CBI and Liminal Collaborate for Digital Asset Security in India Amid Crypto Scams

Strategic Alliance for Digital Asset Security

India’s Central Bureau of Investigation (CBI) has engaged Liminal, a Singapore-based digital asset custodian, to manage and secure digital assets confiscated in criminal investigations. This strategic partnership emerges against the backdrop of a surge in cryptocurrency-related frauds in India, highlighting the growing concerns in this sector.

Rising Concerns Over Cryptocurrency Frauds

Recently, India has witnessed a spate of cryptocurrency scams, leading to significant financial losses and several arrests. Two of the most notable cases include a $300 million scam with 18 arrests and a $120 million fraud resulting in at least two arrests. These incidents underscore the increasing challenges in regulating the digital asset ecosystem and preventing its misuse for illicit activities.

Liminal’s Role in Enhancing Digital Asset Security

Liminal, under the leadership of Mahin Gupta, co-founder of ZebPay, an early player in India’s cryptocurrency exchange market, has stepped up to the challenge. The company, known for its robust security measures, raised $4.7 million in mid-2022 from prominent investors like Elevation Capital, Andreas Antonopoulos, Balaji Srinivasan, and Sandeep Nailwal. Liminal’s expertise in creating multi-signature and multi-party computation wallets positions it as a capable partner for the CBI in ensuring the security of seized digital assets.

Senior Vice President of Strategy and Business Operations at Liminal, Manan Vora, expressed pride in their collaboration with the CBI, stating, “We consider our partnership with the CBI as a testament to our unwavering dedication to building a safe and regulated digital asset ecosystem in India. As experts in the field, we feel it’s our responsibility to assist law enforcement agencies with rigorous security protocols.”

CBI’s Discretion in Ongoing Investigations

The CBI, known for its discretion in ongoing investigations, has not disclosed specific details of the operations involving confiscated digital assets. However, their gratitude towards Liminal for their assistance and involvement in securing these assets has been publicly acknowledged.

The CBI’s initiative to partner with Liminal for the custody of seized digital assets marks a critical step in addressing the security challenges in the cryptocurrency sector. This collaboration not only reinforces the need for enhanced security measures but also showcases the potential of public-private partnerships in regulating and safeguarding the digital asset ecosystem in India.

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CertiK: Crypto Social Media Scams Surge

In light of the increasing number of cryptocurrency scams permeating social media platforms, blockchain security company CertiK has delineated a comprehensive examination of this menacing trend. On October 26, 2023, CertiK took to Twitter to elucidate how the meld of social media’s extensive reach and cryptocurrency’s decentralized, and often murky, nature concocts a fertile ground for scam artists.

CertiK initiated its discourse by referencing a report from the Federal Trade Commission (FTC). The report stressed that cryptocurrency scams led to a staggering loss of over $1 billion in the 18 months leading up to June 2022. Interestingly, nearly 50% of these losses stemmed from engagements on social media platforms, whether via an advertisement, post, or direct message.

A Kaspersky report also revealed a 40% increase in cryptocurrency phishing attack scams in 2022, with 5,040,520 attacks compared to 3,596,437 in 2021. These attacks involve duping investors through fake websites and communication channels, allowing attackers to access crypto assets. Despite uncertainty about the future of phishing attacks, one in seven Kaspersky survey respondents admitted to being victimized. The attacks usually involve giveaway scams or phony wallet phishing pages, but attackers continue to refine their strategies. Recent incidents like Trezor warning against deception and Arbitrum investors falling victim to phishing links highlight the need for enhanced vigilance, authentication, and hardware wallets for crypto asset storage.

The discourse proceeded to the ominous “pump and dump” schemes. These operations are characterized by artificial inflation of an asset’s value to reap profits. Small-cap cryptocurrencies, often hyped by celebrity influencers, are particularly susceptible to such manipulative practices. The Securities and Exchange Commission (SEC) hasn’t turned a blind eye and has taken steps against influencers who promote risky, unvetted tokens, underscoring the significant risks these schemes pose to unsuspecting investors.

