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Change Of Heart: Crypto Scammer Returns $34.7 Million To Victim’s Address

A week ago, a crypto whale fell victim to a scam that resulted in the loss of over $71 million. In the following days, the scammer moved the funds to veil them. But in a shocking turn of events, they returned the funds to the victim.

Address Poisoning Scam Snatches $71 Million

On May 3, whale 0x1E22…8FD5 lost 1,155 Wrapped Bitcoin (WBTC), worth around $71.31 million, after falling victim to an address poisoning scam. This scam, also known as address spoofing, consists of trying to trick users into sending funds to fraudulent lookalike accounts.

The “vanity addresses” are custom-made with specific characters that look like the intended recipient’s address. Scammers send transactions of no value, hoping the similarity between the addresses will fool the user under attack.

If successful, victims copy the fraudulent address from the previous transactions and accidentally send their assets to the scammers instead.

PeckShieldAlert reported that the phisher immediately swapped the stolen WBTC for 23,000 Ether (ETH) before transferring them to a different address. Throughout the following days, the scammer laundered the funds. Sending them to ten different addresses before distributing the tokens through over 100 other addresses.

This development painted a looming picture for the crypto whale. At this point, the funds appeared to be unrecoverable. One user called the massive number of transfers a “crypto musical chairs” game.

Others justified the scammer, claiming he had not stolen the funds, as “he just received them.” This stance disregards the transaction’s nature. The transfer occurs under the belief that funds are safely being transferred to the intended account and not a lookalike.

Moreover, the lookalike address is in the victim’s transaction history, clearly intended to deceive the user into receiving funds not meant for them.

Change Of Heart Or Scared Of The Crypto Community?

In a shocking turn of events, the scammer sent 51 ETH, worth around $153,000, back to the victim on Thursday. Alongside the funds, the phisher sent a message asking to contact the whale, seemingly looking to negotiate.

The reasons behind the sudden change of heart remain a mystery to the community. Many are jokingly theorizing why the scammer returned the funds. One X user playfully suggested that the phisher feared being investigated by crypto sleuth ZachXBT.

Others claimed that “even the scammer doesn’t want ETH,” referencing the criticism the second-largest cryptocurrency has faced after its performance during this cycle.

In the early hours of Friday, PeckShieldAlert revealed that 2,683.7 ETH, worth about $8 million, had already been transferred to the whale from nearly 50 different addresses. A couple of hours later, an update showcased that around 50% of the total funds had been returned, accounting for 11,446.87 ETH, or $34.7 million.

Retrieving all the assets might take time due to the large number of addresses holding the funds. At the time of writing, over $45 million worth of ETH has already been returned, and the transactions continue.

crypto, ETH, ETHUSDT

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Crypto Money Laundering Plummets By 29% In Latest Chainalysis Findings

According to a recent report published by crypto analytics firm Chainalysis, money laundering involving crypto assets has experienced a notable decline compared to the previous year. However, the report highlights that illicit actors have started adapting their tactics to evade detection and further obscure the movement of illicit funds. 

Evolving Tactics In Crypto Money Laundering

According to the report, illicit addresses sent approximately $22.2 billion worth of cryptocurrency to various services in 2023, a significant decrease from the $31.5 billion sent in 2022. 

While part of this decline can be attributed to an overall decrease in legitimate and illicit crypto transaction volume, the report reveals that money laundering activity witnessed a steeper drop of 29.5%, compared to the 14.9% decrease in total transaction volume.

Crypto

Centralized exchanges remain the primary destination for funds originating from illicit addresses, with this trend remaining relatively stable over the past five years. However, the report indicates a shift in the distribution of illicit funds, with a growing share being directed towards decentralized finance (DeFi) protocols. 

Chainalysis suggests that this can be attributed to DeFi’s overall expansion during the same period, although the transparent nature of DeFi platforms makes them less favorable for obfuscating fund movements.

While the breakdown of service types used for money laundering in 2023 resembled that of the previous year, there were noticeable changes in specific types of crypto criminals’ money laundering practices. 

The report highlights a significant increase in the volume of funds sent to cross-chain bridges from addresses associated with stolen funds, indicating a shift towards utilizing bridge protocols for money laundering purposes. Additionally, there was a substantial rise in funds sent from ransomware attacks to gambling platforms and bridges, showcasing the “adaptability and resourcefulness” of cybercriminals.

North Korean Hackers And Cross-Chain Bridges

The concentration of money laundering at fiat off-ramps, where criminals convert their crypto into cash, remains a significant concern. While thousands of off-ramping services operate, most money laundering activity is concentrated in a few services. 

In 2023, 71.7% of illicit funds sent to off-ramping services went to just five services, a slight increase from 68.7% in 2022. The report also reveals an increase in deposit addresses receiving large sums of illicit cryptocurrency, indicating a more diversified approach by criminals to evade detection and mitigate the impact of frozen accounts.

