native tokens of Curve's 3pool, a platform for swapping stablecoins, from a null address to the hacker.

The token exchange consisted of $114.4 million USDT, $61.4 million USDC, and $23.6 million DAI.

Based on research released last month by blockchain monitoring firm Chainalysis, a startling $1.9 billion in bitcoin was stolen in hacks of various platforms in the first seven months of 2022, a 60% rise from the same time the previous year. 

Some of the most [significant crypto breaches](https://www.cnn.com/2022/08/16/tech/crypto-hack-rise-2022?cid=external-feeds_iluminar_msn) this year have occurred on DeFi protocols, including a $625 million attack in March on a gaming-focused blockchain network that powers the popular video game [Axie Infinity](/news/article/axie-infinity-price). Some of these thefts, notably the Axie affair, have now been [linked](https://www.cnn.com/2022/04/14/politics/fbi-north-korea-hackers-crypto/index.html?cid=external-feeds_iluminar_msn) to North Korean hackers.

## Will Wintermute be able to pay lenders?

Wintermute, which Gaevoy started in 2017, is a "leading" digital asset market maker. It has offered liquidity on over 50 different exchanges and cryptocurrency platforms. The company informed users that service disruptions might occur over the following few days.

Wintermute is the [highest borrower](https://app.clearpool.finance/pool/0xCb288b6d30738db7E3998159d192615769794B5b?market=mainnet) on the DeFi liquidity marketplace Clearpool, with $22.2 million in USDC outstanding. According to Andrew Thurman, content lead at Nansen, it also has a $92.1 million USDT [loan](https://app.truefi.io/borrowers/0xA1614eC01d13E04522ED0b085C7a178ED9E99bc9) with TrueFi. According to the platform's website, the TrueFi loan will mature on October 15.

Gaevoy concluded his tweet by stating that Wintermute is solvent but issued lenders that they can also recall their loans if they wish. 




Wintermute victim of $160 million scam

An eastern European hacktivist organisation claims to have hacked every individual passport in Belarus, including its despotic dictator, Alexander Lukashenko, who refers to himself as the "last tyrant of Europe." Following the alleged data theft last summer, the Belarusian Cyber Partisans (BCP) minted many of the country's citisens passports as NFTs, including Lukashenko's. They listed them for sale on the crypto marketplace OpenSea earlier this week.

The NFT hack group is said to be made up of unknown Belarusian IT specialists who have launched a digital war on the Lukashenko administration, which they consider corrupt and illegitimate.

Lukashenko is a divisive person who has been in power in Belarus since the country's founding in 1994. Despite being elected on the promise of eradicating corruption, he has been accused of "rigging elections, torturing critics, and detaining and assaulting protestors" in the past by organisations such as the Organized Crime and Corruption Reporting Project.

The hacktivists claim to be fiercely opposed to what they perceive to be a corrupt dictatorship led by Lukashenko, who has also irritated the group by supporting Russia's invasion of Ukraine.

Through this [NFT](/news/article/what-is-timeless-crypto-nft) hack, the Belarusian Cyber Partisans also indicated that they wanted to sell NFTs containing the passport information of additional government officials close to Lukashenko.

"We also provide passports of his closest friends and traitors to the peoples of #Belarus and #Ukraine." "All funds will be used to support our work in targeting bloodthirsty regimes in #minsk and #moscow," the group wrote.

## OpenSea took down the offerings made by the NFT hacks

OpenSea took down the offers the same day they went up, later notifying [Gizmodo](https://www.gizmodo.com.au/2022/09/opensea-boots-hackers-for-claiming-to-mint-nfts-of-belarusian-dictators-stolen-passport/) that the crypto assets violated its rules on "doxxing." According to a business spokesperson:

"OpenSea's Terms of Service prohibit Doxxing and exposing personal information about another individual without their knowledge. The site enforces its policy in various methods, including blocking purchasing and trading on infringing content, delisting, and, in certain cases, banning accounts, as was the case in this case."



NFT hackers sell stolen passports on OpenSea

The [crypto market is growing](/news/tag/bull market) daily, and more brokerages are emerging to handle crypto assets. One such brokerage which is looking to leave a mark is [BC Bitcoin](https://www.bcbitcoin.com/). It is a European-based platform which launched in 2017. 

It has limited options for fiat currencies. However, you can buy or sell a wide range of cryptos through the platform. It has not attracted much attention globally as yet. That’s why investors can be sceptical about its legitimacy. 

You can decide by evaluating the following features in this thorough BC Bitcoin review!

## Supported fiat currencies and cryptos

Currently, the platform offers its services to customers in Europe and UK. It accepts EUR and GBP deposits. However, you will not be able to buy or sell using any other fiat currency like USD, CAD, or AUD.

