As The Crypto Market Turns, Scammers Are Gathering | PaymentsSource – Tech Tribune France

The warning sounded like a siren, with a massive attack targeting users of the Binance cryptocurrency exchange.

“There is a massive phishing scam via SMS targeting,” Binance alerted. “This leads to a phishing website to harvest your credentials… NEVER click on links in text messages!”

The scam, which tricks users into canceling withdrawals via an SMS (short message service) and then directs them to a malicious website, is not a one-time event but part of a growing wave of cryptocrime. The attacks come as the cryptocurrency market experiences a selloff and scammers take advantage of less savvy consumers during the panic.


In this way, cryptocurrency crime becomes like any other type of payment crime, according to Binance.

“They target innocent users, or the elderly, or the general public at large,” said Tigran Gambaryan, vice president of global intelligence and investigations for Binance, one of the largest cryptocurrency exchanges in the world. world. “User education is really key.”

Gambaryan was previously a special agent with the Internal Revenue Service’s Cybercrimes Unit, where he focused on identity theft, terrorist financing and violations of the Bank Secrecy Act. He has also investigated several high-profile cryptocurrency cases, including the The Mount Gox hack.

Cryptocurrency hackers stole more than $1.2 billion in the first quarter of 2022, according to Yahoo finance, citing data from Unify, a cryptocurrency security company. That’s almost 800% more than in the first quarter of 2021, when hack losses totaled $154 million. And 2021 has been a bumper year for cryptocurrency fraud overall, counting hacks, thefts, rerouted payments, and other financial crimes.

Illicit cryptocurrency addresses received more than $14 billion in 2021, up from $7.8 billion in 2020, according to String analysis – although Chainalaysis points out that the 79% growth in fraudulent cryptocurrency transactions is blunted by the growth in overall transactions. There were nearly $16 trillion in cryptocurrency transactions in 2021, up more than 560% from 2020.

Cryptocurrency payments can be protected from market volatility by using stablecoins, which tie their valuation to traditional currency, although the recent crash of stablecoin Terra demonstrates that this system is not infallible. But even when stablecoins are successful in controlling volatility, they don’t protect merchants or consumers from payment fraud, Binance executives say.

“The issue of security is important no matter what the market does,” said Matt Price, who works security at Binance. Prior to joining Binance in September 2021, Price was also a Special Agent with the IRS Criminal Investigation Cyber ​​Crime Unit, where he investigated crimes designed to use cryptocurrency for illicit purposes.

Binance handled $7.7 billion in crypto exchange volume in 2021, and its Binance coin is the fifth most valuable coin by market capitalization behind Bitcoin, Ethereum, USD Tether, and Cardano. The Binance Pay app supports over 40 cryptocurrencies.

Gambaryna also joined Binance in 2021 as the crypto exchange bolstered audit and investigation capabilities.

According to Forrester Research, the risk of cryptocurrency fraud stems from digital asset transactions that rely on digital wallets that have code issues or other weaknesses. These flaws create openings for credential theft, keyloggers, and other modes of attack. Attackers used phishing to steal Bitcoin from the Electrum wallet network, for example, while MyEtherWallet users were also victimized, the research firm said.

According to Andras Cser, vice president and principal analyst at Forrester, emerging security risks for cryptocurrency transactions include poor blockchain implementation and external hacks that contribute to “endemic” fraud in crypto payments, adding that cryptocurrency regulatory ambiguity also contributes to increased fraud. risk as the use of digital assets grows.

“Anti-money laundering and compliance are extremely [early stage] with crypto payments and there is no governance for crypto payments,” Cser said.

Binance partners with third parties such as Chainanalysis to analyze transaction data on blockchains to detect potential fraud through activity on its platform.

This has led to warnings such as the massive phishing SMS scam, as well as alerts about criminal activity around new cryptocurrency-adjacent innovations such as non-fungible tokens. Non-Fungible Tokens or NFTs, which are a digital representation of art or other content, are gain popularity between payment companies for use as rewards currency or for Fund raising.

Binance research flagged potential NFT Fraud such as fake marketplaces, bogus tech support, counterfeit NFTs, or “rug pull” scams, in which a group of people post a collection of NFTs related to a larger event that never takes place, allowing crooks to keep the initial funds.

“We spend a large part of every day meeting with blockchain analytics companies and law enforcement, and when an attack hits Binance, we are able to freeze accounts and hopefully freeze accounts. help get those involved arrested,” Price said.

According to Gambaryna, the growing threat of cryptocurrency scams and transaction fraud is equal or perhaps greater than the risk of market volatility. “I’ve been through at least five of those downturns, where people said crypto is dead. The crypto is here, Pandora’s box has been opened”

As the market recovers and grows from each downturn, more and more fraud targets are emerging, as are other payments advancements that are attracting new adoption and more consumer attention. from scammers, Price said.

“When I started at the IRS in 2009, the big problem was prepaid debit card scams,” Price said of attacks that use stolen or compromised credentials to embezzle funds. “But as crypto is widely adopted, we are seeing these types of scams moving into crypto as well.”

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As The Crypto Market Turns, Scammers Are Gathering | PaymentsSource – Tech Tribune France

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