Cybercriminals target booming cryptocurrencies: report

UNTV News   •   February 2, 2018   •   3556

A projection of cyber code on a hooded man is pictured in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

NEW YORK (Reuters) – Bitcoin’s popularity and the emergence of about 1,500 other digital coins or tokens have drawn more hackers into the red-hot cryptocurrency space, expanding opportunities for crime and fraud, cybersecurity firm Digital Shadows warned in a report on Thursday.

“Cybercriminals follow the money and right now they see in the unregulated and largely unsecure world of digital currencies a huge opportunity to target people, businesses and exchanges and make money quickly and easily,” said Rick Holland, vice president of strategy at Digital Shadows.

Digital currencies have quickly grown into a more mainstream asset class over the last two years as corporations and financial institutions have expanded use of the underlying blockchain technology.

With weekly launches of new alternative coins, or “altcoins,” cybercriminals have developed several schemes to defraud cryptocurrency holders. “Crypto jacking”, account takeovers, mining fraud, and scams against initial coin offerings (ICOs) have all grown more common, the report said.

In crypto jacking, cybercriminals secretly take over another computer user’s browser and use it to fraudulently mine or create cryptocurrencies, according to Digital Shadows’ report. Miners use special software to solve math problems and are issued a certain number of bitcoins or cryptocurrenices in exchange.

Crypto Jacker software allows users to clone popular websites and initiate spam campaigns.

The cybersecurity company said criminals also perpetrate mining fraud using botnets, collections of internet-connected devices, which may include PCs, servers, and mobile devices that are infected and controlled by a common type of malware. Users are often unaware a botnet has infected their system.

Botnets were first used to mine bitcoin in 2014. The process was too complex to be financially viable, but botnets have made a comeback because newer cryptocurrencies like Monero are easier to “mine”, Digital Shadows said.

The company said botnets could be rented for $40. It said one such offering had “flown off the shelves” with almost 2,000 rentals so far.

Cybercriminals have also been drawn to the surging initial coin offering market, the report said. ICOs have raised roughly $5 billion for various startups and projects in 2017, according to data from Crunchbase. That is up exponentially from just $100 million in 2016.

Rather than selling scam tokens, criminals target legitimate currencies, either by stealing funds from ICOs or by manipulating prices through the type of “pump and dump” schemes often used with penny stocks and other less-liquid assets, the report said.

Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio

EXCLUSIVE: G20 financial heads to urge crypto-asset monitoring to safeguard financial stability

UNTV News   •   March 15, 2018

Cryptocurrencies are seen on a website that tracks the value of initial coin offerings (ICO) in this illustration photo taken September 5, 2017. REUTERS/Thomas White/Illustration

BRUSSELS (Reuters) – The world’s financial leaders will call on international standard-setting bodies on March 20 for stronger monitoring of crypto-assets and to assess the need for a multilateral response as such assets could at some point threaten financial stability.

The call appears in a draft communique prepared for the meeting of finance ministers and central bank governors of the world’s 20 biggest economies in Buenos Aires on March 19-20, seen by Reuters.

The financial leaders will say the technological innovation behind crypto-currencies has the potential to improve the efficiency and inclusiveness of the financial system.

“Crypto currencies, however, raise issues with respect to consumer and investor protection, tax evasion, money laundering and terrorist financing. At some point they could have financial stability implications,” the draft communique adds.

“We agree that international standard setting bodies strengthen their monitoring of crypto-assets and their risks… and assess whether multilateral responses may be needed.”

Regulators globally have raised the alarm over cryptocurrencies, saying they may aid money laundering and terrorist financing, hurt consumers and undermine trust in the global financial system.

Japan was the first country to adopt a national system to oversee cryptocurrency trading. It carried out checks on several exchanges this year after the theft of $530 million from one exchange, Coincheck Inc, in January.

France and Germany have said they will make joint proposals to regulate the bitcoin cryptocurrency market.

The head of the European Union’s watchdog said a short-term strategy could be to focus on applying anti-money laundering and terrorist financing rules, warning consumers of the risk of trading in cryptocurrencies and preventing banks from holding them.

The U.S. Securities and Exchange Commission said last week that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector.

In a statement, the SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labeling themselves as “exchanges.” The regulator said these platforms need to register with the SEC as a regulated national securities exchange or as an alternate trading system, or ATS.

Virtual currencies have existed for years but speculation in them has recently ballooned – along with scams promising investors returns of over 1,000 percent in weeks.

In a time of volatile markets, hackers are also active in the sector.

Bitcoin, the best known virtual currency, lost over half its value earlier this year after surging more than 1,300 percent last year.

Reporting By Jan Strupczewski; Editing by Hugh Lawson

Singapore explores rules to protect investors in cryptocurrencies

UNTV News   •   March 2, 2018

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration

SINGAPORE (Reuters) – Singapore’s central bank is assessing whether additional regulations are required to protect investors in cryptocurrencies, an official said in a speech released on Thursday.

The city-state – which is aiming to be a hub for financial technology and so-called initial coin offerings in Asia – does not regulate virtual currencies and last year called for the public to exercise“extreme caution” over investment in cryptocurrencies.

Its central bank does regulate activities involving virtual currencies if they pose specific risks. For example, it imposes anti-money laundering requirements on intermediaries providing virtual currency services.

“We are assessing if additional regulations are required for investor protection,” Ong Chong Tee, deputy managing director (Financial Supervision), Monetary Authority of Singapore said.

Other countries such as South Korea, where trading in cryptocurrencies is more popular, are looking at ways to regulate that activity.

Reporting by Aradhana Aravindan and John Geddie; Editing by Kim Coghill

Cryptocurrency traders to launch lawsuit against Coincheck on Thursday – lawyer

UNTV News   •   February 14, 2018

Cryptocurrency exchange Coincheck’s signboard is pictured in front of a building where their office is located in Tokyo, Japan February 2, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – A group of cryptocurrency traders will file a lawsuit against Coincheck Inc on Thursday over last month’s theft of $530 million (£382 million) in digital money from the Tokyo-based exchange, a lawyer representing the claimants said.

The ten traders will file the claim at the Tokyo District Court over Coincheck’s freezing of cryptocurrency withdrawals, Hiromu Mochizuki, a lawyer representing the plaintiffs, told Reuters.

The traders will request that Coincheck allows them to withdraw cryptocurrencies to “wallets” – folders used for storing digital money – outside the exchange, Mochizuki said. The group may launch a second lawsuit at the end of the month to claim for damages over the heist, he added.

Coincheck representatives did not immediately respond to phone and emailed requests for comment.

The Coincheck incident highlighted the risks in trading an asset that policymakers are struggling to regulate, and has renewed the focus on Japan’s framework for overseeing these exchanges.

The Tokyo-based exchange, which froze all withdrawals of yen and digital currencies following the theft, resumed yen-withdrawals from Tuesday, according to posts on Twitter.

Coincheck said on Friday it would allow customers to withdraw yen after confirming the integrity of its system security. It added it would keep restrictions on cryptocurrency withdrawals until it could guarantee the secure resumption of its operations.

Coincheck is set to file on Tuesday a report with regulators on the heist, the safety of its systems, and measures it will take to prevent a repeat.

Reporting by Thomas WilsonEditing by Shri Navaratnam

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