Further in the discussion, CertiK highlighted the misuse of verification badges on social media platforms such as Twitter, Facebook, and Instagram. These blue checkmarks, emblematic of a verified account, are exploited by scammers who either acquire verified accounts deceitfully or fabricate the verification badge, misleading the platform users.

The dialogue also touched on counterfeit applications posing as legitimate crypto apps. These sham apps act as Trojan horses, either installing malware or draining funds from users’ accounts. Alarmingly, these apps have managed to infiltrate official app stores like Apple App Store and Google Play, further exacerbating the threat landscape.

Dubbed ‘pig butchering’, romance scams are yet another method that begins on social media and culminates in a loss of crypto assets. Here, scammers feign as traders pledging to amplify victims’ savings through trading, only to vanish with their money once trust is established.

In the culmination of the thread, CertiK suggested several measures to bolster security against these scams. Utilizing a hardware wallet, employing multi-signature wallets with timelock, and opting for smart contract security audits were among the recommendations. For a more thorough understanding, CertiK directed readers to their blog, which delves deeper into safeguarding oneself against crypto social media scams.

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Coinbase Rolls Out AI-Driven ERC-20 Scam Token Detection System

Coinbase’s Chief Legal Officer, Paul Grewal, recently shed light on how their Engineering team is harnessing Artificial Intelligence (AI) to root out ERC-20 scam tokens.This innovation was disclosed on October 6, 2023, by Yifan Xu, Indra Rustandi, Yao Ma, and Vijay Dialani from the engineering team at Coinbase. The innovative ERC-20 Scam Token Detection System is a blend of smart contract auditing and machine learning prediction aimed at identifying both known and emergent scam types, marking a significant leap towards ensuring a safer crypto space.

The burgeoning realm of cryptocurrency is not without its share of scams, especially surrounding new and unverified tokens. Fraudsters employ a variety of devious tactics, ranging from Honeypot scams, which are deceptive traps to ensnare investors, to Internal Fees scams involving hidden or unusually high transaction fees. The evolving nature of these scams presents a continuous challenge, with new scam types emerging daily, posing a significant threat to both investors and the broader crypto ecosystem.

To combat these challenges, Coinbase has developed the Scam Token Detection System which employs a two-pronged strategy: 

Smart contract auditing is a proactive measure to identify and filter out known scam types. By meticulously examining the integrity of tokens, this step helps to mitigate the risk of fraud by excluding tokens associated with known malicious activities, capturing and cataloging them for future reference.

On the flip side, the system employs a machine learning framework to detect unknown scam types by identifying abnormal activity patterns. For instance, unusual patterns in time-series transactions among a concentrated group of accounts could be indicative of unknown scam types. This abnormality detection mechanism spots these irregularities, safeguarding against potential unidentified scams.

The Scam Token Detection System isn’t just a technological safeguard; it translates into tangible benefits for users. The establishment of a whitelist of trusted tokens is crucial for launching Coinbase’s asset recovery service for unsupported ERC-20 tokens. This feature, coupled with the ability to hide scam/spam tokens within the Coinbase Wallet, significantly enhances the platform’s capacity to filter out spam tokens, providing a cleaner, safer, and more user-friendly experience.

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BNB Chain Dominates Q1 2023 Rug Pull Scams

In the first quarter of 2023, BNB Chain has been identified as the network with the highest percentage of rug pull scams, according to a report by blockchain security firm Immunefi. The report, titled “Crypto Losses in Q1 2023,” investigated a variety of crypto hacks and scams in the first quarter of the year. It found that BNB Chain saw 73.3% of all rug pulls in the crypto ecosystem, with Ethereum coming in second at 26.7%.

The report also revealed that BNB Chain and Ethereum were the two largest targets for hackers and scammers, accounting for 68.8% of total losses from these networks combined. Of these two networks, BNB Chain was hit the hardest, with 41.3% of total losses from hacks and scams.

One particular type of scam stood out on BNB Chain: rug pulls. This type of scam involves developers raising funds and then shutting down their project without delivering the promised product or service. According to Immunefi, BNB Chain saw 73.3% of all rug pull scams in the crypto ecosystem during Q1 2023.

The Immunefi report highlights the need for increased security measures in the crypto industry, particularly on BNB Chain. As the network continues to grow in popularity, it is likely that more hackers and scammers will try to exploit vulnerabilities in the system. This makes it essential for investors to remain vigilant and do their due diligence before investing in any crypto project.

