ZachXBT, a well-known on-chain investigator, claims that Monkey Drainer, a phishing scammer, has stolen over 700 ETH (equal to $700,000) worth of cryptocurrency and non-fungible tokens in the last 24 hours, amounting to about $1 million.
How did the Monkey Drainer Scam?
According to ZachXBT, the two biggest victims, 0x02a and 0x626, lost a total of $370,000 after approving transactions on phishing websites controlled by the serial fraudster. A total amount of $150,000 worth of non-fungible tokens (NFT) were apparently lost by 0x02a, including 1 Bored Ape Yacht Club (BAYC) collection, 1 CloneX, 36,000 USDC, and 12 additional NFT.
In the last few weeks, the suspected scammer has been successful in tricking several victims. The researcher claims that the amount of money stolen in the scam has exceeded $3.5 million and is continuing to rise.
Over 7,300 transactions have been performed by the hacker throughout his several months of operation.
APY, BMI, SHOPX, XED, and PMON, among other low-cap projects, were allegedly promoted by well-known crypto influencer Lark Davis before being dumped on the community's uninformed users, according to ZachXBT. He allegedly earned $1 million as a result.
Both of these victims were only a few of the numerous people who had their money taken by Monkey Drainer. According to a tweet from ZachXBT, more than $3.5 million has been stolen in total, and the figure is growing daily.
ZachXBT advised to the users to exercise "extreme caution" before linking their wallets to untrusted websites and signing transactions.
However, ZachXBT discovered a new phishing scheme in August when victims lost more than $2.5 million worth of NFTs. Five individuals associated with the BAYC collecting scheme were indicted in Paris earlier in October.
Phishing scams sometimes include criminals disseminating links to websites that pose as legitimate initiatives or businesses to trick users into divulging private information by promising a thrilling purchasing opportunity or a no-cost promotion.
The Monkey Drainer has been associated with four specific addresses, including the monkey-drainer.eth address.
Web3 Security Community Wallet Guard Responded
The blockchain-based Web3 security network Chainabuse now displays a lengthy series of reports about airdrop frauds, NFT scams, and phishing assaults when searching these addresses.
A handful of the reported cases are phony Aptos Airdrops, a false Wolf Game, Bored Ape Yacht Club marketplace, and airdrop frauds via the Astrobot Society discord channel.
ZachXBT's Twitter thread received a response from the Web3 security community Wallet Guard, which claimed to have "seen multiple additional mint sites recently constructed" with Monkey Drainer on the backend, including a bogus Garbage Friends whitelist link that led to a phishing website.
In the last few years, ZachXBT has established himself as a reputable independent blockchain investigator and exposed numerous instances of criminal activity in the industry.
Christophe Durand, the deputy head of France's national cyber unit, even acknowledged ZachXBT's efforts earlier this month for aiding authorities in locating five people accused of using phishing to steal NFTs valued at $2.5 million.
Conclusion
Even though 2022 has been a challenging year for the cryptocurrency market, phishing attempts continue to target cryptocurrency on social media. Phishing attacks rose from 106 to 290 in the second quarter, a 170% rise, according to blockchain analysis company CertiK.
The Coin Rise claimed that in a more recent event, hackers chose to target several FTX users and were successful in obtaining cryptocurrency worth $1.26. In previous incidents, hackers have taken control of Gate.io, an exchange platform's official Twitter account. The three biggest social media hubs for cryptocurrency frauds are now Discord, Telegram, and Twitter.
Like many industries, the crypto industry is also not free from vices that affect its overall functioning and output. Therefore, certain checks and steps are necessary to prevent it from degrading to a higher extent. In the past few years, several such steps have been taken to keep the crypto industry in check. However, there have been various such instances wherein crypto mixers have also become a matter of concern.
In a recent report, the assistant secretary of the Treasury Department has said that putting sanctions on crypto miners can be of huge help. It can prevent the evil systems prevalent in it such as money laundering. It can spread across various countries such as North Korea, Russia, and Iran.
How can sanctions on cryptocurrency mixers be of help?
Elizabeth Rosenberg stated in a recent report that the enforcing of sanctions on entities such as crypto miners can be of huge help to the Government. It can be the best way to prevent foreign countries from making use of the crypto platform for various illegal activities. She, being the assistant secretary for terrorist financing and financial crimes came up with this suggestion as a preventive measure to make the digital currency platform a safer space for all.
Further comments on the crypto mixer sanction
There have been various steps taken towards the fulfillment of the above-mentioned goal. In one of the recent hearings of the Senate Banking, it has been quite vividly elaborated how the inclusion of various crypto mixers in the group of Specially designated nationals can work in favor of the US in letting foreign countries know the steps it is taking to prevent exploitation or breach of sanctions. These crypto mixers include blender.io, Tornado cash, etc. It is a step that has been deemed necessary to an extent that it has become almost mandatory.
Role of sanctions in preventing money laundering
It has been also been stated by Rosenberg that with the use of sanctions if prevention of usage of mixers for illicit activities can be encouraged, then it should and must be used likewise. It would be the best way to indicate or represent that the entity does not respond well to any sort of money laundering and prevent criminals from engaging in such activities. Does not matter which group or country they belong to, a criminal should be taken action against without any further consideration.