However, it allows you to deal with numerous cryptos. Over 180 coins and tokens have been listed on the exchange, including all the major coins like [BTC](/coins/btc), ETH, LTC, SOL, DOGE, etc.  

## BC Bitcoin trading fees

Using its services will cost you around 1% to 5% of the transaction amount. You can calculate the trading fees through the Buy Coin tab before the transaction. All you have to do is to enter the amount of crypto you want to buy/sell and choose your fiat currency.  

## Payment methods

In terms of payment options, it can be an impressive brokerage. It offers an array of payment methods that allow you to use its services efficiently. These options include credit and debit cards, faster payments, BACS, and instant SEPA. 

## Transaction speed

It can instantly transfer cryptocurrencies as it usually takes 5-10 minutes. Currently, the firm processes these transactions in one to two business days.  

## Security and regulations

To ensure the security of transactions, it follows a formidable verification process. So, if you want to use this service, you must comply with all the KYC requirements. You must provide your personal and financial details so BC Bitcoin can verify them. 
The exchange follows Lithuanian regulations as it is registered in this country. However, the UK’s FCA or any other European authority have not regulated the firm.   

## User experience

It offers you an excellent user experience. The platform guides you through the entire transaction procedure, which makes it easy to use. Moreover, it provides 24/7 customer support via different channels, including live chat, email, and phone. 

## Bottom Line

BC Bitcoin can be a viable crypto asset brokerage option in Europe. But it would not be the ideal choice in other parts of the world. Though it allows secure trading with over 180 coins, it only supports EUR and GBP fiat currencies. Moreover, you cannot get live insights as there is no price chart. Another dicey thing is that the UK’s FCA does not regulate it. 

On the other hand, BC Bitcoin’s trading fees and speed are not quite optimal. Various other options provide better speed with lower fees. 
 



BC Bitcoin review

According to a series of letters sent on Tuesday morning, the 30th of August 2022, House Committee on Oversight and Reform requested information and documents from four agencies and five digital asset exchanges. [Coinbase](https://www.cnbc.com/quotes/COIN), FTX, Binance.US, Kraken, and KuCoin were among the parties contacted about what they are doing to protect consumers from scams and combat cryptocurrency-related fraud.
 
The letters request that government authorities and cryptocurrency exchanges respond by the 12th of September with details regarding their efforts to protect customers. According to the committee, the respondents' feedback will be utilised to develop legislative solutions.
 
The letters specifically request that the exchanges produce documents dating back to the 1st of January 2009. To demonstrate efforts to combat crypto scams and fraud, as well as efforts to identify, investigate, and remove or flag potentially fraudulent digital assets or accounts, as well as discussions about "whether to adopt more stringent policies.
 
In one letter to Sam Bankman-Fried, CEO and creator of FTX, the committee states that although some exchanges evaluate cryptocurrencies before listing them, others allow digital assets to sign up with little or no verification.
 
According to FTC analysis, more than $1 billion in cryptocurrency has been lost to fraud since 2021.
 
## Congress looks at crypto schemes developed by companies

Chainalysis, a blockchain analytics firm, discovered that [37% of crypto scam money](https://www.cnbc.com/2022/08/30/coinbase-ftx-binance-get-inquiries-from-congress-on-crypto-scams.html?__source=google%7Ceditorspicks%7C&par=google#:~:text=Blockchain%20analytics%20firm%20Chainalysis%20found,then%20vanishing%20with%20the%20funds.) last year went to "rug pulls". A rug pull is when someone lists a token on an exchange and invests in it to increase the price and market demand before selling the position at a premium and disappearing with the proceeds.

Binance US, which received an [investigation](https://www.reuters.com/legal/litigation/new-binance-class-action-likely-clears-one-hurdle-faces-plenty-others-2022-06-14/) from the committee on Tuesday, has been charged in a class action complaint with deceiving customers about the safety of investing in [terraUSD](/news/article/terra-usd) (UST) and its sister token, Luna.

The terms and conditions of the investor-crypto exchange agreement also differ, which needs to be standardised.
Agencies will continue infighting and cannot successfully implement consumer and investor safeguards relating to cryptocurrencies and the exchanges on which they are traded unless clear definitions and advice are provided. 






Congress investigates crypto firms scam protection

Innovations in blockchain technology are constantly evolving in the DeFi world. Now, there are many projects inciting investors’ interest in DeFi. But unfortunately, it is also being used for many illicit activities. Some of these projects are based on Ponzi schemes or other [crypto scams](/news/tag/scam), making some investors sceptical about their legitimacy.