While BNB Chain has faced its fair share of challenges in Q1 2023, it remains one of the most widely used networks in the crypto ecosystem. Its popularity can be attributed to its low transaction fees, fast confirmation times, and support for smart contracts. As the network continues to evolve and improve, it is likely that it will remain a dominant force in the crypto industry for years to come.

In conclusion, BNB Chain dominated Q1 2023 rug pull scams, accounting for 73.3% of all such scams in the crypto ecosystem. While this is certainly concerning, it is important to remember that the crypto industry as a whole is still in its early stages of development. As the industry matures, it is likely that new security measures will be implemented to prevent these types of scams from occurring in the future. In the meantime, investors should remain cautious and do their own research before investing in any crypto project, particularly on networks like BNB Chain that are more susceptible to scams and hacks.


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Scammers adapt to survive during crypto winter

In a recent crypto crime webinar, Eric Jardine from Chainalysis revealed how scammers adapt their strategies to changes in market situations. While overall crypto scam revenue dropped in 2022, Jardine noted that not all scams behaved similarly. By sub-classing scams into types, he found that scammers were adapting to market conditions and turning to other strategies, such as giveaway and romantic scams, to prey on people’s emotions.

Jardine’s data revealed that as investment scams become less effective, romance and giveaway scams become more prevalent, indicating that scammers are not simply using the same script over and over again. They can adapt and change depending on market conditions. Additionally, Jardine highlighted that a multilevel marketing scam called hyperverse took a massive chunk out of the $5.9 billion lost to scams in 2022, racking up around $1.3 billion, which accounts for roughly 22% of scam revenue in that year.

The rise of romance and giveaway scams during the crypto winter is not surprising as scammers often prey on people’s emotions during difficult times. These scams are designed to target people who are feeling vulnerable and in need of support. Giveaway scams often promise free tokens or coins in exchange for personal information, while romance scams involve scammers posing as potential partners to gain access to victims’ personal information or money.

It’s important to note that these scams are not exclusive to the crypto world and have been used by scammers for years. However, the crypto world provides scammers with a new platform to reach a wider audience and target people who are investing in digital currencies. As the market conditions change, scammers will continue to adapt and find new ways to deceive people.

Investors and consumers must remain vigilant and educate themselves on the latest scams and tactics used by scammers. Platforms and exchanges can also play a significant role in detecting and preventing scams by implementing robust security measures and educating their users. By working together, we can help to mitigate the risks posed by scammers and protect the integrity of the crypto industry.


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Hong Kong Suffers Surge in Crypto Scams in 2022

A large increase in the number of financial losses brought on by bitcoin scams has been seen in Hong Kong in the year 2022. According to reports from the local police, victims of cryptocurrency scams lost a total of HK$1.7 billion in 2018, marking a 106% increase from the previous year. In addition, the number of incidents of fraud using cryptocurrencies increased by 67 percent from 2021, reaching 2,336 cases. According to the Hong Kong police CyberDefender website, these scams were responsible for more than half of the HK$3.2 billion that was taken from citizens of the city as a result of technological crimes.

The growing usage of cryptocurrencies has made it increasingly difficult for authorities to trace the origin of monies obtained via illegal activity. Fraudsters are able to conceal their names, transactions, and ultimate destination thanks to the anonymity given by cryptographic currency transactions. Because of this, following the money trail left by criminals has become increasingly difficult for law enforcement.

The Cybersecurity and Technology Crime Bureau of the Hong Kong Police Force has provided some insights into the profile of a typical fraudster operating in the cryptocurrency industry. These con artists will claim to have extensive knowledge in the financial markets, particularly when it comes to crypto assets, precious metals, or foreign exchange goods. They often use bait to entice unsuspecting victims into downloading phony investing programs that display fictitious transactions and profits.

