Crypto Crime: Man Sentenced 5 Years in Prison For Buying a Gun with Cryptocurrency

Recently, US Border agents have identified ’48 years-old man, David Mitchell who bought a gun online in the US using cryptocurrency worth more than £2,000. Mitchell had ordered a package of a Glock 9mm gun with magazine, silencer and 150 rounds of 9mm ammunition.

 

Court convicts actions as unlawful

He was first arrested on September 19, 2018, by the Organized Crime Partnership (OCP) (Scotland) which came into existence on September 01, 2018. The body was initiated to combat organized crime with the collaboration of Scotland Police and the National Crime Agency. David’s arrest is the first case OCP since they started as a joint task force.

  • At first, he ordered the packed using cryptocurrency
  • Task force secretly scrutinized him, seized the package he ordered and sent a dummy package (known as placebo) instead.
  • Later, the man caught ‘making arrested for using dark web’ and questioned over the transaction

 

On Monday, January 13, 2019, the Mitchell was presented before Judge Lord Pentland and eventually, he sentenced him five years in prison for his action. The hearing at High Court in Edinburgh concluded,

“It appears that your decision to acquire the gun and the other items arose from an obsessive preoccupation on your part with exploring whether it was possible to do so by making use of the dark web”. The court further continued, “You must have appreciated that this was unlawful. For this conduct, you must be punished.”

Further, on Mitchell’s part, there’s no information revealed as to what motivated him to perform the act. Detective Chief Superintendent Gerry McLean who is the lead in charge of ‘Police Scotland praised the newly formed ‘OCP’s work and said;

David Mitchell never offered any information that would have allowed us to better understand what his motivation was to secure a firearm.


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Author: Tabassum
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FinCEN Says It Now Receives 1,500 Crypto Complaints a Month

The Financial Crimes Enforcement Network (FinCEN) receives more than 1,500 reports every month from financial institutions regarding cryptocurrencies, a top official said Thursday.

LIONBIT

FinCEN director Kenneth Blanco, speaking at the Chicago-Kent Block (Legal) Tech Conference, discussed the role his agency takes in regulating cryptocurrencies. He noted that while cryptocurrencies can prove beneficial for certain use cases, they also create opportunities for bad actors such as financial criminals, terrorists and rogue states.

Blanco emphasized the importance of Suspicious Activity Report (SAR) filings – a type of document that financial institutions must file following a suspected incident of money laundering or fraud. FinCEN receives more than 1,500 SARs every month regarding suspicious activities involving cryptocurrency transactions, he said.
These reports come from both traditional financial institutions and cryptocurrency exchanges, he said.

TIP

He explained:
“It was filings by both banks and other virtual currency exchanges that provided critical leads for law enforcement. This information included beneficial ownership information, additional activity attributed to the exchange of which we were previously unaware, jurisdictional information, and additional financial institutions we could contact for new leads. All of this was obtained through SARs and the supporting documents filed by financial institutions.”

Blanco also discussed FinCEN’s role in the crypto space more broadly, explaining that the regulator has worked for years in the cryptocurrency field, with a focus on “exchanges, administrators and other persons involved in money transmission” related to cryptocurrencies.

He justified the agency’s legal standing in the field by noting that cryptocurrencies acting as a substitute for fiat currencies are covered by a 2011 rule FinCEN issued regarding money service businesses that provide money transmission services.
In addition, Blanco noted that the agency has been working closely with other regulators, including the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) on “policy development and regulatory approaches” related to cryptocurrency.

Blanco referenced initial coin offerings (ICOs) during his remarks, noting that “this rapidly growing area has gained a lot of recent public attention.” He specifically cited fraud around the fundraising method as an area of focus.

He continued:
“While ICO arrangements vary and, depending on their structure, may be subject to different authorities, one fact remains absolute: FinCEN, and our partners at the SEC and CFTC, expect businesses involved in ICOs to meet all of their [anti-money laundering/combating the financing of terrorism] obligations. We remain committed to taking appropriate action when these obligations are not prioritized, and the U.S. financial system is put at risk.”