Furthermore, the report highlights the changing tactics of “sophisticated” crypto criminals, particularly in the case of North Korean-affiliated hacking groups like Lazarus Group. 

According to Chainalysis, these actors have demonstrated an ability to adapt their money laundering strategies in response to law enforcement actions. The report cites the shutdown of mixer services, such as Sinbad, and the subsequent rise of replacements like YoMix, which has become a preferred mixer for North Korea-affiliated hackers.

Moreover, cross-chain bridges have seen substantial growth in money laundering activities, with illicit actors leveraging these protocols to move funds between blockchains. North Korean hackers, in particular, have been prominent users of bridge protocols for money laundering purposes. 

Ultimately, the report emphasizes the need for increased diligence and understanding of “interconnectedness” in fighting crypto crime by targeting money laundering infrastructure. 

Crypto

Featured image from Shutterstock, chart from TradingView.com

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Pastor Accused Of Defrauding Congregation With $3 Million Crypto Ponzi Scheme

Denver-based internet pastor, Eli Regalado, is at the center of a controversy surrounding an alleged crypto Ponzi scheme involving INDX coin. 

The self-proclaimed spiritual leader has come under scrutiny as Colorado’s securities regulator investigates his deceptive practices, which reportedly resulted in over $3 million in ill-gotten gains. Fortune magazine report shed light on the matter, exposing Regalado’s questionable actions and shedding light on the plight of the victims involved.

Pastor Regalado’s Deceptive Crypto Venture

According to Colorado’s securities regulator, Regalado, and his wife orchestrated a “small-scale swindle”, targeting hundreds of individuals with promises of extraordinary returns on their investments in INDX coin. 

Presenting his appeals with biblical undertones, using terms like “sowing” and “tithing,” Regalado convinced his online church followers that purchasing the cryptocurrency would yield a tenfold increase in their investments. 

However, the promised returns never materialized, and investors lost their “hard-earned” money. To compound matters, it is alleged that the Regalados diverted a significant portion of the funds to finance personal expenses, including home renovations and luxury purchases, further exacerbating the victims’ financial losses.

Despite the allegations and mounting legal troubles, Regalado chose to address the accusations head-on by posting a 10-minute video on the crypto project’s website.

In the video, he attempts to deflect responsibility, claiming that misappropriating funds was not solely his decision, but rather a result of divine guidance for a home remodeling project. 

Displaying a lack of understanding of financial concepts, Regalado haphazardly employs buzzwords like “leverage” and “liquidity” without demonstrating a clear comprehension of their meaning. 

Furthermore, Regalado boasts about the supposed success of the project, mentioning “$300 million of coins sown before the exchange went live.” However, the Colorado regulator clarifies that these coins have no value, primarily because they could only be traded on the Kingdom Wealth Exchange, an ill-functioning service operated by the Regalados themselves.

Colorado Authorities Take Action To Recover Funds

According to Fortune, the next steps in this ongoing investigation are expected to involve the state of Colorado seizing any remaining funds and returning them to the defrauded investors. 

Meanwhile, Regalado’s video attempts to invoke divine intervention, predicting that the INDX coin debacle will resolve itself miraculously through divine intervention in the financial sector.

Crypto

According to CoinGecko data, the total crypto market cap has declined over 4.6%, reaching as low as $1.51 trillion on Monday.  However, when compared to one year ago, the cryptocurrency market has witnessed an impressive surge of 55.27%. 

At the forefront of the cryptocurrency market stands Bitcoin (BTC), the pioneering digital currency that continues to dominate the landscape. As of today, Bitcoin’s market cap stands at an impressive $795 billion, accounting for a substantial 47.66% of the total cryptocurrency market. 

Featured image from Shutterstock, chart from TradingView.com

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Crypto Fraud Unveiled: $1.3B Loss As Chuck Norris-Endorsed CEO Turns Out To Be Illusion

In a recent investigation by The Guardian, alarming details have emerged regarding a crypto project, HyperVerse, that allegedly lost $1.3 billion of investors’ funds. 

The report reveals that the chief executive officer promoted by the project, supposedly backed by celebrity endorsements including Chuck Norris, appears to be absent.

Investigation Exposes HyperVerse Crypto Scam

HyperVerse, promoted by Australian entrepreneur Sam Lee and his business partner Ryan Xu, founders of the now-collapsed Australian Bitcoin (BTC) company Blockchain Global, has been scrutinized for its deceptive practices. The project attracted thousands of investors, who ultimately lost millions of dollars.

The investigation raises concerns about the legitimacy of HyperVerse’s CEO, as the qualifications and credentials attributed to the supposed chief executive, Steven Reece Lewis, have no basis. 