Some more information on the sanction on crypto mixers
Even though there have been several oppositions to this particular decision, it has still stood strong and held its ground. Its motive and aim have been questioned time and again for it, as per the views of the opposition, could bring about disastrous consequences. Several well-reputed entities like Coinbase even went as further as threatening to charge a lawsuit against the government authority for the step they have taken, especially for imposing sanctions on Tornado cash.
Conclusion
This particular government entity has directed its initiative towards those trying to use various Bitcoin assets and aimed at different Bitcoin addresses. These addresses included groups from Russia as well as Iran. However, it later made it clear that the Treasury does not aim at putting any sort of regulations on users which would affect the sharing of Tornado Cash's code on different websites. This declaration was made by the treasury in between the unrest and lack of clarity that is prevalent among crypto users for some time now. Needless to say, the crypto market being volatile is susceptible to changes that may or may not be accepted by each and everyone associated with it or affected by it.
Crypto-analyst Arthur Hayes says Hong Kong has a vital part to play in the development of the global Bitcoin and other virtual currencies market. The next cryptocurrency bull run, according to the former CEO of BitMEX, a market leader in cryptocurrency futures, will begin when China enters the market again.
The Hong Kong government's announcement about introducing a bill to regulate crypto is a sign that China is trying to ease its way back into the market. This could be because Hong Kong acts as "the proxy through which China interacts with the world," according to former Bitcoin co-creator Sean Hayes.
He commented, “When China loves crypto, the bull market will come back and It will be a slow process, but the red shoots are budding.”
As per Hayes, Hong Kong might serve as Beijing's test market for its experiments with cryptocurrency markets and as a conduit for Chinese capital entering the international cryptocurrency markets:
Further, he stated, “If these flows actually materialize in the way I imagine, they will be a strong supporting pillar of the next bull market.”
In a survey by Forex Suggest released in July 2022, Hong Kong has named the nation best poised for the broad adoption of cryptocurrencies. Numerous aspects were taken into account, including startup culture, crypto ATM installations, and crypto-friendly regulations.
Unfortunately, it is said that by the end of September this year, Hong Kong has lost this position partly because of its murky cryptocurrency regulations. Due to this, a number of significant crypto-focused companies and events were obliged to relocate their operations to Singapore and other nations and territories that were viewed as more welcoming.
Despite having one of the largest economies on earth, China has generally been hostile to the cryptocurrency sector. The nation's initial ban, which forbade banks from processing Bitcoin transaction, was enacted back in 2013.
When Beijing conducted numerous regulatory operations to banish Bitcoin mining from the nation and declared all cryptocurrency transactions to be banned in 2021, it stepped up its crackdown on the industry.
But as per Hayes, “China has not left crypto — it has just been dormant.”
In September 2022, China did start up its Bitcoin mining once more, and Chainalysis stated in its 2022 Global Crypto Adoption Index that China had re-entered the top ten this year after coming in 13th place in the previous year.
Given the Chinese government's assault on cryptocurrencies, the Global Crypto Adoption Index's authors said they considered the development "particularly noteworthy," but their data shows that "the prohibition has either been unsuccessful or lightly implemented."
How China is essential for Hong Kong's cryptocurrency growth?
Arthur Hayes, co-founder of BitMex, commented on news of Hong Kong's "comeback" efforts on his blog, saying that access to Chinese consumers is essential for Hong Kong's appeal to cryptocurrency businesses.
As cryptocurrency investors, we are concerned about Hong Kong's capacity to meet China's capital needs, he stated. The regular wealthy Chinese people are what drive the Hong Kong economy, whether it is through retail sales or capital flows.
He also voiced concerns about how China could use its influence over Hong Kong to undermine any pro-crypto measures such as, "What's to say Beijing won't reconsider tomorrow and roll back all these advantageous crypto policies?"
But he went on to say that he thought this time, "China is for real."
Conclusion
By the end of the month, the nation is anticipated to make its position on digital assets known. As previously reported, the Hong Kong Special Administrative Region of China will make a policy announcement at the next Hong Kong Fintech Week event, which is set to take place between October 31 and November 1.
The top cryptocurrency exchange Binance has identified two suspects who are allegedly responsible for the hack of $265,000 from decentralized exchange (DEX) protocol KyberSwap earlier this week.
Changpeng Zhao (CZ), the CEO of Binance, exposed this information on Twitter recently. The company has shared the info with KyberSwap along with the appropriate law enforcement agencies.
The Attack :
KyberSwap has faced a cyber attack
on September 1. The DEX protocol faced an unhealthy security breach which allowed hackers to steal assets. It was worth thousands of dollars to users.
According to the project, the bad actors shared malicious code on the protocol’s Google Tag Manager (GTM). It has prompted false approval that allowed them to transact assets in their wallets.
The platform also shared that the hackers smartly launched the bad script. It was targeted to whale wallets on Ethereum and Polygon. Further KyberSwap added that exploited users would be fully compensated.
