Friday 13th: the latest in the crypto fraud world

Here’s the latest from the worlds of foreign exchange fraud and crypto fraud commentary as of Friday 13^th September.

Ex-HSBC currency trader loses conviction appeal

A man who was convicted of wire fraud in relation to a forex transaction while working for HSBC has had his appeal against his conviction denied.

Mark Johnson, who used to be the head of HSBC’s currency dealing unit, was found guilty by a New York court in 2017.

He was accused of “forex rigging” in a transaction involving Cairn Energy, a Scottish company.

The firm had hired HSBC to turn an asset sale’s proceeds from US dollar into pounds, and Johnson worked on the case.

He was found guilty of telling – or at least hinting to – colleagues that the market-moving transaction was about to be made, which meant that they themselves could then place trades which predicted the outcome.

This practice is known as “front-running”.

However, Johnson was found guilty of the practice in 2017, and was sentenced to two years in prison.

He was also fined, but he was told that he would be allowed to return back to the UK while the appeal case was held.

The most recent verdict throws into doubt whether or not he will need to leave his base in the UK and serve in the US.

In a statement, those who reached the conclusion said Johnson had been responsible for “misrepresentations”.

“We conclude that Johnson’s misrepresentations provided sufficient evidence for a reasonable jury to find beyond reasonable doubt that he intended to defraud Cairn”, the judges said.

In response to the news, Johnson’s lawyer Alexandra Shapiro – who is based in New York – described the ruling as making the legal team “extremely disappointed”.

“We are extremely disappointed with the result. Mark Johnson is innocent. We intend to keep fighting to ensure that justice prevails and will explore every legal avenue possible to clear his name”, she said.

Press outlets did not receive any comments from either HSBC, his former employer, or the US Department of Justice – which brought the case.

Researchers warn of QR code scams in crypto world

Researchers have revealed a significant crypto scam risk for those looking for QR code generators when trading bitcoin.

According to ZenGo, which provides crypto wallet services, 80% of the top results in Google when searching for the term “bitcoin qr generator” in fact take users to fake, fraudulent sites.

These sites can then trick the user into thinking that they have received a QR code for their own wallet’s destination – when in fact they could be transferring assets to someone else’s.

It is believed that around $20,000 in value has been lost to such scams.

In a blog post published by ZenGo, the researchers said the amount could be even higher.

“Summing up the balances of the scammy addresses we had observed, we found out about scams worth about $20K”, it said.

“We assume they are just the tip of the iceberg, as scammers probably change their addresses to avoid detection and blacklisting.”

Chris Lee

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