Common warning signs
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
Wilful Blindness Book Relaunch: How a network of narcos, tycoons and Chinese Communist Party agents infiltrated the West
MLI | Charles Burton | Jun 9, 2022
On June 7, 2022, the Macdonald-Laurier Institute was pleased to host a book re-launch of Sam Cooper’s Wilful Blindness: How a network of narcos, tycoons and Chinese Communist Party agents infiltrated the West.
Opening remarks were delivered by MLI Senior Fellow Charles Burton; Dean Baxendale, Publisher at Optimum Publishing International; and Adam Chambers, Member of Parliament.
See: NCFA Response to FINTRAC’s ‘Knee Jerk’ Regulations Requiring Donation Crowdfunding Platforms to Register and Comply with AML/ATF Legislation
A panel discussion followed, focusing on money laundering, transnational organized crime, and national security. The discussion, moderated by Senior Fellow Charles Burton, featured Sam Cooper, author of Wilful Blindness; Jessica Davis, President at Insight Threat Intelligence; and James Cohen, Executive Director at Transparency International Canada.
Members of the panel touched on the malign yet sophisticated influence of the Chinese government and its agents in Canada, and how the Canadian government has chosen to address those concerns. They also debated Canada’s approach to the problem of money laundering and whether or not enough has been done to counteract it.
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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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Leaky Forms: Thousands of Popular Websites See What You Type—Before You Hit Submit
Wired | | May 11, 2022
When you sign up for a newsletter, make a hotel reservation, or check out online, you probably take for granted that if you mistype your email address three times or change your mind and X out of the page, it doesn't matter. Nothing actually happens until you hit the Submit button, right? Well, maybe not. As with so many assumptions about the web, this isn't always the case, according to new research.
A surprising number of websites are collecting some or all of your data as you type it into a digital form.
“If there’s a Submit button on a form, the reasonable expectation is that it does something—that it will submit your data when you click it,” says Güneş Acar, a professor and researcher in Radboud University's digital security group and one of the leaders of the study. “We were super surprised by these results. We thought maybe we were going to find a few hundred websites where your email is collected before you submit, but this exceeded our expectations by far.”
See: Modernizing Privacy Law in Canada – Striking the Right Balance
“In some cases, when you click the next field, they collect the previous one, like you click the password field and they collect the email, or you just click anywhere and they collect all the information immediately," says Asuman Senol, a privacy and identity researcher at KU Leuven and one of the study coauthors.
"We didn’t expect to find thousands of websites; and in the US, the numbers are really high, which is interesting,”
The researchers, who will present their findings at the Usenix security conference in August, say they were inspired to investigate what they call “leaky forms” by media reports, particularly from Gizmodo, about third parties collecting form data regardless of submission status. They point out that, at its core, the behavior is similar to so-called key loggers, which are typically malicious programs that log everything a target types. But on a mainstream top-1,000 site, users probably won't expect to have their information keylogged. And in practice, the researchers saw a few variations of the behavior. Some sites logged data keystroke by keystroke.
See: 6 lessons on online privacy and digital authentication
“The privacy risks for users are that they will be tracked even more efficiently; they can be tracked across different websites, across different sessions, across mobile and desktop,” Acar says. “An email address is such a useful identifier for tracking, because it’s global, it’s unique, it’s constant. You can’t clear it like you clear your cookies. It's a very powerful identifier.”
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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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Is Cybercrime outpacing business? Comparative earnings are…
Computer Weekly | Alex Scroxton | May 19, 2022
An expert cyber fraudster can make as much as £6m in a year, more than three times the 2020 average salary of a FTSE 100 chief executive, and even rookies are raking it in, taking home approximately £15,000 a month, according to statistics on the state of fraud and internet account security, compiled by Arkose Labs.
The firm said that if it was a country, the global fraud industry would be the third-biggest economy in the world, lagging only the US and China.
Arkose’s chief criminal officer Brett Johnson – the former “Internet Godfather” who was a key player in the operation of the ShadowCrew cyber crime collective – said it was no surprise to see how or why the underground cyber crime economy has become so large:
- The temptation for committing online fraud is higher than ever, simply because the results yield thousands, if not millions of pounds, for even the newest and most junior cyber criminals in the chain.
- Online criminals have a shopping list of opportunities available to them – everything from refund fraud to account takeover,” he said. “They can almost pick and choose which type of fraud they want to commit.
See: Is Open Sea doing enough to combat NFT fraud?
