Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Cyber Security, Quantum, Hacks, Fraud Alerts, Risks, InsurTech
Crypto Crime Falls But Ransomware Persists: 2023 Mid-Year Update
Research | July 13, 2023
Image: Chainanalysis
2023 Mid-Year Crypto Crime Update from Chainalysis
Despite a broad downturn in crypto crime in 2023, ransomware has bucked the trend, extorting an alarming $175.8 million more than the same period in 2022.
- Cryptocurrency-related crime has significantly decreased in 2023, with inflows to known illicit entities down by 65% compared to the same period in 2022. Inflows to risky entities, primarily mixers and high-risk exchanges, are also down by 42%. This decline is more pronounced than the 28% drop in inflows to legitimate services, indicating a more substantial decrease in illicit crypto transaction volume.
- Scams Take a Hit: Scams, typically the highest-revenue form of crypto crime, have seen a significant drop in 2023. Crypto scammers have taken in nearly $3.3 billion less than they did in 2022, totaling just over $1 billion for the year. This decline is notable as it occurs during a period of rising crypto asset prices, which usually correlate with higher scam revenue.
- Ransomware is the only form of crypto-based crime expected to grow in 2023, with attackers having extorted $175.8 million more than they did at the same time in 2022. If this trend continues, ransomware attackers could extort $898.6 million from victims in 2023, making it the second-biggest year ever for ransomware.
See: Calgary Police and Chainanalysis Launch the Western Canada Cryptocurrency Investigations Centre
- Big Game Hunting: The resurgence of ransomware is attributed to the return of "big game hunting," where large, deep-pocketed organizations are targeted by ransomware attackers. There has also been an increase in successful small attacks, leading to growth in ransomware payments at both ends of the spectrum.
- Despite the overall decline in crypto crime, the persistent threat of ransomware underscores the need for continued vigilance. Businesses should continue to strengthen their cybersecurity and data backup procedures to protect against this significant threat.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Blakes: Cybersecurity Trends in Canada: A 2023 Perspective
Blakes | Jul 12, 2023
Blakes has launched its fourth annual Canadian Cybersecurity Trends Study, a comprehensive look at Canada's cybersecurity landscape.
The study is divided into four sections, each focusing on a different aspect of cybersecurity, including incident trends, mandatory breach reporting, cybersecurity litigation, and incident preparedness.
A few key takeaways from the report include:
- Ransomware attacks remain the most common type of cybersecurity incident, representing nearly 70% of all incidents. These attacks are also often the costliest, both financially and operationally.
- Two-thirds of organizations targeted by ransomware attacks ultimately paid a ransom, up from 56% the previous year. The median ransom paid was CAD 546,000, a 170% increase over the last two years.
See: 10 Fintech Trends that Will Shape the Financial Industry in 2023
- Software vulnerabilities were the root cause of 45% of observed incidents, underscoring the importance of promptly patching known vulnerabilities as a critical security measure.
- Attackers were able to access data in 77% of cases, up from 69% the previous year, and exfiltrated data in 68% of cases, up from 51% the previous year.
- Despite the increasing sophistication of attacks, if a ransom was paid, attackers followed through with their commitment to provide decryption or evidence of data deletion in 100% of cases.
View more and download the report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Russian Duo Charged in Historic Mt. Gox Hack and BTC-e Money Laundering Operation
US DoJ | Release | Jun 9, 2023
Image: Unsplash/Bermix Studio
Russian nationals Alexey Bilyuchenko and Aleksandr Verner have been charged by the US Justice Department for hacking Mt. Gox, a prominent cryptocurrency exchange, and stealing 647,000 bitcoins, as well as illicitly operating the BTC-e exchange for money laundering.
- Russian Nationals Charged in Mt. Gox Hack:
- Alexey Bilyuchenko and Aleksandr Verner, both Russian nationals, face charges linked to the 2011 hacking of the prominent cryptocurrency exchange, Mt. Gox, and illicit operation of another cryptocurrency exchange, BTC-e.
