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Scam
Bitcoins BitConnect Crypto Exchange Cryptocurrency Frauds Cyber Fraud Fraud Schemes Scam

$57 Million in Seized Cryptocurrency Being Sold for Victims of BitConnect Scam

 

US law enforcement authorities will begin liquidating around $57 million in cryptocurrency confiscated from the now-defunct BitConnect crypto exchange. 

The amount is insignificant in comparison to the $2 billion that BitConnect executives defrauded from American and foreign investors over the course of the company's two years of presence. Nonetheless, the US Department of Justice considers this liquidation to be "the largest single recovery of cryptocurrency for victims to date" and the first step in assisting BitConnect victims regain some of their losses. 

BitConnect, an open-source cryptocurrency exchange with its own token, the BitConnect Coin, was founded in 2016. (BCC). The platform, which offers a high-yield investment programme (up to 1% per day), swiftly gained traction, with the token's value hitting the 'top 20' by the summer of 2017. 

Soon, clouds gathered above BitConnect as regulators accused it of being a Ponzi scheme, a charge the company frequently denied. After several probes, the platform was eventually shut down in January 2018, BCC's price collapsed, and a restraining order was filed to freeze all of the company's assets. 

During the subsequent investigations, it was found that one of the top executives was actively involved in money laundering as well as a second fraud known as 'Regal Coin.' On September 1, 2021, the company's founder, Glen Arcaro, pleaded guilty to the criminal allegations brought by the US Department of Justice. 
 
Arcaro agreed that he deceived investors about BitConnect's allegedly patented technology, which promised investors a profit. Early BitConnect investors were compensated with money from later BitConnect investors, as he admitted, a classic Ponzi scheme example (SEC complaint). 

Acting U.S. Attorney Randy S. Grossman of the Southern District of California stated, "Arcaro and his confidantes preyed on investor interest in cryptocurrency. As a result, a staggering number of individuals lost an enormous amount of money. To the investing public, let this also serve as a cautionary tale to safeguard your money and invest it wisely." 

The offender now faces up to twenty years in jail, $250,000 in penalties, forfeiture, and restitution, or double the gross gain or loss from the offence. Arcaro's sentence will be heard on January 7, 2022.
 
Victims of the BitConnect scam can identify themselves as possible victims by filling out this victim impact statement form. Victims can also willingly provide their information to the FBI to help with the investigation. 

It's suggested to keep an eye out for counterfeit wallet software, spoofed websites, and multiplier frauds while investing in cryptocurrency. Even if people find a platform that looks to be reliable, it’s recommended to not put all the money in one place. Rather, diversify the cryptocurrency and investment portfolio to reduce the danger of losing everything all at once.
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Spoofing
Cyber Fraud Data Privacy Fake Sites Financial Data Fraud Schemes Government Sites Spoofing

FBI: Fake Government Websites Used to Steal Private & Financial Data

 

The FBI has alerted the public in the United States that threat actors are proactively capturing sensitive financial and personal information from innocent victims via phoney and fraudulent unemployment benefit websites. 

Websites used in these assaults are built to seem just like official government platforms in order to deceive victims into giving over their information, infecting them with malware, and claiming unemployment benefits on their behalf. 

The federal law enforcement agency stated in a public service announcement published on Internet Crime Complaint Center's site, "These spoofed websites imitate the appearance of and can be easily mistaken for legitimate websites offering unemployment benefits. The fake websites prompt victims to enter sensitive personal and financial information. Cyber actors use this information to redirect unemployment benefits, harvest user credentials, collect personally identifiable information, and infect victim's devices with malware.” 

"In addition to a loss of benefits, victims of this activity can suffer a range of additional consequences, including ransomware infection and identity theft." 

As per the FBI, 385 domains were detected, with eight of them spoofing government sites related to official unemployment benefits platforms. Domain and status are listed below:
  • employ-nv[.]xyz:  Active 
  • employ-wiscon[.]xyz: Inactive 
  • gov2go[.]xyz : Active 
  • illiform-gov[.]xyz : Active 
  • mary-landgov[.]xyz : Active 
  • Marylandgov[.]xyz: Inactive 
  • newstate-nm[.]xyz:  Active 
  • Newstatenm[.]xyz: Inactive 
There is also a possibility that the data obtained through these fake sites will end up in the hands of identity fraudsters, who would use it in different benefit fraud schemes. The US Federal Trade Commission (FTC) reported in February 2021 that the overall number of identity theft reports doubled in 2020 compared to 2019, with 1.4 million reports in a single year. 

The FTC stated, "2020’s biggest surge in identity theft reports to the FTC related to the nationwide dip in employment. After the government expanded unemployment benefits to people left jobless by the pandemic, cybercriminals filed unemployment claims using other people’s personal information." 

For example, the FTC received 394,280 reports of government benefits fraud attempts last year, the majority of which were connected to unemployment benefit identity theft fraud, compared to 12,900 reported in 2019. 

The Internal Revenue Service (IRS) also issued taxpayer guidelines in January on recognizing theft activities involving unemployment payments. The US federal revenue service stated, "The Internal Revenue Service today urged taxpayers who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form." 

"Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS." 

The FBI also offered some advice on how to safeguard yourself against identity theft in the release and a few are listed below: 
  • To identify limitations, the spelling of web addresses should be verified. 
  • Check that the website you're visiting has an SSL certificate. 
  • Software upgrades are required; 
  • It is recommended that two-factor authentication be utilized. 
  • Avoid phishing emails at all costs.
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