In order to differentiate its approach to cryptocurrency regulation from China’s total ban on cryptocurrencies, which will be implemented in 2021, the government of Hong Kong has gotten actively involved in the development of bitcoin infrastructure. The Securities and Futures Commission of Hong Kong issued a request for public comment in February on the updated proposed licensing framework for cryptocurrency exchanges, which is scheduled to go into force beginning in June 2023. Despite this, it is still very important to exercise extreme caution while investing in cryptocurrencies, as con artists continue to develop new methods to abuse the weaknesses of the market.


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Aussie Billionaire Files Criminal Case Against Facebook (Meta) for Running Illegal Crypto Ads

Fortescue Metals Group Chairman Andrew Forrest has filed a criminal case against Facebook in Australia for its failure to stop scam ads featuring his image. According to the Australian mining billionaire, this is the first time that Facebook is facing a criminal charge anywhere in the world.

“I’m doing this on behalf of innocent Australians who don’t have the resources to take on companies like Facebook,” Forrest said in his lawsuit.

Following Forrest’s criminal suit, the Australian Competition & Consumer Commission (ACCC) has reportedly started an investigation.

“While Dr. Forrest’s proceedings concern similar advertisements to those that the ACCC is investigating, the ACCC’s investigation is separate and concerns different questions of law. Dr. Forrest’s proceedings have been brought under the Commonwealth Criminal Code,” ACCC Chair Rod Sims told The Australian.

Forrest’s Lawsuit

Forrest alleged that fake crypto investment ads on Facebook used his image to claim that the mining billionaire endorsed certain investment schemes, and it resulted in many conned people. According to Forrest’s lawyers, Facebook “knowingly profits from this cycle of illegal ads,” and it amounts to a violation of anti-money laundering laws.

They also noted that Forrest had spent thousands of dollars since 2019 when these ads started appearing to dissociate himself from the false claims.

In an open letter in November 2019, Forrest asked Mark Zuckerberg to stop fake ads on Facebook featuring his face as an endorsement of the crypto investment schemes. But there was no appreciable change in the social media’s ad policy, and ads featuring celebrity testimonials continued to appear as sponsored posts. However, the Australian financial watchdog cautioned investors about fake crypto ads and sites with celebrity testimonials.


Meta, the parent company of social media giant Facebook, offered a clarification without acknowledging Forrest’s lawsuit. It said, “We don’t want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community.”

Where is the Problem?

Social media companies often blame “cloaking” for dubious ads to bypass the checks. Cloaking is a process that lets scammers show different content when it’s being reviewed by social media filters, while the actual ad to run on the platforms could be different.

“I want social media companies to use more of their vast resources and billions of dollars in annual revenue to protect vulnerable people who are targeted and fall victim to these scams,” Forrest said in his lawsuit.

“Like Dr. Forrest, we consider that Meta should be doing more to detect, prevent, and remove false or misleading advertisements from the Facebook platform so that consumers are not misled and scammers are prevented from reaching potential victims,” Sims from ACCC said.

Earlier this week, Facebook’s parent company Meta revealed disappointing Q4 2021 results, leading to a substantial double-digit price decline of its shares in after-hours trading.

Featured Image Courtesy of The West Australia


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CZ Warns of a Massive Phishing Scam Targeting Binance Users

The CEO of the world’s leading cryptocurrency exchange has warned of a ‘massive’ SMS phishing scam that targets Binance users.

  • Tweeting on Friday, Changpeng Zhao, the CEO of the world’s leading cryptocurrency exchange – Binance – warned of a phishing scam campaign that’s targeting users of the exchange.

There is a massive phishing scam via SMS with a link to cancel withdrawals. It leads to a phishing website to harvest your credential as in the screenshot below. Never click on links from SMS… –  warns the executive.

  • This is the screenshot cited in the above:

Source: Twitter

  • The CEO also reaffirmed that users should always visit the website through a bookmark or to type it in and never to use any shady links.


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Love Hurts: British Man Loses $200K in a Bitcoin Romance Scam (Report)

An anonymous UK resident reportedly parted with nearly $200,000 of his savings after a woman he messaged in a dating app conned him. The man admitted he felt so desperate after the scam that he considered taking his life.

‘In The Blink of an Eye, Everything Was Gone’

According to a recent coverage by BBC, the British citizen, called Tom (which is not his real name), was struggling with a break-up in 2020 and joined a dating application to look for companionship. Shortly after, a woman who introduced herself as Jia from Hong Kong approached him, and the duo started messaging.