Promotional material released for HyperVerse claimed that Lewis graduated from the University of Leeds and held a master’s degree from the University of Cambridge. However, neither institution has any record of his existence.

Furthermore, there are no records of Lewis on the UK companies register, Companies House, or the US Securities and Exchange Commission (SEC). Interestingly, Adobe, a publicly listed company, also has no record of any acquisition involving a company owned by “Steven Reece Lewis.”

The report indicates that HyperVerse managed to secure celebrity endorsements, including video messages of support from Steve Wozniak, co-founder of Apple, and actor Chuck Norris. 

However, it is unclear how these messages were obtained, as all four celebrities mentioned in the report are available for hire through Cameo, where individuals can pay to have high-profile individuals read scripted messages.

Australian Authorities Under Fire

The investigation also highlights regulatory concerns, as HyperVerse operated without significant scrutiny in Australia despite being flagged by regulators overseas as a possible scam or suspected pyramid scheme. 

The Australian Securities and Investments Commission (ASIC) has been referred to the case but has not yet taken action.

Investors in HyperVerse were lured with promises of substantial returns and the opportunity to explore a new digital metaverse similar to Facebook. However, the scheme ultimately resulted in significant losses for investors, estimated at $1.3 billion in 2022, according to blockchain analysts Chainalysis.

The Guardian’s findings shed light on the deceptive practices employed by HyperVerse and raise questions about the responsibilities of regulators in overseeing such projects. 

As the aftermath of this cryptocurrency scandal unfolds, investors and authorities alike are left grappling with the consequences of a scheme that capitalized on false claims and celebrity endorsements to defraud unsuspecting individuals.

Crypto

Featured image from Shutterstock, chart from TradingView.com 

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GROK Memecoin Faces 40% Drop As Expert Exposes Scammer’s Involvement

Grok (GROK) token, inspired by Elon Musk’s artificial intelligence service through X (formerly Twitter), has recently come under scrutiny following explosive growth in market capitalization. 

According to recent reports, Grok zoomed to a staggering $160 million market cap within just eight days of its release. However, reports of alleged scam involvement have overshadowed the token’s rapid ascent.

GROK Meteoric Rise Marred By Scammer Accusations

Grok token prices have soared, doubling within the past 24 hours alone, extending a week-long rally that has seen an astonishing 13,000% increase. The token boasts an impressive 11,000 holders and has witnessed a trading volume of over $60 million over the past 24 hours, according to data from DEXTools.

GROK

However, ZachXBT, a self-proclaimed crypto detective, has raised concerns about the legitimacy of Grok, stating that the token was created by a scammer. ZachXBT has stated that the same X/Twitter account associated with Grok has been linked to at least one other fraudulent scheme. ZachXBT stated:

Not that people in this space will care but GROKERC20 GROK was created by a scammer. Same exact X/Twitter account has been reused for at least one other scam. X/Twitter ID: 1690060301465714692

Satoshi Flipper, another prominent crypto trader on X, echoed this sentiment, labeling Grok as an “effing scam” and emphasizing that Elon Musk did not authorize the token’s launch. Satoshi Flipper said:

This is Grok. $1.9M liquidity and a $137M market cap? What an effing scam. Not only that, it’s completely fraudulent to trade this knowing Elon Musk, the owner of Grok, did not authorize these devs to launch a token. Imagine touching this toxic trash.

Experts from Arkham Intelligence also weighed in, reporting that an on-chain trader sold a significant amount of GROK at nearly 40% slippage, reinforcing the scam allegations made by ZachXBT.

The controversy surrounding Grok has raised concerns within the cryptocurrency community. Critics argue that the token’s market cap, coupled with the lack of authorization from Elon Musk, raises red flags. 

Impressive Turnaround

The token’s market cap has undergone a retracement, now at $108 million, down from its previous value of $160 million. Additionally, the token exhibits a liquidity of $1.83 million. 

GROK

Despite experiencing a substantial slippage of 48%, with its price dropping as low as $0.0056000, the token has remarkably recuperated and is now trading at $0.0108452.

It is yet to be determined whether further reports will surface to shed light on the individuals behind the token’s creation and their objectives, potentially exposing the risk of a rug pull within the cryptocurrency industry. 

However, despite these allegations, the token has attracted significant attention and excitement from investors eager to participate in the potential surge of the next major meme coin, aiming to achieve substantial gains in their investments. As of the time of writing, the Grok official account on X has not made any statements regarding these allegations.

