A Twitter user by the name “Burak” (
Cryptocurrency exchange Binance temporarily suspended its blockchain network after hackers made off with around $570 million worth of its BNB token:
Sen. Elizabeth Warren, D-MA, called the peer-to-peer payments network “unsafe,” claiming Zelle users were defrauded out of $500 million last year.
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
Chainanalysis Shows Binance Processed $8 Billion Iranian Transactions Despite Sanctions
Reuters | Angus Berwick and Tom Wilson | Nov 7, 2022
Image: Retuers
Crypto giant Binance has processed Iranian transactions with a value of $8 billion since 2018 despite U.S. sanctions intended to cut Iran off from the global financial system, blockchain data show.
- Almost all the funds, some $7.8 billion, flowed between Binance and Iran's largest crypto exchange, Nobitex, according to a review of data from leading U.S. blockchain researcher Chainalysis.
See: US Treasury of Foreign Assets Control Sanctions Virtual Currency Mixer (First Time Ever)
- In August 2021, Binance announced that customers would no longer be able to open accounts and use its services without identification. But since then, the exchange has processed almost $1.05 billion in trades directly from Nobitex and other Iranian exchanges, according to the Chainalysis data, which runs to November of this year. Since Zhao's tweet in July, Binance has processed around $80 million in Iranian trades.
- The data reviewed by Reuters show that in total some $2.95 billion in crypto moved directly between Iranian exchanges and Binance since 2018.
- A further $5 billion in crypto moved between Iranian exchanges and Binance through layers of intermediaries, the data also reveal.
- Reuters is making available here the data for direct transactions since August 20, 2021, amounting to around $1 billion.
- Tron: Three-quarters of the Iranian funds that passed through Binance were in a relatively low-profile cryptocurrency called Tron that gives users an option to conceal their identities. In a blog post last year, Nobitex encouraged clients to use Tron - a mid-tier token - to trade anonymously without "endangering assets due to sanctions."
- Investigation: The new findings come as the U.S. Justice Department is pursuing an investigation into possible violations of money-laundering rules by Binance, which dominates the $1 trillion crypto industry, with over 120 million users.
See: An Analysis of Bitcoin’s Use in Illicit Finance
- Sanctions: Six lawyers and sanctions experts said the Iranian transactions documented by Reuters put Binance at risk of U.S. "secondary" sanctions, designed to prevent non-U.S. firms from doing business with sanctioned entities or helping Iranians evade the American trade embargo. Secondary sanctions can choke off a company's access to the U.S. financial system.
- Binance could also be exposed to direct "primary" sanctions if the company has what the U.S. Treasury Department calls a "nexus to the United States," the lawyers and experts said. Such links can include any U.S.-incorporated entities, or transactions processed through the U.S. financial system or using the dollar, they said. Treasury didn't respond to a request for comment.
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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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Financial Crime Compliance is Ripe for Innovation – What Banks Need to Do?
Guest Post | Ryan Jason | Nov 7, 2022
Financial crime has become a grave concern for global law enforcement authorities in the past few years. With all the emerging technologies and rapid digitization, all financial operations are becoming digital, ultimately making space for cybercriminals. Banks are thought to be an essential pillar of any economic setup, and in the modern system, all jurisdictions rely on them to accomplish their monetary targets. Due to the influx of revenue in banking sector, it has become a hotspot for criminals who are looking to carry out multiple scams like money laundering, identity theft, and terrorist financing.
In Canada alone, consumers lost $379 million in 2021 to various online fraud, which is an increase of 130% compared to the previous year. This surge in crime percentage has led the authorities to find an effective solution to countering fraudsters and report them to law enforcement agencies. It is estimated that the financial industry spent an average amount of $37.1 billion in 2021 on Know Your Customer (KYC) and Anti-Money Laundering (AML) systems. While the banks have their own systems, it's seen as a big opportunity for fintechs who are using innovative tools and approaches that can augment bank KYC etc.