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Author: Muyao Shen
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Monero [XMR] mining malware hijacks Brazil: Claims 200,000 victims

On the 3rd of August, a group of Brazilian systems were infected by a malicious software that targets a specific brand of routers for its activities. This was discovered by, Simon Kenin, a TrustWave researcher who said that the router MicroTik is being targeted and over 200,000 routers were secretly programmed for mining Monero [XMR] across the country.

LIONBIT

The cybercriminals were able to hack their way into the system using a malevolent code that covertly runs coinhive in the backend. In the case of Monero, it uses CPUs and coinhive, a very well-known Monero mining script, it is globally utilized to mine coins. This also makes it easier to hack systems.

Sources from Forbes state that this was possible due to a small microchip located inside the router that is similar to that of any hand-held device. This Microchip is not very strong but is still capable of doing more than just connecting a user to the web or enabling WiFi services.

Furthermore, although mining activities do not pose a threat to crypto-users or their accounts, it can seriously degrade a computer and significantly reduce the speed at which a system works. In addition, the risk is greater for handheld devices as it can cause the device to overheat up to a point where it can melt.

Although a patch for this threat was provided by the manufacturer in April, many routers were not updated.
In his analysis, he said:
“Let me emphasize how bad this attack is, there are hundreds of thousands of these devices around the globe, in use by ISPs and different organizations and businesses, each device serves at least tens if not hundreds of users daily.”

Simon states that mining has become a trend in the crypto world and now it appears that using scripts like coinhive have become the latest trend.

He further adds:
“Miners, on the other hand, can be a lot more stealthy, so while a single computer would yield more money from ransomware if the user ends up paying, an attacker would prefer to run a stealthy miner for a longer period of time. The plan being that at some point the mining would be as profitable as, if not more than, the one-time ransom payout.”


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Author: Gautham Kadri
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International Task Force Notes Use of Cryptocurrencies in Financial Crime

The Internal Revenue Service (IRS) announced Monday that a new joint force of tax enforcement authorities will combat international and transnational tax crimes – including cybercrimes facilitated through cryptocurrencies.



Tax enforcement agencies from the U.K., Australia, Canada and the Netherlands will join the IRS in forming the Joint Chiefs of Global Tax Enforcement (J5) to prosecute tax crimes, according to a press release. The organization was formed in response to “a call to action” by the Organization for Economic Co-operation and Development (OECD) to “do more” on the crackdown on tax crimes.

The entity has already met, with cryptocurrencies coming up as an area of concern in financial crimes.

In a statement, Dutch Fiscal Information and Investigation Service general director Hans van der Vlist said:
“The unique thing about the J5 is the operational collaboration between five countries on tackling professional enablers that facilitate offshore tax crime, cybercrime and the threat of cryptocurrencies to tax administrations, as well as making best use of internationally available data and technology.”

Johanne Charbonneau, general director of the Canada Revenue Agency, also said that J5 is building a “serious commitment” in an international cooperation that will fight against serious international tax crimes, including cybercrimes through “the use of cryptocurrencies.”

No details are disclosed regarding how J5 will work together to end the threats received from cryptocurrency-related tax crimes, but an update on its initiatives is expected in late 2018, according to the news release.


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Author: Muyao Shen
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Fujitsu and Japanese Police Team up for Crypto and Blockchain Training

Japanese tech giant Fujitsu has been helping train regional police forces in the Chiba Prefecture in blockchain and cryptocurrency-related matters.

Per Nikkei, Fujitsu held a series of joint, “knowledge-sharing” workshops, co-hosted with cyber police officials, briefing some 50 police officers and Fujitsu employees about the latest developments in cryptocurrency-related crime, blockchain security measures and means of investigating potential fraud cases related to cryptocurrencies.

Nikkei quotes a Chiba-based Fujitsu spokesperson as saying, “We want to lead crime deterrence and blockchain technology development.”