- Marketplace and messaging platforms have become vastly popularised in the fraud community, where cyber criminals can promote their own personal fraud business, recommend attack tools and techniques, and offer free step-by-step guides for the rookie fraudster.
- Given some of the lenient sentences given for cyber crime, it does make it one of the lower-risk crimes to commit, and sometimes has a suitable pay-out as well,” he says. There’s also the disconnect from the victim, making it easier on a personal level to commit the crime for some. Some may even view it as victimless, when in reality it’s not.
Arkose’s report reveals there has been a tenfold increase in people choosing the life of a career fraudster since 2019, with the introduction of furlough policies and growing unemployment during the Covid-19 pandemic the likely cause.
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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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Binance BNB Coin Takes a Hit on News of Potential SEC Investigation
Nasdaq |
Binance Coin (BNB) was down 8% this morning on news reports of a possible Securities and Exchange Commission (SEC) investigation. According to Bloomberg, investigators will probe whether Binance should have registered its initial coin offering (ICO) as a security sale. The Bloomberg report quoted anonymous inside sources, but the investigation has not been officially confirmed by the SEC or Binance.
The difference between cryptocurrencies and securities
There are various agencies involved in cryptocurrency regulation in the U.S. The Commodity Futures Trading Commission (CFTC) and the SEC both play key roles. Most cryptos currently count as commodities and come under the purview of the CFTC. But the SEC argues that some projects are actually securities, and should instead fall under its jurisdiction.
See: Amidst Regulatory Controversy Binance Launches $1 Billion Crypto Fund
The discussion over whether some cryptocurrencies are actually securities is key to several of the regulatory tangles faced by the industry. If a product is a security, it needs to follow strict rules -- for example, in how it reports information. There are also rules about how securities can be traded. If a product is a commodity, it doesn't have to abide by the same playbook.
Speaking last year, SEC Chair Gary Gensler said that many ICOs were actually securities. He argued that crypto is like the Wild West, and needs more control and more investor protection. Gensler says a number of cryptos fit the definition of an investment contract -- a type of security -- and should be subject to securities laws. "I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight," he said.
The SEC already has an ongoing court battle with one cryptocurrency -- Ripple (XRP) -- that it says operated as an unregistered security. The SEC filed charges in December 2020, accusing Ripple of failing to register its XRP token as a security. Ripple disagrees and argues that the SEC should have given much clearer instructions about what constituted a security.
What it means for investors
A SEC investigation is concerning for BNB holders, particularly as it isn't Binance's only regulatory headache. Last year, Binance had issues in various countries, including the U.K., U.S., Japan, Germany, Thailand, and others. The probe may come to nothing, but ongoing issues with various different authorities could pose a threat to BNB's long-term viability. Binance has increased its compliance team by 500% and says that it is serious about regulatory compliance. It remains to be seen whether this will prove to be too little, too late.
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Reuters | Angus Berwick and Tom Wilson | Jun 6, 2022
In Depth Reuters Investigation: Binance had no idea who was moving money through their exchange
For five years, the world’s largest cryptocurrency exchange Binance served as a conduit for the laundering of at least $2.35 billion in illicit funds, a Reuters investigation has found.
In September 2020, a North Korean hacking group known as Lazarus broke into a small Slovakian crypto exchange and stole virtual currency worth some $5.4 million. It was one of a string of cyber heists by Lazarus that Washington said were aimed at funding North Korea’s nuclear weapons programme.
See: Alberta-based Binance Canada expects to return to Ontario by 2024
Several hours later, the hackers opened at least two dozen anonymous accounts on Binance, the world’s largest cryptocurrency exchange, enabling them to convert the stolen funds and obscure the money trail, correspondence between Slovakia’s national police and Binance reveals.
In as little as nine minutes, using only encrypted email addresses as identification, the Lazarus hackers created Binance accounts and traded crypto stolen from Eterbase, the Slovakian exchange, according to account records that Binance shared with the police and that are reported here for the first time.
because of the anonymous nature of the accounts, said Eterbase co-founder Robert Auxt, whose firm has been unable to locate or recover the funds.
Eterbase’s lost money is part of a torrent of illicit funds that flowed through Binance from 2017 to 2021, a Reuters investigation has found.
During this period, Binance processed transactions totalling at least $2.35 billion stemming from hacks, investment frauds and illegal drug sales, Reuters calculated from an examination of court records, statements by law enforcement and blockchain data, compiled for the news agency by two blockchain analysis firms. Two industry experts reviewed the calculation and agreed with the estimate.
