On Sept. 20, 2018, various news outlets reported that Zaif, a licensed Japanese cryptocurrency exchange, had been hacked, with cyber-thieves stealing approximately $60 million of bitcoin, bitcoin cash and MonaCoin. This news came amid reports that in the first six months of 2018, hackers stole a total of approximately $540 million worth of cryptocurrency from Japanese exchanges and individual wallets. Additionally, according to a recently issued report by the Cyber Threat Alliance, thus far in 2018 there has been an "enormous increase" in illicit cryptocurrency mining activity, with "a 459 percent increase in illicit cryptocurrency mining malware detections since 2017." And earlier this week, it was reported that a hacker stole approximately $24,250 by manipulating smart contracts run by a betting company that operated on the EOS blockchain.
In enforcement actions, the U.S. District Court for the Eastern District of California ruled in favor of the government to seize the late operator of AlphaBay's assets, which included a Lamborghini, bitcoin and several beachfront vacation resorts. Also, the founder of cryptocurrency mining companies GAW Miners and ZenMiner was sentenced to 21 months in prison after pleading guilty to charges of wire fraud brought by the U.S. Attorney for the District of Connecticut. And the Texas Securities Commission entered emergency cease and desist orders against three cryptocurrency schemes. One of the targets was a cryptocurrency investment promotor based in Russia that was targeting Texas residents by masquerading as an established U.S. platform. Another offered investors both shares of the company and units of its token in order to fund what the company claimed to be an unhackable cryptocurrency wallet for anonymous, untraceable transactions. Per the order, such investments are securities regulated by Texas law. The company is based in Belize.
In other recent news, the FinCEN Improvement Act (H.R. 6411) recently passed in the House. The bill proposes new language to FinCEN's authorizing statute that requires the regulator to work with international financial intelligence bodies and tribal law enforcement groups on cryptocurrency matters. While some see the bill as superfluous, reasoning that there was no question as to FinCEN's authority, it nevertheless underscores FinCEN's role in regulating virtual currencies and the importance of enforcement coordination worldwide.
To read more about the topics covered in this week's post, please see the following:
- Crypto Exchange Zaif Hacked In $60 Million, 6,000 Bitcoin Theft
- Japan Lost $540 Million to Crypto Hacks in First Half of 2018
- Cryptocurrency thefts triple; 60 billion yen stolen in 1st 6 months
- Japanese Cryptocurrency Exchange Hacked, $59 Million in Losses Reported
- THEY'RE DRINKING YOUR MILKSHAKE: CTA'S JOINT ANALYSIS ON ILLICIT CRYPTOCURRENCY MINING
- Blockchain hustler beats the house with smart contract hack
- US Court Seizes Lambo, Crypto Millions from Dead Dark Web Kingpin
- Garza gets 21-month sentence for bitcoin scheme
- Russian Promoters, Offshore Crypto Bank Targeted in Orders
- House Passes Bill to Update Money Laundering Crypto Enforcement
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