Prevailing Financial Crimes in Banking Sector
Although the banking system has become quite advanced in the past few years, criminals are also using intelligent techniques to defraud it and carry out financial crimes. Money laundering, terrorist financing, identity theft, and other monetary scams are the most prevalent crimes in the banking sector. Almost all the banks are offering their users to perform transactions using mobile apps or websites, for which they have to input their sensitive details to log in to the system. As soon as the consumers enter their information, they get exposed to cyber criminals who can further use their details to take over their accounts or make new ones on their names to carry out their illicit motives.
See: Know Your Customer – and your Obligations – in the age of Real-Time Rails and Open Banking
Money laundering is another prominent issue that has engulfed the banking sector. In 2019 alone, 60.5% banks were fined due to anti-money laundering regulations violations, costing $10 billion. Global financial watchdogs, particularly Financial Action Task Force (FATF) and Interpol have formed a comprehensive AML framework for the banking industry to counter money launderers. Law enforcement authorities have found a lot of cases where terrorists have been found to use laundered money in various heinous crimes. This has intensified the overall situation and urged global agencies to implement the perfect solution to make this world a secure place.
How Banks are Ensuring Compliance
Banks are making considerable investments to integrate KYC/AML solutions, the latest fraud preventive innovations from Fintech. Know Your Customer (KYC) measures encompass biometric verification of users in real-time and further comparing these details with the ones on their documents. In this way, the system becomes efficient enough to identify the fraudsters while restricting them during onboarding. Moreover, to ensure AML compliance, financial institutions usually screen their users' data with the one accumulated by FATF and other agencies in the form of sanctions lists. In case of any same name, they report to the concerned authorities to track the criminal down.
Financial Crime Compliance - A Step Towards Innovation
All financial institutions, particularly banks, insurance companies, and crypto exchanges, need AML and KYC solutions to make their operations secure for users. With criminals using more advanced techniques to defraud the system, Fintech companies are also investing in developing more accurate solutions to counter scammers. KYC practices, including thumb verification, facial recognition, and document authentication, are evolving daily. Video and Perpetual KYC are prime examples of innovation that have developed as a result of financial compliance in the banking sector. So it would not be wrong to say that while accepting the global KYC/AML standards, the sector has embraced huge innovation and opened new doors to identify criminals.
How the Pandemic Helped the Companies to Embrace Transformation
The COVID-19 pandemic proved to be a turning point in the global digital transformation when a large number of businesses were forced to shift their operation on the internet due to lockdowns. With this rapid digitization, cybercriminals rigorously started their fraudulent activities exploiting loopholes in the nascent system. It is estimated that digital scams increased by 72% during the pandemic, and this surge in illegal activities urged the authorities to counter scammers through advanced screening solutions.
See: The investigator-centered approach to financial crime: Doing what matters
Although the pandemic's effects are now diminishing worldwide, it has helped a lot in achieving innovation in security measures which ultimately aid in countering criminals and bringing them under the law. So it would not be wrong to establish that financial crime compliance has played a considerable role in adopting the most innovative concepts of screening measures.
The Role of Fintech Companies in Enforcing Screening Measures
Fintech is the sector that has suffered huge setbacks from cybercrimes, but it managed to counter scammers by finding innovative solutions like Anti-Money Laundering (AML) and Know Your Customer (KYC). With the passage of time, these screening services keep on improving and become smart enough to counter the advanced techniques of fraudsters. Currently, all the security measures are powered by AI algorithms and efficient enough to provide results in a matter of seconds with the highest level of accuracy.
Final Thoughts
Combating financial crimes, particularly money laundering, identity theft, and terrorist financing, is quite crucial for ensuring transparency in the banking sector. A large number of financial operations have already been digitized, and time is not far away when the whole economic system will be working online, which will surely increase cybercrime. As criminals are using advanced techniques with time, it is the need of the hour to find more innovative solutions to counter the prevalent scams and report all the bad actors to law enforcement authorities. Fintech has successfully achieved this target so far and controlled the fraudsters to a large extent.