The same media outlet also quotes a senior police officer in Chiba’s cybercrime division as saying, “We must develop a robust system that can help us cope with cryptocurrency-related crime. We will continue to deepen our collaboration with companies like Fujitsu to prevent the abuse of cryptocurrencies.”

Fujitsu signed a “cybersecurity partnership” agreement with the Chiba police in July last year, and the company is actively pursuing a range of blockchain-related developments both in Japan and abroad.

Chiba police, meanwhile, have been cracking down on web developers running cryptocurrency mining apps – such as Coinhive software – on their websites. Local Japanese police forces have termed extensions of this sort “viruses,” and have hit developers with hundreds of dollars’ worth of fines.



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Author: Tim Alper
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Armed crypto robbers steal Bitcoin worth $1 million

As reported by The Atlanta Journal-Constitution, in Forsyth County this week, five men were charged for allegedly scheming to steal Bitcoin from a local resident.


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According to recent reports, the five tried to steal Bitcoin which amounted to nearly $1 million. These men were each accused on charges of conspiracy to commit burglary and conspiracy to commit robbery by force, both felonies.

Trivette Lane Adams, Matthew Schwartz, Robert Jacob South, Justin Eric Ellison, and Michael Anthony McDermott are the names. This case supposedly began when the Forsyth County Sheriff’s Office got a report about people coming from out of state to possibly commit a Bitcoin felony, Atlanta Constitution deputies said.


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Adams, age 20 from Texas and McDermott, age 18 from California were arrested near Hartsfield-Jackson International Airport trying to flee the state, as per the deputies. Jacob South, age 21 from Norcross and Schwartz, age 18 from California were soon captured in Chicago, as per what the deputies said. Adams, Schwartz, South, and McDermott were arrested by deputies in a Forsyth County hotel, allegedly in possession of zip ties, duct tape, bandanas and latex gloves, in late January. They were released as the felony could not be proved.

However, the sheriff’s office continued to investigate the men and later deputies connected them to the planned robbery report they had received. Deputies also were successful in identifying Ellison of Illinois and he was also arrested.

This is not the first time that small-scale robbers have tried to steal cryptocurrency, there have been reports of similar events from around the world. Some of the noted ones are:

**In the UK, a cryptocurrency trader was robbed by four masked men at gunpoint and ordered him to transfer all of his Bitcoins to them.
**In Manhattan, the district attorney had charged a man with robbery and kidnapping after he swiped a digital wallet containing a fortune in Ethereum cryptocurrency. The victim in this was held at gunpoint.



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Author: Ranjitha Shastry
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6 Outrageous Moments In Crypto Twitter Scam History

Perhaps nowhere else within the cryptocurrency space have scammers become more frustrating than on crypto Twitter. The social media site has been overtaken with accounts impersonating notable figures and businesses promising tens of thousands of bitcoin or ether or XRP, in return for users merely sending a small amount of a cryptocurrency to their accounts in return.


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While it might seem intuitive that these giveaways are suspect, the fraudsters are playing to people’s FOMO (fear of missing out), but also the language and cultural barriers that exist within the diverse, global community.

Indeed, crypto aficionados of all kinds – not just the most prominent founders, but also low-profile developers and newly announced ICO issuers and nearly everyone in between – wake up every morning, scouring their Twitter accounts and reporting the abuse to the social networking giant.

Yet, it seems there isn’t an easy way to stop the shakedowns.
It’s led many crypto visionaries to go about getting Twitter’s blue check mark, a sign that an account has been verified and so, supposedly more legitimate. But even that has proved manipulable.

Airing frustration towards the chaos that crypto Twitter has devolved into, a well-known cryptocurrency advocate known as Thomas ‘Mad Bitcoins’ Hunt tweeted:
“Your system is broken. Allowing users to choose the same name and image as other users is a mistake that leads to fraud. Change your system. End this fraud.”
But still the chaos has continued (if not gotten worse), and many crypto enthusiasts are deciding if you can’t beat ’em, you might as well laugh at ’em.
As such, they’re tweeting out the most egregious interplay between themselves and the scammers, and sometimes one con man to the next.