- The charges were unveiled by the US Justice Department, marking a significant stride in two major cryptocurrency investigations.
- The duo is accused of stealing a substantial amount of cryptocurrency - approximately 647,000 bitcoins - from Mt. Gox, which played a critical role in the exchange's insolvency. They allegedly laundered the majority of the stolen bitcoins through accounts controlled at two other online bitcoin exchanges.
See: Do Industry Operators, Researchers, and Regulators Agree On How Big Crypto Crime Is?
- BTC-e Illicit Operation:
- Bilyuchenko is also implicated in running the notorious BTC-e virtual currency exchange from 2011 to 2017 with Alexander Vinnik. BTC-e served as a laundering hub for cyber criminals globally, facilitating the movement, laundering, and storage of illegal proceeds from various cyber crimes.
View the original release --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Revolutionizing Anti-Money Laundering: Insights from Project Aurora
BIS | May 31, 2023
Image: BIS, Project Aurora
Discover how AI, data, and cross-border collaboration are shaking up the battle against financial crimes.
- Proof of Concept Completion and Advancements:
- The BIS Innovation Hub's Nordic Centre has successfully wrapped up Project Aurora, a proof of concept aimed at combating money laundering.
- By leveraging a synthetic data set representing real-world domestic and international payments data, advanced privacy-enhancing technologies, AI, and enhanced cooperation across entities and borders, the project showcased the transformative potential of these technologies in anti-money laundering (AML) efforts. Enhanced tools for data analysis helped identify suspicious patterns, moving beyond the limitations of current systems that often operate in silos.
- AML efforts have a significant financial burden on institutions, with costs rising by about $60 billion to roughly $274 billion between 2020 and 2022. Despite these efforts, a majority of laundered money remains undetected, indicating that existing methods are inadequate.
- Project Aurora offers a more effective and potentially cost-efficient approach, focusing on behavioral-based analysis, a stark contrast to the prevailing rules-based approach.
Read: Opinion: The Financial Surveillance System May Be Less a Tool for Crime Prevention than a Means of Bureaucratic Ass Covering
- Implications and Future Steps:
- Project Aurora has demonstrated that technology, coupled with robust public-private collaboration, can form a potent tool against money laundering. The project suggests that employing these advanced technologies and methods could revolutionize the fight against money laundering, enhancing detection rates, and reducing the financial burden on institutions.
- However, these technologies alone cannot fully eradicate money laundering. To optimize their potential, they should be bolstered by a supportive legal and regulatory framework, as well as robust cooperation between all entities in the financial ecosystem. The realization of such a collaborative, tech-driven approach could mark a major breakthrough in curbing financial crimes.
Continue to the full article --> here
Download the 103 page Project Aurora report PDF --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Finance Canada Launches AML/ATF Consultation to Strengthen Regime (Deadline August 1, 2023)
Finance Canada | Release | Jun 7, 2023
Image: Finance Canada
The Government of Canada has launched this public consultation to examine ways to improve Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. Submissions to this consultation will close on August 1, 2023.
- The Government of Canada is undertaking a comprehensive review of its Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime in response to evolving risks and threats in the financial sector.
- The review is particularly crucial given the increased digitization of financial transactions and the emergence of new financial technologies, which present new potential avenues for illicit activity.
- The review will examine the effectiveness of existing legislative and regulatory frameworks in combating money laundering and terrorist financing and identify necessary improvements.
- It will also assess emerging risks in certain sectors, such as digital assets, crowdfunding platforms, mortgage lending entities, and armoured car companies, among others.
See: Guide: How to spot potential money laundering
- Key objectives include improving the detection and disruption of money laundering and terrorist financing activities, addressing higher-risk vulnerabilities, positioning Canada for its next FATF evaluation, and responding to recommendations from the Cullen Commission.
- As part of this process, the government is seeking feedback on potential policy measures that could be integrated into future legislative and regulatory amendments, with the goal of strengthening Canada's AML/ATF Regime.