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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Anti-fragility: Single Lightning Transaction Sends Network into Turmoil
CoinDesk | Frederick Munawa | Nov 2, 2022
A Twitter user by the name “Burak” (@brqgoo) sent a large swath of the Lightning Network into turmoil on Tuesday morning, when he allegedly created a non-standard Bitcoin transaction that prevented users from opening new Lightning channels (connections between Lightning nodes).
- Anti-fragility: Burak’s shenanigans disrupted a good chunk of the Bitcoin and Lightning ecosystems. Nevertheless, one could argue the community’s anti-fragility was on full display. Core Lightning (CLN) nodes that rely on Bitcoin Core, the most popular implementation of Bitcoin, were unaffected (although this seems to have been by design). Additionally, the bug Burak exploited was quickly patched (thanks to Elle Mouton and Oliver Gugger).
- Bug handling going forward: Burak’s actions not only sparked lively exchanges on Twitter, but also raised a key question – how should the Bitcoin community handle similar exploits in the future?
See: Lyn Alden Analysis: A Look at the Lightening Network
- “It's always hard to prepare against a novel bug. I guess more review and bug bounty programs for responsible disclosure may help.” Pickhardt weighed in.
- “However, as I understand, Pieter Wuille thinks there may sometimes be a risk in fixing bugs, as that may raise awareness and attract potential malicious actors in the transition phase while nodes update."
- It'd be reasonable to assume that exploiting this needed cooperation from miners (or ones with non-standard mempool/relay policy at least), making it harder to pull off. And fixing this one-line without raising suspicion is hard,” Wuille tweeted.
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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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Hackers Made Off with $570 Million Worth of BNB Token
CNBC | Ryan Browne | Oct 7, 2022
Cryptocurrency exchange Binance temporarily suspended its blockchain network after hackers made off with around $570 million worth of its BNB token:
- Binance said late Thursday a cross-chain bridge linking with its BNB Chain was targeted, enabling hackers to move BNB tokens off the network.
- The company said it had worked with network validators — entities or individuals who confirm transactions on the blockchain — to pause creation of new blocks on BSC, suspending all transaction processing while a team of developers investigates the breach.
- "The issue is contained now. Your funds are safe. " BNB Chain has since resumed operations.
- Smart contract bug: The hack was caused by a bug in the bridge’s smart contract that allowed hackers to forge transactions and send money back to their crypto wallet, according to crypto security firm Immunefi.
See: Caution: Binance Chain Red Alarm System Flags 50 New Projects as Potential Scams
It is the latest in a series of major hacks targeting cross-chain bridges, with instances of sloppy engineering making them a prime target for cybercriminals. Adrian Hetman, tech lead of the triaging team at Immunefi:
As with many bridge designs, there is one central point that holds most of the funds that are moving through the bridge. Ultimately, the Bridge was tricked into giving funds from that contract.
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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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Mastercard Launches ‘Crypto Secure’ Powered by CipherTrace to Combat Fraud-prone Crypto Exchanges
CNBC | Ryan Browne | Oct 4, 2022
Image: Pexels/Pixabay
Mastercard launches fraud detection software: 'Crypto Secure'
- Why: Mastercard will on Tuesday debut a new piece of software that helps banks identify and cut off transactions from fraud-prone crypto exchanges, the company told CNBC exclusively. It already uses similar technology to prevent fraud in fiat currency transactions. With Crypto Secure, it's expanding such functionality to bitcoin and other virtual currencies.
- Ajay Bhalla, Mastercard's president of cyber and intelligence business, said the move was about ensuring its partners can "stay compliant with the complex regulatory landscape."
- Despite the slump in digital token prices, crime in the industry has shown no signs of abating.
See: Digital Asset Classification vs Wire Fraud: What’s the Most Powerful Law in Crypto Right Now
- Called Crypto Secure, the system uses "sophisticated" artificial intelligence algorithms to determine the risk of crime associated with crypto exchanges on the Mastercard payment network. The system relies on data from the blockchain, a public record of crypto transactions, as well as other sources.
- The service is powered by CipherTrace, a blockchain security startup Mastercard acquired last year. Based in Menlo Park, California, CipherTrace helps businesses and government agencies investigate illicit transactions involving cryptocurrencies. Its main rivals are New York firm Chainalysis and Elliptic, which is based in London.