Featured image from Shutterstock, chart from TradingView.com 

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Ep02- BTC Killer – Companion Guide For BBC’s “The Missing Cryptoqueen” Podcast

Let’s listen to “The Missing Cryptoqueen” podcast together from the very beginning, as the new episodes arrive. This second one presents new facets of Dr. Ruja’s story and amplifies the scope of the podcast. Good news, “The Missing Cryptoqueen” might be even more interesting than we previously believed. As BBC presenter Jamie Bartlett puts it, “we thought we were looking for a missing billionaire, but now we seem to be entering a world that’s far murkier than we thought.”

NewsBTC’s “The Missing Cryptoqueen’s” listening group is now in session. In the first few minutes of this episode, Dr. Ruja Ignatova says: “In two years, nobody will talk about bitcoin anymore.” A line out of the book of every crypto scammer out there.

Remember, you can download episodes directly from the BBC, or listen to “The Missing Cryptoqueen” through Apple, Spotify, or iVoox.

About “The Missing Cryptoqueen ’s” Episode Two, “The Bitcoin Killer”

This podcast moves fast. It’s only “The Missing Cryptoqueen ’s” second episode and the whole OneCoin fiasco is already breaking apart. The producer and the presenter move between telling the story of what happened and the actual search for Dr. Ruja. The team went to Bulgaria and asked around about the controversial character. Every time they mentioned her, Bulgarians started to speak loudly among themselves. 

They are going to places that she frequented, sure, but everyone seems to know about Ruja Ignatova.

In any case, “The Missing Cryptoqueen’s” audience is not exactly a cryptocurrency-savvy one. The episode starts with a terrible definition of what money is, and a shaky explanation of how blockchain technology works. It’s necessary, because we will soon find out that OneCoin didn’t even run on a blockchain. This was a scam through and through from the very beginning. 

The podcast/ radio documentary also serves as a living and breathing explanation of how a Ponzi scheme works. And the story’s protagonists tell you exactly what happened in their own words. One of the victims, Jane; a developer turned OneCoin whistleblower; and OneCoin denouncer Timothy Curry are the guests in “The Missing Cryptoqueen’s” second episode.

In the episode’s fourth quarter, the team goes to the marina where the boat Dr. Ruja’s disappeared from was located. The Bulgarians there mention the mafia. And the developer turned whistleblower also alludes to it.

BTC price chart for 10/06/2022 on Bitstamp | Source: BTC/USD on TradingView.com
An Almost-Always-Present Characteristic Of A Scam Or Ponzi

Besides the lack of a blockchain, “The Missing Cryptoqueen” points out an almost-always-present characteristic of a scam or Ponzi: 

  • People couldn’t withdraw or spend the tokens they bought.

In this case, OneCoin only lived in a SQL Database in Bulgaria. The naive investors saw the price pumping and believed they were making a killing, but their tokens were just numbers on a screen. They couldn’t exchange them for other cryptocurrencies because OneCoin was not a cryptocurrency. It didn’t run on a blockchain.

At the time, the team reached out to OneCoin with these allegations and they denied everything and blamed the authorities and regulations for their token’s lack of usability. Classic scammers.  

Quotes From “The Missing Cryptoqueen ’s” Episode Two – “The Bitcoin Killer”

  • “The €10,000 that Jen invested which she thought was now worth over €100,000 in one coin was just a number that someone in an office in Bulgaria had made up and could delete just as easily. OneCoin is not a real cryptocurrency, it’s just pretending to be one. It’s fake, it’s a scam, and it could be the scam of the century.”
  • “OneCoin was only possible because of Dr. Ruja. Whenever we see complicated technology that we don’t understand, we make a judgment about it based on things we do understand. Like the fact that the boss was an inspirational, successful businesswoman. Dr. Ruja’s magic trick was to use the hype and terminology of legitimate cryptocurrencies. So ordinary people like Jen couldn’t tell the difference between the real and the fake.”

Extra Material And Episode Credits

This week’s extra material comes courtesy of Investopedia, which summarizes “The Missing Cryptoqueen ’s” plot as:

“OneCoin was a cryptocurrency-based Ponzi scheme. The companies behind the scheme were OneCoin Ltd. and OneLife Network Ltd., founded by Bulgarian national Ruja Ignatova, who disappeared in 2017. However, not before the scheme raised $4 billion.”

And finally, the episode’s credits:

Presenter: Jamie Bartlett
Producer: Georgia Catt
Story consultant: Chris Berube
Editor: Philip Sellars
Original music and sound design: Phil Channell
Original music and vocals: Dessislava Stefanova and the London Bulgarian Choir

Previous Companion Guides For BBC’s “The Missing Cryptoqueen” Podcast:

  1. Ep. 01 – https://www.newsbtc.com/news/bitcoin/ep01-dr-ruja-companion-guide-for-bbcs-the-missing-cryptoqueen-podcast/

Featured Image: The Missing Cryptoqueen podcast logo from the BBC | Charts by TradingView