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US Crypto Scammers’ Linked to Bitfinex, Tether in Shadow Banking Fraud

US Crypto Scammers’ Linked to Bitfinex, Tether in Shadow Banking Fraud

US Crypto Scammers’ Run Reveals Tether Links in Massive Multi-Million Shadow Banking FraudUnited States law enforcement have charged two for offering shadow banking services for crypto exchanges. | Source: ShutterstockBy CCN.com: The U.S. Justice Department has nabbed one of two crypto fraudsters accused of a shadow banks scheme that entailed the processing of hundreds of millions of dollars of unregulated transactions on behalf of several cryptocurrency exchanges.On the surface, these seem like the run-of-the-mill bad actor arrests. However, chatter is picking up that this may relate to the Bitfinex and Tether debacle. The court filings show overlapping of the players.Reginald Fowler of Arizona was arrested Tuesday, while his co-conspirator Ravid Yosef is still on the loose. The law may take a while to catch up with Yosef. She’s from Tel Aviv, Israel, according to the Justice Department statement about the charges.The pair was charged with bank fraud. Fowler was also charged with operating an unlicensed money transmitting business.The accusationsTheir scheme entailed lying to banks in order to open accounts. They then used those accounts to receive deposits from individuals who were buying cryptocurrency. It allegedly happened in 2018.Specifically, Fowler and Yosef would tell one bank that one particular account would be used to process real estate investments. The indictment states:One of the Crypto Companies marketed itself as a company that allows clients to deposit and withdraw government-backed, or “fiat,”  currency to numerous crypto exchanges. Users of one particular crypto exchange deposited government-backed currency into a bank account of the Crypto Companies that was opened and maintained by Fowler at a specific international bank.The Justice Department said records show that “dozens of individuals from various countries wired millions of dollars” into that particular account. At the same time, millions of dollars were wired from the account to other individuals and companies.Fowler and Yosef then falsified electronic wire payment instructions to conceal the true nature of a voluminous cryptocurrency exchange business, the Justice Department charges.Bitfinex and Tether linkThese charges were brought by the U.S. Attorney for the Southern District of New York, which is the same office that Bitfinex and Tether are battling. Last week, it obtained a court order to shut down the pair from operating in the state over the loss of $850 million funds through some questionable happenings.In the court filing for this shadow banking case, two banks identified are HSBC Securities USA/Pershing and HSBC  Bank USA. Their funds are “held” by Global Trading Solutions, according to the filing.Global Trading Solutions operates Crypto Capital, which is Bitfinex’s money processor. The New York Attorney General’s court filings assert that the Crypto Capital played a role in the $850 million loss involving Bitfinex and Tether.ie there are two separate allegations of fraud, one against Global Trading Solutions LLC by the US AG for operating an unlicensed money transmitting business and lying to the banks, and one by the NY AG against Bitfinex/Tether for self-collateralization and lying to customers.— (((Frances Coppola))) (@Frances_Coppola) April 30, 2019Today’s indictment from the Southern District of New York against Reginald Fowler and Ravid Yosef mentions “Global Trading Solutions LLC”.Therefore, it is likely that this new case relates to Bitfinex and Tether pic.twitter.com/WKJNpbrqOH— BitMEX Research (@BitMEXResearch) April 30, 2019Law enforcement warns scammers, againU.S. Attorney Geoffrey Berman said:“Reginald Fowler and Ravid Yosef allegedly ran a shadow bank that processed hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges.  Their organization allegedly skirted the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and did so through lies and deceit.”The Justice Department did not name the exchanges.FBI Assistant Director William F. Sweeney Jr. said:“Lying to banks and skirting the regulations put in place by the banking industry is a violation of federal law, a crime both Fowler and Yosef are charged with today.  Taking it one step further, as alleged, Fowler himself directed the ebb and flow of significant amounts of money to and from these various bank accounts, despite the fact that he was not licensed to do so.May this be a reminder to all that there are consequences to engaging in fraudulent behavior and risky business practices.” About The AuthorTedra DeSueIf you can buy it, trade it, invest in it, or sell it, I write about it. For more than 20 years, I’ve covered all things finance. I threw myself into covering the crypto space with the keen understanding that it would be an industry disruptor. I’m in constant search for the real Satoshi Nakamoto!
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Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

In the past seven weeks, white hat hackers earned at least $32,150 by fixing security flaws in popular cryptocurrency and blockchain platforms like TRON, Brave, EOS and Coinbase.
According to data reviewed by Hard Fork, 15 blockchain-related firms have paid rewards to security researchers between March 28 and May 16, split across 30 publicly-released bug reports.

Omise, the software firm behind cryptocurrency OmiseGo, fielded the most fixes (six). Blockchain-powered prediction market Augur disclosed three reports, as did Brave Software, makers of the Brave browser, which features its own native token.

Projects adjust their HackerOne rewards to the severity the discovered security flaws. Whilst the majority of Omise’s reports were only worth around $100 each, other payments in the past seven weeks were much higher.
Block.one, the firm behind the EOS “blockchain,” rewarded one hacker with $10,000 for a single fix, as did budding network Aeternity.
TRON also paid $3,100 to the researcher who realized the network was susceptible to being flooded with malicious smart contracts, which would have brought its blockchain to a screeching halt.
The amount of hackers who prefer to fix security issues seems to be remaining steady — but sometimes they can make off with much bigger amounts exploiting vulnerabilities themselves.
Indeed, cryptocurrency exchange Binance revealed attackers had successfully stolen 7,000 BTC (then $40 million, now $55 million) from its own wallets last week.
Coincidentally, Binance runs its own bug bounty program with a maximum reward of $100,000 for the most critical of vulnerabilities. The Binance hacker remains at large.

Published May 20, 2019 — 15:21 UTC

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ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

Despite abandoning plans to build its own Bitcoin wallet, ABN AMRO is not quite done with blockchain tech.
The Dutch banking giant has announced plans to launch a decentralized trade inventory platform in collaboration with Accenture and ING Bank, according to a press release (spotted by CoinDesk).

Codenamed Forcefield, the project will employ Internet-of-Things (IoT) devices to provide “real-time insight into trade inventories.” ABN AMRO claims the platform’s monitoring features “will lead to more secure physical handling processes and a reduction of costs.”
Upon launch, the project will focus on “refined metals,” but “functionality will be expanded across other dry bulk commodities” in the future.
In addition to ING and Accenture, a number of other companies – including Anglo American, CMST International, Hartree Partners, Macquarie, Mercuria, and OCBC Bank – have also signed a memorandum of understanding to join Forcefield.
Back in January, ABN AMRO teased plans to develop its own cryptocurrency wallet, called Wallie. But as Hard Fork reported, the bank has now ditched Wallie as cryptocurrencies are still “too risky.”
“We have approached all the people who have shown interest,” ABN AMRO press officer Jarco de Swart told Hard Fork. “We have concluded that cryptocurrencies because of their unregulated nature are at the moment too risky assets [sic] for our clients to invest in.”
ABN AMRO and ING are hardly the only banks looking to get in on the blockchain hype. Indeed, leading banks – including Barclays and HSBC – reportedly poured $50 million into a blockchain-based digital cash system, expected to launch in 2020.

Published May 20, 2019 — 15:00 UTC

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