Cryptocurrencies and digital assets have continued to gain widespread acceptance from both retail and institutional investors. With this rapid growth in both the crypto and digital asset spaces, there has also been an unfortunate steady drumbeat of fraudulent activity. It has been reported that in 2021 alone over $14 billion in crypto was stolen from investors. Frauds have touched all aspects of the crypto universe ranging from outright Bitcoin theft, pig butchering, and wallet phising to DeFi rug pulls, exchange hacks, mining scams and NFT fraud. The Cryptocurrency and Digital Asset Fraud Casebook will provide up to date information and analysis on fraudulent activity in the crypto space.
Author(s): Jason Scharfman
Publisher: Palgrave Macmillan
Year: 2023
Language: English
Pages: 200
City: Cham
Preface
Contents
1 Introduction to Cryptocurrency and Digital Asset Fraud and Crime
Introduction to Cryptocurrency and Digital Assets
Introduction to Fraud
Understanding Fraud Theft Targets
Understanding Fraud Approaches
Understanding the Elements of Fraud
Distinguishing Criminal and Civil Fraud
Distinguishing Theft and Fraud
Motivations for Fraud
Comparing Crypto Fraud with Traditional Fraud
Crypto Fraud Statistics
Crypto Romance Scams
Pig Butchering Scams
Crypto Phishing Scams
Giveaway/Multiplier Scams
Celebrity and Corporate Impersonation
Social Media Hijacking
Goodwill Airdrop Fraud
Chapter Summary
Notes
2 Cryptocurrency Exchange Fraud and Hacks
Introduction to Cryptocurrency Exchanges
Hackers and Crypto Exchange Centralization
Introduction to Cryptocurrency Exchanges
Centralized Versus Decentralized Exchanges
Spot Trading
Case Studies in Cryptocurrency Exchange Fraud and Hacks
Coincheck Hot Wallet Hack
Tumblers
Coincheck Hack Aftermath
Decentralized Exchange Hacks
GMX
Kyber Network
Transit Swap
Ascendex
MM.Finance
Bitfinex
Crypto.Com
Cryptocurrency Exchange Hack Future Perspectives
Chapter Summary
Notes
3 Cryptocurrency Ponzi, Pyramid, and MLM Schemes: Part 1
Introduction to Cryptocurrency Ponzi Schemes
Introduction to Pyramid and MLM Schemes
Case Studies in Cryptocurrency Ponzi and Pyramid Schemes
Brazilian Cryptocurrency Scams
Brazil’s “Bitcoin King”
Brazil’s Bitcoin Pharaoh
International Drug Trafficking and Money Laundering
Operation Egypto
African Crypto Scams
Challenges to Bitcoin Adoption in Africa
CryptoShares (Zimbabwe)
Egyptian Crypto Ponzi Scams
OneCoin
Chapter Summary
Notes
4 Cryptocurrency Ponzi, Pyramid, and MLM Schemes: Part 2
Cryptocurrency Ponzi Schemes and Pyramid Schemes Continued
Turgut V
Profit Connect Wealth Services
Coinbase Former Employee
Background
The Insider Trading Scheme
ISHAN WAHI’s Attempt to Flee the United States
BitConnect
Chapter Summary
Notes
5 Non-Fungible Token (NFT) Fraud
Introduction to NFTs
Common NFT Fraud Typologies
Meme NFT Fraud
Case Studies in Cryptocurrency Ponzi Schemes
Beer with Bill Murray
Frosties and Embers
Baller Ape Club
Vulcan Forged
NFT Minting Fraud
Pranksy
Artist Impersonation
Meebits
Marble Cards
OpenSea NFT Insider Trading Case
Chapter Summary
Notes
6 Decentralized Finance (DeFi) Fraud and Hacks: Part 1
Introduction to DeFi
Binance Blockchain (BNB Bridge)
Meerkat Finance
BadgerDAO
Rari Capital/Fei Protocol
KuCoin
EasyFi/Nexus Mutual
Pickle Finance
Akropolis DeFi and Origin Dollar
The DAO Hack
Vee Finance
Value DeFi
Alpha Finance
PancakeBunny and PolyBunny
Cashio
Mirror Protocol
Harvest Finance
Mango Markets
Boy X Highspeed (BXH) Exchange
Chapter Summary
Notes
7 Decentralized Finance (DeFi) Fraud and Hacks: Part 2
Decentralized Finance Fraud and Hacks Continued
Nirvana Finance
Beanstalk
bZx (Fulcrum)
Compound Finance
Compounder Finance
Alchemix
Introduction to DeFi Bridge Hacks
Multichain (Formerly Anyswap)
Wormhole
Qubit Finance
BitMart
Axie Infinity’s Ronin Network
Harmony’s Horizon Bridge
Nomad Bridge
Poly Network
Cream Finance
Wintermute
Chapter Summary
Notes
8 Cryptocurrency Hedge Fund Scams and Anti-money Laundering Violations
Introduction to Crypto Hedge Funds
Anti-money Laundering Compliance
Virtual Asset Service Providers (VASPs)
Robinhood Crypto, LLC
Q3 Trading Club
EmpiresX
Virgil Sigma Fund LP/VQR
Background
Qin’s Scheme to Steal Assets from Virgil Sigma
Qin Attempts to Steal Assets From VQR to Pay Virgil Sigma Investors
Chapter Summary
Notes
9 Initial Coin Offerings (ICOs) and Celebrity Token Promotions: Part 1
Introduction to Initial Coin Offerings (ICOs) and Celebrity Promotion
SEC November 2017 ICO Cautionary Warning
T.I. and Flik
Steven Segal and Bitcoiin2Gen
Floyd Mayweather Jr. and DJ Khaled
Kim Kardashian and EthereumMax
Chapter Summary
Notes
10 Initial Coin Offerings (ICOs) and Celebrity Token Promotions: Part 2
Initial Coin Offerings (ICOs) and Celebrity Promotion Continued
The Hydrogen Technology Corporation and Hydro
Sparkster
Chapter Summary
Notes
11 Additional Case Studies in Cryptocurrency Fraud
Introduction
Titanium Blockchain Infrastructure Services
Barksdale Siblings and Ormeus Coin
Mercenary Gold
CryptoBay VIP and Other January 2022 Frauds
Outverse
Big Daddy Ape Club
Blockverse
VirSE
Chapter Summary
Notes
12 Trends and Future Developments
Introduction
Increased Regulatory Resources to Fight Crypto Fraud
Increasing Focus of Hackers on Crypto Related Espionage
Crypto Increasingly Used to Pay Spies
Jareh Sebastian Dalke
Jonathan and Diane Toebbe
North Korean Espionage
Fake Crypto Job Postings to Gather Intelligence
Helix and Coin Ninja—Crypto Mixer FinCEN Penalty
Tornado Cash and Crypto’s Relations to Sanctions
Chapter Summary
Notes
Index