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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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Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud Handling
BankingDive | Anna Hrushka | Sep 23, 2022
Sen. Elizabeth Warren, D-MA, called the peer-to-peer payments network “unsafe,” claiming Zelle users were defrauded out of $500 million last year.
“You have created a perfect weapon for criminals to use and they have used it and you have not stood behind your customers,” she told the witnesses, which included the CEOs of JPMorgan Chase, Bank of America, Wells Fargo, Citi, Truist, PNC and U.S. Bank.
- Zelle, a network designed to compete with P2P fintechs such as Venmo and Cash App, is owned by six of the seven banks represented at Thursday’s Senate Banking Committee hearing.
- Senate Democrats on Thursday pressed the CEOs of the nation’s largest retail banks to answer for scams associated with Zelle, a bank-owned peer-to-peer payments network, calling for the institutions to implement policies to protect and redress customers defrauded through the platform.
See:
Asset Managers, Banks Are Tightening Controls of Communication Tools like WhatsApp
Some New Banking Rules Implemented to Protect Consumers in Canada
- In a joint letter sent to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra in April, the Democratic lawmakers called on the regulator to expand the definition of “error payments” to include payments a consumer makes to a scam artist. The lawmakers also called for the CFPB to issue guidance that would place the burden on banks to make consumers defrauded by such transactions whole.
- JPMorgan CEO Jamie Dimon, who is no stranger to fiery exchanges with Warren, said his bank reimburses customers whose accounts have been hacked, a policy banks follow under Regulation E. Anything that’s unauthorized, we do cover,” Dimon told the senator, adding the amount of fraud on Zelle is “relatively small.”
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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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a16z Leads $51.5M Series B to Catch Fishy Fintech Transactions
TechCrunch | Anita Ramaswamy | Sep 20, 2022
Image: Unsplash/Oziel Gómez
Sardine announced it has raised $51.5 million in a Series B round led by Andreessen Horowitz’s (a16z) Growth Fund after closing $19.5 million for its Series A earlier this year. “Faster instant payments mean faster fraud,” Sardine CEO and co-founder Soups Ranjan told TechCrunch. That’s the thesis behind his startup, which uses behavioral, financial and device-specific user data to detect fraud on behalf of its clients in the crypto and fintech industries.
- Growth: Sardine has grown considerably since it announced the Series A back in February, growing its roster of clients from ~50 to ~135 today, Ranjan said. Its customers include crypto exchanges FTX and Blockchain.com as well as fintechs with broader mandates such as Wealthsimple and Digit, he added.
See: Consumer Protection: Fintech Complaints Have Been Rising
- Differentiators:
- Sardine’s differentiation in the market as stemming from his team’s experience and the company’s focus on fintechs.
- Another major differentiator from competitors like Socure is its instant ACH and card onramp to crypto, which allows its customers to purchase over 30 different crypto assets instantly.
- Banks and card issuers typically use fraud detection algorithms for crypto that aren’t nearly granular enough. Around half of the customers who attempt to transact using fiat-to-crypto onramps through traditional platforms are declined as fraudulent.
- It also offers direct fiat to NFT checkout in partnership with Tom Brady’s company, Autograph, and plans to expand that product to other NFT marketplaces, according to Ranjan.
- Competition: Sardine does have competition from other startups in the identity-verification space, such as Socure, which told TechCrunch last year that it counts three of the top five global banks as customers.
See: Microsoft announces plan to cut cybersecurity workforce shortage in half by 2025
Soups Ranjan, CEO and co-founder Sardine:
One of the reasons why folks haven’t dabbled or launched ACH to crypto, or even direct ACH to NFT, has been that there is no one [else] taking on the fraud risk liability. The platform allows customers to access some, but not all, of their crypto instantly. Sardine is taking on the fraud risk. [The transaction] typically settles into two-plus days, so for that period of time, we’re taking on the settlement risk, and we’re taking on the third-party fraud risk, as in, if somebody connects a stolen bank account.
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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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