[HyperFund](https://thehyperverse.net/) is one such infamous project which is controversial for using multi-level marketing. This platform claims to be a virtual Metaverse having its own currency and ecosystem. However, it seems to run a Ponzi scheme that promises over 400% ROI. Let’s find out what exactly HyperVerse is and what it offers!

## What is HyperVerse or HyperFund?

HyperFund, now known as HyperVerse, is a virtual galaxy with multiple planets. According to the website, it covers the themes of time travelling and alien creatures, having a futuristic setting in its game. You can also explore and participate in different activities on this Metaverse as voyagers.

Its [whitepaper](https://thehyperverse.net/whitepaper.pdf) suggests that it is a decentralised autonomous platform that offers its currency, HVT. Users can indulge in trading, play games, or socialise through V-DAO. 

## What makes HyperFund doubtful?

Here are some of the reasons why it sounds dubious:

•	Its affiliate program promises a massive ROI of 300% if you continue to contribute.

•	Many verified HyperFund reviews suggest that the company runs on a Ponzi scheme. 

•	Its website does not provide much information about the firm’s owners. 

•	The United Kingdom’s Financial Conduct Authority (FCA) has not registered the company and has directed investors to beware of this unauthorised firm. 

•	The company is a part of New Zealand’s list of scams maintained by the Financial Markets Authority (FMA).

•	As per the information available on the website, it is unclear what services it provides as a DeFi platform. 

•	Authorities in Guernsey also recognised it to be a controversial firm. 

## Is HyperFund a scam?

The platform runs a membership reward program. Previously, it was membership 1.0 that offered up to 300% profits in 20 months of investing. However, as the platform has upgraded to HyperVerse, it has introduced Membership 2.0. 

This reward program promises 4x rewards. If you invest 300HU, the platform claims to reward you 1200HU. Meanwhile, it also pledges 0.3% daily rewards. And to be part of this reward program, you at least need to invest 125 HU. Moreover, users can earn further rewards when they refer the platform to others.

These profits sound too good to be true. The reviews from the members of this reward program suggest that the company is a scam. Most users complained about not receiving any revenue even after months of investment. 

Furthermore, it has been recognised as a scam by the financial authorities of the UK, New Zealand, and Guernsey. 

Therefore, HyperFund checks most of the boxes for a Ponzi scheme. 

## Final take

HyperFund/HyperVerse is a scam as it is running a Ponzi scheme according to various sources. It pledges huge profits of up to 400% through its affiliate and referral program. However, the users have reported that the company is not providing any rewards as revenue. Several financial authorities have already recognised it as a scam.

Be warned and beware!



HyperFund review: is HyperFund a Ponzi scheme?

## Chainalysis crypto scam report

According to a Chainalysis report released on Tuesday 16 August 2022, the research suggests that total crypto scam revenue is presently resting at $1.6 billion, a [65% decrease from the prior year period](https://blog.chainalysis.com/reports/crypto-crime-midyear-update-2022/), which appears correlated to the market average of falling cryptocurrency prices. 

The report points out that speculative investment opportunities and outsized profits appeal most to victims during bull markets and that traders more likely to fall for crypto scams. Bull markets also have a larger percentage of new, novice crypto investors who are more vulnerable to investment scams. 

The numbers in the report are admittedly biased in the report because of the comparably massive PlusToken and Finiko cases in 2021, which generated $3.5 billion in total scam income. According to reports, the most significant fraud case of 2022 has only garnered $273 million to the cannabis investing portal JuicyFields.io, which has locked investors out of their accounts on its cannabis-focused "e-growing" service. 

On the other hand, crypto-based hacking has defied the trend, jumping 58.3% to $1.9 billion through July 2022, excluding the [$190 million Nomad bridge attack](/news/article/nomad-crypto-hack) that began on August 1st. This value increase is primarily due to the emergence of decentralised apps, [which surged in 2021](https://blog.chainalysis.com/reports/2022-defi-hacks/). Often scammers create fake giveaway scams or replicate existing sites to promote "free money" or guaranteed returns. These scams function by stealing personal information, private keys and other personal details which they transfer to an anonymous digital wallet.  


According to the research, a significant concentration of these hackers originated from North Korean elite cyber organisations such as Lazarus Group, with these entities accounting for over half of the crypto seized.

## Crypto scams are not entirely a bad thing

Due to smart contract programming languages like Solidity are relatively new, the fraud cases are not terrible as these vulnerabilities can improve security by allowing code audits. The crypto brand has suffered due to  bad actors leaving investors feel that there is no security, but through learning the hard way from these mistakes we hope that industry participants will build the crypto ecosystem back better. 

The report also stated that darknet market income is down 43% in 2022; dark web black markets provide illegal products and services, typically utilising cryptocurrency as payment.


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