1. Not giving away ETH, but giving away ETH
The instances of impersonation have gotten so bad, that many crypto visionaries have added language to their profiles stating “[Not giving away ETH/BTC]” – as if it was their middle names.
But, although it could seem counterintuitive, as these fraudsters merely copy and paste the name and image onto their scam accounts, that language too has carried over.
Generally, these accounts comment their giveway images under a post from the real person they’re trying to impersonate, hoping to pray of users that aren’t looking closely at the handles, which at times are only one letter off from the originals.
And as scammers have become more sophisticated, they’ve taken to blocking the person they’re trying to impersonate, so that that person can’t see their posts, report it and get shut down by Twitter.

2. Follow Fridays
Just like the scammers above try to confuse users by putting their fake posts side-by-side the people they’re impersonating, other scammers have jumped on posts where many people are mentioned.
Recently, South African crypto exchange, iceCUBED, tweeted out a list of crypto notables for what has become known as “Follow Fridays” – whereby a user tweets out people that their followers should follow.
I was featured alongside folks like monero lead maintainer Riccardo Spagni, Lightning Labs founder Elizabeth Spark and litecoin creator Charlie Lee (I know, I’m not worthy).
Right under that post, though, another user by the same name, but with a different handle, posted about an ETH giveaway.
And in that way, some unsuspecting users could think that not only the exchange but also the people tagged in the post support the promotion.
While journalists might seem strange characters to impersonate (especially since I’ve written about not being a crypto millionaire), it has become a popular move since they typically have significant followings of users of all skill levels, including newbs to the cryptocurrency scene who might not be well-versed on the state of the industry.

3. Getting personal
Another way scammers (whose accounts generally have only a couple followers and whose only tweets are the ones about the giveaways) are trying to trick users is by creating more personal accounts.
For instance, a Twitter user names Dennis Parker was recently impersonated. The account copied and pasted his name and picture but the bio was very different.
Whereas the real Dennis Parker’s bio just says, “Bitcoin Maximalist,” the scam account (which was still active at the time of this writing) says, “Foodie, Editor, Water Protector, Wine Connoisseur, Unwashed Mass. I own 25 hoolahoops.”
As Parker tweeted:
“My scam accounts are getting personal.”
Not only that, but scammers have also gone to other lengths to try and bilk users out of their crypto. Notable venture capital investor Tim Draper, tweeted about one of his impersonators asking his followers for funds in exchange for mining bitcoin for them.

4. Scammers calling out scams
Most people in the crypto scene know Neeraj Agrawal, the communication lead at Washington D.C.-based lobbying group Coin Center and also a meme god on crypto Twitter.
Lesser-known is NeerajKAgrawal7, who recently replied to an offering of ETH with one word – “scam.”
While that might not seem particularly surprising, what’s absurd is that the response came from one of Agrawal’s imposters, not Agrawal himself.
As Agrawal tweeted, “My ether scammer is calling out other ether scammers.”
In a similar instance, an account posing as Bruce Fenton (the thought leader and investor in the cryptocurrency space who founded Satoshi Roundtable) commented with its own crypto giveaway on the giveaway post from a fake Mad Bitcoins.Speaking to the event, Mad Bitcoins tweeted:
“It’s a beautiful cycle of spam Twitter and you should make it stop!”

5. Tons of Charlie Shrem’s
As mentioned above, many of the most acclaimed people in the cryptocurrency space deal with insane amounts of scam accounts.
Case in point, Charlie Shrem, the founder of now-defunct early bitcoin exchange BitInstant and now an adviser for several blockchain projects, tweeted recently about all the scam accounts under his name.
He said:
“I do give away stuff from time to time, but will never ask you to send me something first.”
The tweet was accompanied by images which display just how rampant the scam accounts have become.
Another crypto character that gets impersonated quite a bit is John McAfee, who became famous after launching the popular anti-virus software, is now promoting ICOs on Twitter for a charge.
Yet, many crypto enthusiasts might not sympathize with McAfee since they see his new “job” as dubious.
In fact, McAfee’s latest ICO-promoting tweet featured Pink Taxi Coin, a fraudulent ICO project that featured a plagiarized white paper and website, among other red flags.

