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The Rise Of Blockchain Forensics Firms

Blockchain Forensics

Due to the anonymity that virtual currencies offer, a market has emerged for forensic services that uncover who is using these digital coins. One of the companies offering this kind of blockchain forensics service is Chainanalysis, which was co-founded by Jonathan Levin, the current chief operating officer of the company. Initially Chainanalysis would monitor cryptocurrency […]

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Blockchain Forensics

Due to the anonymity that virtual currencies offer, a market has emerged for forensic services that uncover who is using these digital coins. One of the companies offering this kind of blockchain forensics service is Chainanalysis, which was co-founded by Jonathan Levin, the current chief operating officer of the company.

Initially Chainanalysis would monitor cryptocurrency transactions at the behest of the United States government investigators on the hunt for money launderers, fraudsters and other shadowy types. Now the blockchain forensics firm has expanded its client base and counts financial institutions as its customers.

Series A fundraising round

Recently Chainanalysis announced that it had raised approximately $16 million in a Series A round which was led by Benchmark, a venture capital firm that was an early investor in the likes of Uber and eBay and which has been following digital currencies since 2014. Four years ago Benchmark made an investment in Xapo, a Bitcoin storage startup. Benchmark also participated in co-launching a Bitcoin investment fund.

In its early years the Chainanalysis software was a reactive program which was largely reliant on human beings to make the connections between the various Bitcoin accounts. This could then be used to follow the money in a bid to uncover criminals who were making the digital currency transactions. However progress has been made and now it is mostly automated and can make decisions regarding the risk that individual Bitcoin accounts pose by analyzing their history of transactions. This way businesses which are dealing in digital coins are in a position of telling that the users they are transacting with are legitimate or are crooks or money launderers.

Know Your Transaction

One of the new features of Chainanalysis is a Know Your Transaction product and it is used in screening suspicious activity in digital wallets in real-time. Thus someone who is receiving funds can decide on the fly whether to accept to process or decline to process the transaction in real-time.

The software that Chainanalysis has developed has been used by major law enforcement agencies across the globe. This includes the Dutch police who disclosed last month that they used the software of the blockchain forensics firm to track down Hansa, one of the largest dark web narcotics marketplaces in the world. Chainanalysis? software was also instrumental in assisting Mt. Gox?s creditors track down coins numbering 650,000 which went missing in 2014.

Other blockchain forensics companies

Besides Chainanalysis there are other blockchain forensics and monitoring firms and they are promising to guarantee trust in virtual currencies such as Bitcoin (BTC) by monitoring the various blockchain networks that exist.

Chainanalysis? biggest rival is Elliptic which raised approximately $5 million two years ago in a Series A round. Last year Elliptic also raised another round but did not disclose how much was netted. Among the participants in that round were SignalFire, a venture capital firm based in San Francisco, California.

Due to an anticipated demand for its services from law enforcement agencies such as the Drugs Enforcement Agency and the FBI, Elliptic intends to increase the number of its employees from 25 to 50 this year.

Dippli is an independent media outlet that covers the current events in the crypto space. Got breaking news or a story to share? Then feel free to contact us at news@dippli.com.

The post The Rise Of Blockchain Forensics Firms appeared first on dippli.

Source: https://dippli.com/2018/05/18/the-rise-of-blockchain-forensics-firms/

Blockchain

Members of WallStreetBets Forum Alleged in Telegram Crypto Scam Stealing $2M in BNB and ETH

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Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.

The Core of the Hoax

Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.

The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.

The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.

However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.


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The Aftermath

After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.

Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.

Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:

”Buying Lambo now.”

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Source: https://cryptopotato.com/members-of-wallstreetbets-forum-alleged-in-telegram-crypto-scam-stealing-2m-in-bnb-and-eth/

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South Korean Crypto Exchange Accused Of $1.5 Billion Scam

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The South Korean cryptocurrency exchange platform V Global was accused of luring 40,000 people into illicit multi-level deceit. The entire scheme amounts to more than 1.7 million won, which equals $1.5 billion.

The Investigation

As reported by the Korean officials, the police raided many places in the country related to a virtual cryptocurrency exchange, and its notorious CEO – known as LEE – alleged to fundraising without regulatory permission. The authorities blocked the exchange’s cash deposits as a part of the investigation.

In total, the Gyeonggy Nambu Police Agency reported that it searched the exchange’s headquarters in southern Seoul along with 21 other places and froze more than $214 million left in the account.

Another report from today shed more light on the developments. According to Yonhap News, the name of the organization is V Global. The Korean police are examining the accusations against them for fraud under the Certain Economic Crimes Weighted Penalty Act, the Similar Receiving Act, and the door-to-door sales business.

The main accusation against the exchange is gaining a deposit of 1.7 trillion won ($1.5 billion) from 40,000 members in the period between August 2020 and January 2021. The announcement revealed that most of the people were elderly or housewives with no experience in cryptocurrency trading.


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Too Good To Be True

The investigation revealed that the exchange urged investors to entrust their funds to an account and lured the members that the expected return would be three times higher than the initial investment. According to the authorities, there was a pyramid element in the scam as the exchange promised to grant an introduction fee of 1.2 million won ($1,065) for every newly recruited member.

The report affirmed that the trading venue paid some members in the form of a block. Therefore, people who signed up earlier received funds from individuals who entered the exchange later.

Moreover, the Korean police seem confident to deal with the fraud case as it revealed its intention to confiscate 240 billion won ($214 million) left in the V Global account as of the 15th last month, even before the prosecution process.

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Source: https://cryptopotato.com/south-korean-crypto-exchange-accused-of-1-5-billion-scam/

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Blockchain

Georgia’s central bank is exploring ‘Digital Gel’ CBDC

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The National Bank of Georgia said that it is considering launching a central bank digital currency.

In an announcement today, the central bank hinted at the issuance of a central bank digital currency, or CBDC, in an effort “to enhance efficiencies of the domestic payment system and financial inclusion.” The National Bank of Georgia, or NBG, said it would be inviting fintech firms and other financial institutions to participate in the project, named Digital Gel after the symbol for the country’s fiat currency, the lari.

“CBDC holds the promise to unlock the tremendous value of innovative business models for the benefit of society,” said the announcement. “The introduction of CBDC could increase financial intermediation efficiency, help introduce new financial technologies, facilitate financial inclusion, and reach previously unbanked populations.”

However, the bank mentioned the possibility of risks in the launch of a CBDC in the Republic of Georgia given the “new and potentially disruptive technology.” The NBG said it may conduct extensive testing of the CBDC in a controlled environment to ensure a smooth rollout, but did not provide any details regarding a timeline for launch.

With a population of roughly 4 million and a gross domestic product of approximately $15 billion, a nation like Georgia falls at the smaller end of countries exploring CBDCs. The Bahamas officially rolled out its Sand Dollar central bank digital currency in October, while China has been piloting its digital yuan in select cities prior to a full-scale launch. In the United States, Fortune 500 company Accenture announced this week it would be partnering with the Digital Dollar Foundation to conduct CBDC trials.

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Source: https://cointelegraph.com/news/georgia-s-central-bank-is-exploring-digital-gel-cbdc

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