The hack came to know and immediately stopped within two hours of its launch. The protocol offered that the bad actors would be rewarded with a 15% bug donation if they returned the stolen assets.
Binance As Crypto 'Big Brother :
Hardly two days after the theft, the Binance investigation team announced that they had been able to track and identify two scammers who are suspected or may be responsible for the hack. The company also noted that they had appointed government authorities in the incident for further investigation.
Similar to KyberSwap, Binance has assisted with several hacked protocols to identify the bad actors along with recovering some stolen assets.
As the biggest crypto exchange by trading volume, the proactive and unselfish efforts of Binance to help investors from other ecosystems weren’t neglected.
As one of the users stated, “Binance is now playing as a big brother in the crypto space. Binance has gone beyond securing its platform to keep the entire crypto ecosystem safe.”
CZ stated that Binance has never been lawfully integrated in China and has never fixed business in a manner compatible with the Chinese organization, Cointelegraph.
Notably, the company succeeded to recover nearly $450,000 stolen from the Defi platform Curve Finance last month. It was reported that the recovered funds were 83% of the total assets exploited from the protocol. The platform stated that the hackers transferred the assets to the exchange through different techniques. They expected to bypass the firm’s security team.
Since the platform, Binance, continues to make an effort to make the global crypto industry safer for investors and users, some user groups of the crypto community think that the company is now acting as a “big brother” role in the whole crypto market.
According to Changpeng ‘CZ’ Zhao, CEO of Binance, the theft of information had been noted to the Kyber team. Since both sides are eager to catch the hackers, Binance has also begun to work with law enforcement as of the recent information.
Conclusion :
Notably, there have been so many exploits and theft in the crypto market over the past couple of months. Since the market fell and started a crypto winter, bad actors took it as their opportunity. Platforms like Solana, Cardano, etc. have suffered from several exploits. The theft is mainly happening through smartly executed ideas. Phishing scams and fake airdrops are mentionable. Users' wallets are drained through luring through free tokens. In multiple cases, hacking links are also used as the weapon of scams. Nowadays, Twitter scams are also very famous in the crypto market. Where fake posts and links are circulated through the social media platform. Users are trapped in that kind of scam believing it is real.
A massive crypto platform blunder happened in crypto exchange Crypto.com. The error was disclosed after 7 months after the incident. A huge amount of crypto has been transferred mistakenly. Nearly AU$10.5 million ($7.2 million) worth of crypto has accidentally been transferred to a woman in Melbourne.
But the blunder became a more complicated issue as the Australian woman Thevamanogari Manivel spent a massive amount of the crypto. According to reports, five-bedroom property in suburban Melbourne was purchased from the crypto. The spent amount is AU$1.35 million.
How Did it Happen?
In December 2021, during an audit, that crypto firm disclosed that it had made a mistake in processing an AU$100 refund. That happened seven months earlier than that disclosure. That time the error was unnoticed.
The firm did this blunder during the payment process to the Australian lady. It entered the account number of that woman into the payment amount space.
Getting back the funds that were mistakenly transferred, the state of Victoria’s Supreme Court has ordered the home. It was ordered to sell the properties that were bought by capital and the money was returned to the company.
Recent reports show that the case is expected to back into court next month in October 2022.
The Legal Actions :
It was reported that the firm, Crypto.com had launched legal action to get back the amount
in the Victoria Supreme Court.
Following the court's order, the Australian Woman's bank account was frozen in February 2022. Unfortunately, the major amount of money either has already been spent or transferred to other bank accounts.
The court judgment stated that the money that was accidentally sent from the firm, was distributed to other relatives of that lady. Manivel sent $430,000 from that amount to her daughter in January 2022. Apart from that, she purchased a house in Craigieburn, a suburb of Melbourne. The house is priced at $1.35 million.
The court has ordered to sell the house and return $1.35 million to the firm along with its interest. As the interest was added, the amount is going to be raised at a high level to return it.
If that sister duo will not put their property for sale, Cypto.com will reportedly appoint a receiver to sell the house and will recover its money from the proceeds.
Also, if the lady will not cooperate with the court's proceeding, they are going to dip into more troublesome legal actions. Additionally, the court has also ordered the ladies to pay for the court's proceedings.
Present Condition Of The Market :
Notably, in this crypto winter, all the crypto platforms along with the major ones are suffering from their losses. Several exploits and scams are taking place in the market. Users and investors are panicking to invest in the market. Bad actors are luring the users through fake air drops and several other offers to gain tokens. Along with the platforms, its user community is also suffering from its losses. In those circumstances, that kind of error made by Crypto.com led it to a more risky financial structure. To play safe, the platform reportedly hid its blunder. There are so many reasons to hide that error from the other community. As the users are going backward in terms of believing any platform, the platform chose not to disclose its error. Additionally, for more advancement, the crypto platforms are choosing to adopt web3 technologies along with Metaverse projects. That is why web2 platforms are now into a hard competition to exist in the market. The gaming platforms to Defi, all are switching to that web3 mechanism.