6. “I’ve made it”
While these impersonators have become a scourge on crypto Twitter, some have taken to joking about how having a scammer impersonate them is a way to display that they’re popular.
A prominent parody account in the space, Swift on Security said, after a fraudster impersonated the account, “I’ve made it. I’ve finally made it.”
As such, Kevin Pham, who became a staple of crypto Twitter this year, tweeted (after being impersonated):
“Fuck blue checks. Having a scam account is the free market signalling you’re a somebody on Crypto Twitter!”



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Author: Bailey Reutzel
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‘Crypto’ Fraudster Dupes Japanese Pensioner out of USD 9,000


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Fraudsters in Japan are now targeting the elderly with cryptocurrency-related scams. News outlet Mainichi reports that an 84-year-old woman in Ashikaga, in Tochigi Prefecture, handed over USD 9,000 to a scammer after falling victim to a voice phishing attack.

Police in Ashikaga recounted that the woman was contacted in mid-February by phone by a man pretending to be her brother. The man told her that he was in severe financial difficulties after running into trouble with his cryptocurrency investments.



Police say that the fraudster was taking advantage of the fact that the news in Japan at the time was dominated by cryptocurrency-events such as the massive hack on the Coincheck exchange, crypto price volatility and reports on Japanese investors who had lost considerable amounts of money on crypto.

After repeated phone calls from the fraudster, the pensioner agreed to meet a man who claimed to be a lawyer representing her brother, in a public street, where she handed over the money in cash.

The woman realized she had been duped the next day, when her real brother contacted her.

A police spokesperson said that it is still searching for the fraudster, but warned, “If members of the public receive phone calls asking for help in any cryptocurrency-related case, please double-check with your family, or contact the police immediately.”


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Author: Tim Alper
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Dubai police arrests gang for stealing Bitcoin [BTC]

A 10-men gang has been arrested by the Dubai police after they had reportedly stolen AED 7 million [around 1.9 million USD] from a prospective Bitcoin buyer. The culprits were arrested less than 48 hours after the police received a report of the robbery incident. Police authorities claim that the recently integrated artificial intelligence [AI] technology at their disposal helped with the timely arrest of the gang.

Bitcoin is a form of cryptocurrency or digital currency and a worldwide payment system. It is the first decentralized digital currency, as it works without a central bank or single administrator. Bitcoin has grown in popularity in recent years and its value was at an all-time high of $20,000 in December of 2017.


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The police report states that the gang trapped two brothers who were looking to buy Bitcoin. The gang was led by one Gulf Cooperation Council [GCC] national and other members of Asian origin. The supposed thieves convinced the brothers that they had Bitcoin that they wanted to sell. The gang tricked a shop owner into renting his shop for the evening, but in reality, the shop owner wanted to sell his shop.

Having access to the shop, the gang laid an ambush for the brothers. 3 members stood outside the shop and 6 were inside the shop. As soon as the brothers entered the shop, they were ambushed by the gang members. According to reports, the gang members were armed with guns and had sharp objects. They managed to subdue the brothers and steal their money before escaping. The robbery transpired in the Al Muraquabbat area on April 25th.

After the arrest, Major General Abdullah Khalifa Al Merri, the Commander-In-Chief of the Dubai police, praised his men for their work in capturing the suspects despite the lack of evidence at the crime scene.

Major Abdullah says:
“Using AI helped Dubai Police to arrest a Gulf National, who is the head of the gang, and other Asian suspects. The information from the data analysis centre helped the officers arrest all the gang members.”

Major Abdullah advised the prospective buyers to use the official channels when buying/selling cryptocurrency to avoid falling into the traps of the robbers.


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Author: Rajath Kumar
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