ARTICLE
2 July 2019

Details Emerge On QuadrigaCX Fraud And Recent Cryptocurrency Exchange Hacks

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BakerHostetler

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Recognized as one of the top firms for client service, BakerHostetler is a leading national law firm that helps clients around the world address their most complex and critical business and regulatory issues. With five core national practice groups — Business, Labor and Employment, Intellectual Property, Litigation, and Tax — the firm has more than 970 lawyers located in 14 offices coast to coast. BakerHostetler is widely regarded as having one of the country’s top 10 tax practices, a nationally recognized litigation practice, an award-winning data privacy practice and an industry-leading business practice. The firm is also recognized internationally for its groundbreaking work recovering more than $13 billion in the Madoff Recovery Initiative, representing the SIPA Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC. Visit bakerlaw.com
According to a recent report from a global professional services firm, Canadian cryptocurrency exchange QuadrigaCX's late founder/CEO transferred roughly $200 million USD in cryptocurrency out of customer accounts...
United States Technology

According to a recent report from a global professional services firm, Canadian cryptocurrency exchange QuadrigaCX's late founder/CEO transferred roughly $200 million USD in cryptocurrency out of customer accounts and into his personal accounts on competitor exchanges. The funds were reportedly used to furnish the late founder's luxury travel, real estate investments and trading habits. The late founder also allegedly created fake accounts on QuadrigaCX, credited them with nonexistent fiat amounts and used the nonexistent fiat to purchase actual cryptocurrency from customers. The report also detailed QuadrigaCX's deficient accounting practices and failure to maintain a contingency plan for the loss of funds or its founder. The global professional services firm serves as the court-appointed monitor and trustee for QuadrigaCX's bankruptcy estate, which consists of roughly $24.5 million assets to cover $190 million in liabilities. Both the FBI and Canadian authorities are looking into QuadrigaCX's losses.

Earlier this week, a report identified the "Mokes" and "Netwire" viruses as responsible for Coincheck's industry record-breaking hack involving $534 million worth of NEM. Initial reports alleged that the hack was orchestrated by North Korean attackers. Both viruses enable hackers to operate infected PCs remotely – Morks first emerged on a Russian forum in June 2011, while Netwire emerged roughly 12 years ago and is well known to cybersecurity investigators.

Late last week, Coinfirm reported movement of $6 million USD worth of cryptocurrency funds stolen from Binance in May. According to Binance, the stolen funds constitute roughly 2% of total BTC holdings on the exchange. Coinfirm also noted that the cryptocurrency funds exhibit a pattern of "hops" and "shedding" that may indicate efforts to launder the funds. Also last week, defense experts discovered a new potential threat from the Outlaw Hacking Group. The hacking group's malware consists of a Perl-based backdoor component that allows cybercriminals to launch distributed denial-of-service (DDoS) attacks and ultimately monetize their malware through mining cryptocurrency and offering DDoS-for-hire services. Users are advised to close unused ports and to secure ports that are regularly open for system administrators' support.

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