Tom revealed that he and his online date were discussing their mutual future. Jia also portrayed herself as a successful cryptocurrency investor with “inside knowledge” and lured the man into dreaming of building a wealthy lifestyle with her.

“Issues were flagging up to me, but everything she was doing to build up trust with me was enough to keep me there,” the man admitted.

At one point, the woman asked Tom if he knew anything about bitcoin. The latter said he had invested in it a few years back. Then, Jia directed Tom to an online trading platform and instructed him to download the application on his mobile phone.

Once again, the British felt suspicious but at the same time lucky as he seemed to have met someone with “insider information” who could possibly make him rich. The woman encouraged Tom to keep making investments on the dubious app, telling him he would miss out on profits if he were not quick enough. The man ended up investing around $200,000 when he found out that his balance “had been cleared.”


“In the blink of an eye, everything was gone. I was sick to my stomach,” he confessed.

He asked Jia to explain the missing funds, but the woman refused to help, saying she had to fly to Australia and spend time with her sick aunt. At that point, Tom realized he had become a victim of a cryptocurrency scam. Feeling devastated, he searched for help and admitted that if it was not for his mother, he might have taken his life:

“I recognized I needed help straight away and went straight round to see my mum. If I didn’t have that support, I wouldn’t be here. I was going to do something that wouldn’t leave me here anymore.”

The Australian Nurse Who Lost Her Life Savings

Tom is not the first individual to have his funds drained via a fraudulent cryptocurrency scheme.

Last year, CryptoPotato reported that the Australian citizen Rhonda, who was just months away from retirement, became a victim of a similar scam. She was approached by a person claiming to be a local celebrity who asked her to start investing in bitcoin in a dubious application.

In the next several months, Rhonda made several investments which totaled all her lifestyle savings. Unfortunately, upon checking her account at one point, she noticed that all the funds had gone missing.

The local authorities tried to help her, but the operation failed. Despite realizing that her retirement plans were gone, Rhonda stayed positive and said she would continue working as a nurse.


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String Of Crypto Youtubers Hacked With “One World Cryptocurrency” Video

Earlier this morning, a mysterious video called “One World Cryptocurrency” was posted across numerous popular crypto/ finance YouTube channels – without the owners’ permission. The video has all the appearances of a giveaway scam.

“One World Cryptocurrency”

The minute-long video features promotion of a supposedly new BSC token called “One World Cryptocurrency” (Ticker: OWCY). It features a “contact address”, and a listed pre-sale price of “0.0001’ (no unit of account was given).

It then lists a number of cryptos through which “investors” can allegedly buy the token, including USDT, USDC, BNB, and ETH. It claims that OWYC will be listed on both CoinMarketCap and CoinGecko – neither of which have done so yet.

BSC and Ethereum addresses were provided for purchasers to buy the new coin. According to BscScan and EtherScan, neither address has pulled in more than a few hundred dollars thus far.

Giveaway scams are rampant in the crypto space, thanks to the potential for anonymity and irreversibility that blockchain transactions provide. These same properties have also made them popular tools for ransomware attacks. Others have been far more lucrative as well, with a fake Michael Saylor giveaway scam netting $1.1 million last week.


YouTubers Get Hacked

Numerous Twitter users reported the video having randomly appeared in their YouTube feeds from unexpected posters. One of these was Coin Bureau, a crypto-focused YouTuber with nearly 2 million subscribers.

“So our YouTube channel was just hacked,” he told his followers in a tweet. “Unless someone physically had a security key, I have no idea how they got access…”

The creator claimed that all of his accounts were secured with strong passwords and security keys, and called upon YouTube to address the issue.

Arun Maini (aka Mrwhosetheboss) – a tech YouTuber with over 9 million subscribers – was also impacted. “I think someone got into my YouTube account and posted something,” he said this morning. A screen recording shows that it was the OWCY video. He also requested that YouTube fix the problem, noting that he hadn’t even received a notification that a video was posted to his channel.

Dozens of other YouTubers were affected, including Real Vision, Ivan on Tech, and Bitboy Crypto. Most have since removed the video from their channels.


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