Blockchain & Cryptocurrency , Cryptocurrency Fraud , Fraud Management & Cybercrime

Cryptohack Roundup: Ukrainian Killed Over 3 Bitcoins

Every week, Information Security Media Group rounds up cybersecurity incidents in digital assets. This week, a Ukrainian was murdered over three bitcoins, FTX's Salame sought to postpone sentencing over a dog bite, Russian speakers drove crypto cybercrime, the FTC fined a Coinbase Group company $4.5 million, and Hong Kong police arrested scammers.

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A 29-year-old bitcoin enthusiast was kidnapped and killed in Kyiv, according to the Ukrainian police agency. The police arrested four men, aged between 24 and 29, for allegedly abducting the victim and stealing three bitcoins worth around $207,000. The police received reports of the abduction around midnight, when residents in the Solomyansk district heard screams and saw several men forcibly putting a man into a car. The investigation revealed that the attack was premeditated. The perpetrators abducted the victim near his home and took him to an abandoned building. After draining the his bitcoin wallet, they strangled him and buried his body in a forest. Police caught the perpetrators and recovered cash converted from the stolen bitcoins. The alleged murders are in custody, charged with premeditated murder, robbery and concealment, and they are facing life sentences without the possibility of parole.

Former FTX executive Ryan Salame's lawyers reportedly requested a federal judge to delay his prison sentence to allow for urgent surgery following an alleged dog attack on June 29. The former co-CEO of FTX Digital Markets received a seven-and-a-half-year prison sentence after pleading guilty to criminal charges last year. He admitted to conspiring to make unlawful political contributions and operating an unlicensed money-transmitting business. He worked with former FTX CEO Sam Bankman-Fried, who was sentenced to nearly 25 years in prison for fraud in March. Salame's sentencing was originally scheduled for Aug. 29, but his lawyer is seeking a postponement until Oct. 13.

Russian-speaking threat actors from former Soviet Union countries are the main drivers of crypto-related cybercrime, including ransomware, illegal crypto exchanges and darknet markets, TRM Labs said in a report. Last year, these groups were responsible for 69% of all ransomware earnings, totaling over $500 million. The largest operators, LockBit and Alphv, aka BlackCat, generated at least $320 million from their attacks. Russian-language darknet markets account for 95% of global dark web drug sales conducted in cryptocurrency. The top three processed $1.4 billion in crypto last year, a 33% increase from 2022. The entire Western darknet market ecosystem managed less than $100 million last year, a decrease of around 20% from the previous year.

The U.K. Financial Conduct Authority fined CB Payments Limited, part of the Coinbase Group, over $4.5 million for repeatedly violating a requirement that barred it from offering services to high-risk customers. CBPL ignored the restrictions to provide e-money services to 13,416 high-risk customers. About 31% of these customers deposited approximately $24.9 million, which was used for withdrawals and crypto transactions totaling around $226 million through other Coinbase entities. The FCA said that CBPL failed to design, test, implement and monitor controls with due skill and care to meet the voluntary requirement.

Hong Kong police reportedly arrested four individuals, including a 14-year-old, for their roles in a syndicate using counterfeit banknotes to defraud cryptocurrency owners, resulting in losses of up to $1.4 million. The suspects, the oldest of whom was 39, were detained for conspiracy to defraud and possessing and using 5,000 counterfeit banknotes. The police described the syndicate as a structured operation in which members were assigned specific roles. Two masterminds obtained the fake banknotes from a mini storage facility in Mong Kok and set up a fake business. They impersonated well-known cryptocurrency investors, luring victims online with above-market offers for digital currencies. Victims were invited to the fake store and shown stacks of counterfeit banknotes - only the top and bottom notes were real. The suspects insisted on online transactions and prohibited the victims from untying the stacks. After obtaining cryptocurrency, the scammers quickly moved the assets and refused to pay their customers, defrauding 12 victims from October 2023 until their arrest.