Who Should Participate
Stakeholders from various sectors should participate in this consultation process, given the wide-ranging impact of money laundering and terrorist financing activities on the Canadian economy and society. Specifically:
- Financial Institutions and FinTech Companies: Given their direct involvement in the financial system, these entities can provide valuable insights on the operational challenges and potential solutions in the detection and prevention of money laundering and terrorist financing activities.
- Government Agencies: Different government departments involved in Canada's AML/ATF Regime can provide insights on policy implications, regulatory enforcement, and inter-agency coordination.
- Legal and Regulatory Experts: These individuals can contribute to the discussion around legislative and regulatory changes and their impact on Canada's AML/ATF Regime.
- Public Policy Think Tanks and Research Institutions: These groups can provide a research-based perspective on potential enhancements to the AML/ATF Regime.
- General Public: Given the broader societal implications of money laundering and terrorist financing, including the potential for financial instability and reduced trust in the financial system, the public's perspective is crucial in shaping a comprehensive and effective policy response.
How to participate (deadline August 1, 2023)
Email us your comments and feedback at fcs-scf@fin.gc.ca with "Consultation Submission" as the subject line.
Comments and feedback may also be sent by mail to:
Director General
Financial Crimes and Security Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa ON K1A 0G5
See: Financial Crime Compliance is Ripe for Innovation – What Banks Need to Do?
By contributing to this consultation, these stakeholders can play a significant role in shaping the future of Canada's AML/ATF Regime, ultimately helping to enhance the safety and integrity of the nation's financial system.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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QuadrigaCX Creditors to Recoup 13% of Investments from Defunct Cryptocurrency Platform
CBC News | Richard Woodbury | May 16, 2023
Image: OSC
The law firm Miller Thomson, representing the creditors of the collapsed cryptocurrency company QuadrigaCX, has announced that each proven creditor will receive 13% of their initial investment back.
- In a notice posted late last week, law firm Miller Thomson said as of this month, there are $305.66 million in total claims against QuadrigaCX.
- The Trust Dilemma: The collapse of QuadrigaCX, which turned out to be a Ponzi scheme, has had a significant impact on the trust investors place in cryptocurrency exchanges. Many, like Elvis Cavalic, who lost around $15,000 in the QuadrigaCX collapse, have grown skeptical and wary of such platforms.
- Once among Canada's premier cryptocurrency exchanges, QuadrigaCX imploded in early 2019 after the demise of its founder, Gerald Cotten, during his honeymoon in India in December 2018.
- Misuse of Funds: Investigations into QuadrigaCX's activities revealed that the late CEO Gerald Cotten had been funneling money from the exchange into his personal accounts, resulting in a lavish lifestyle.
- His widow, Jennifer Robertson, forfeited $12 million in assets, stating her unawareness of her husband's fraudulent activities.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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B.C. Securities Commission Alleges ezBtc Involved in $13M Fraud
Today in B.C. | Canadian Press | May 2, 2023
The B.C. Securities Commission accuses David Smillie and his now-defunct company, ezBtc, of committing a multimillion-dollar securities fraud by diverting customer assets to online cryptocurrency gambling sites.
- The company allegedly diverted about $13 million worth of bitcoin and ether without customer authorization. Smillie and ezBtc were never registered under B.C.'s Securities Act, and the regulator claims agreements with customers amounted to futures contracts under its jurisdiction.
See: Coinbase and Kraken Reaffirm Plans to Stay Operational in Canada Amidst Changing Regulatory Landscape
- Although the matter is administrative, not criminal, Smillie and the firm may face monetary penalties or banishment from public markets if the commission proves its case.
- A police investigation in 2019 didn't find enough evidence for criminal charges, but the case could be reopened with new information.
- Victims like Sergei Goshko, who lost between $70,000 and $80,000, hope the commission's action will yield progress. A hearing date is set for June 27.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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