Daily fraud update: 28th February

Chris Lee


Hello and welcome to your daily foreign exchange and cryptocurrency fraud news update.

Report: crypto and “threat finance” issues are rising in Latin America

Issues around so-called “threat finance” in Latin America have been linked to cryptocurrencies in a major report.

The findings were published in a report from the research firm Ciphertrace and focused in particular on the region.

It is believed that Latin America is in some ways a hotspot when it comes to the overlap between terror, threats and finance.

This is in part because of the absence of state-run “advanced persistent threat” (APT) groups.

These groups, which often exist in developed regions such as Europe, are essentially state-sponsored spying institutions.

Instead, problems of this kind in this region often come from individuals instead – which can in some cases make such hacks harder to track and monitor.

This is coupled with the fact that not many Latin American markets are regulated.

In fact, lots of them do not have sufficient anti money laundering or “know your customer” regulations in place.

According to the report, cybercriminals who use cryptocurrencies are often doing so for money laundering purposes.

“Threat finance is evolving in Latin America as organized crime groups turn to cryptocurrency to launder large amounts of money and dive into the dark web to find hackers for hire”, the report said.

“…criminals are taking advantage of unregulated exchanges that do not require registration information and proof of identification for tracking purposes.

“These illegal exchanges are appealing to criminal groups that are looking to move large amounts of money through untracked channels”, it added.

The report also went on to discuss the similarities between this approach and the “bitcoin mixing” approach, which is a privacy tool that has been in the news recently.

A bitcoin mixer is a tool offered to crypto traders in order to bring together, or “mix”, their bitcoins with other coins.

It can sometimes be used for fraud purposes.

“The method used here is similar to mixers, where the actor will deposit Bitcoin into the exchange account and trade it for various Altcoins”, the report explained.

“Each time a trade is made, it further distances that original payment from its source account”, it added.

So-called “Crypto King” pleads not guilty over fraud accusations

A man who was known as the “Crypto King” has pleaded not guilty over fraud claims.

John Michael Caruso, who sometimes spelled his nickname “KRYP+0 K!ng”, was arraigned at the Arizona District Court earlier this week.

He entered a plea of not guilty.

Caruso, who is from Scottsdale in Arizona, was arrested last month along with his alleged accomplice Zachary Salter, who is from Paradise Valley in the same state.

Caruso was charged with conspiracy to commit wire fraud and money laundering.

The pair allegedly ran a firm called Zima Digital Assets, which took in over $9m from their alleged victims.

However, they are accused of not using it to purchase crypto assets as they had promised.

Chris Lee

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