See: Fraud Prevention Month: CSA encourages Canadians to ask questions before investing in crypto assets
Separately, crypto researcher Chainalysis, hired by U.S. government agencies to track illegal flows, concluded in a 2020 report that Binance received criminal funds totalling $770 million in 2019 alone, more than any other crypto exchange. Binance CEO Changpeng Zhao accused Chainalysis on Twitter of “bad business etiquette.”
Reuters’ new reporting following the April article shows that many people who signed up to Binance in Russia weren’t using it for trading. Instead, Binance became a key payment provider for Hydra, the giant darknet marketplace, according to the blockchain data compiled for Reuters, a review of Hydra user forums, and interviews with illegal drug users and researchers.
After it was set up in 2015, Hydra distributed narcotics on behalf of drug dealers, all priced in bitcoin, to millions of buyers, mostly in Russia.
German police, in coordination with U.S. authorities, seized Hydra’s servers in Germany in April, closing the site down. The U.S. indicted a Russian resident, Dmitry Pavlov, for administering the servers. A week later, Russian authorities arrested Pavlov for allegedly dealing in drugs, a Moscow court said, adding he had filed an appeal.
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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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Do Industry Operators, Researchers, and Regulators Agree On How Big Crypto Crime Is?
Coindesk | Jack Schickler | May 9, 2022
The European Union is in late-stage talks over how to implement new rules intended to curb dodgy behavior that uses virtual assets – but estimates of the share of crypto payments linked to financial crime vary wildly from 0.15% to a whopping 46% of transaction volumes.
But attempting to get a handle on the exact scale of unlawful virtual asset activity isn’t easy. It usually relies on identifying crypto addresses that appear suspect and totting up their trade volume – but illicit users generally prefer to hide in the shadows.
See: CipherTrace August 2021 Crypto Crime Report: Crypto Fraud Dips as DeFi Hacks Grow
People in the crypto industry like to quote the figures on the lower end of the range, and on Friday, Binance’s CEO Changpeng “CZ” Zhao tweeted statistics to argue that crypto is safer than fiat. According to the U.N. Office on Drugs and Crime, money laundering through conventional finance is worth as much as $2 trillion, comparable to the total value of all the world’s crypto markets combined.
But regulators are worried not just about the overall volumes, but what they represent as a share of the crypto sector. They’ve noted how fast virtual assets are gaining popularity, and are thinking about what the scale of the problem might be in future, not just today.
In a report published in July 2021, FATF noticed significant variations in estimates of illicit crypto trades both over time and among different analysts, such as Chainalysis, Elliptic and Merkle Science – which could be, Grauer said, because they look at a different universe of transactions or currencies.
Whatever the reason, FATF believes that the analysts’ estimates of the percentage of transactions that are unlawful, which range from 0.1% to 15.4%, are all too low.
See: Senator Cynthia Lummis’ landmark crypto bill: Full Draft
This matters for live policy. In March, the European Parliament voted to introduce new checks on the identities of those making even the smallest crypto payments – including, most controversially, when transactions are made with unhosted wallets that aren’t managed by a regulated exchange.
The idea – whose details still need to be finalized with national governments – is that law enforcement would then be able to more easily track crypto transactions that could be used to fund serious crimes, such as terrorism or child pornography. But the move met with a slew of opposition from industry players such as Coinbase (COIN), who said the bill could stifle innovation and harm privacy.
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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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What do you mean NFTs can now by cloned by ‘Mimics’?
Cointelegraph Magazine | Kelsie Nabben | May 31, 2022
In the precariousness of Web3 open-source code, iterative development and “move fast” ethos, things break [and] things are also made. A new project allows anyone to create a copy of someone else’s NFT, aptly named “Mimics.”
Cloning your NFTs
Anonymous Founder, Mimics:
I think I just broke the NFT market
It turns out that art NFTs have a line of code in them called “tokenURI” or “URI” that acts like a pointer to the image being displayed. As the code is public, you can redirect your own NFT to make it look like anyone else’s. If you want your NFT to display a Cypherpunk, a Bored Ape, or how about a Pudgy Penguin?
See: After you die what happens to your digital assets and NFTs?
This means that your rare and expensive cartoon image NFT can essentially be cloned, not just by right-clicking copy-save as, and making another NFT of the same image but as a verifiable copy that has remnants of the real thing through code. Users rushing to clone a Bored Ape should beware, however:
Joni Pirovich, Crypto lawyer:
This could be a blatant breach of copyright or other IP. To determine rights that attach to the ownership of the token, and any image or metadata associated with the token, the buyer should try to identify whether any terms and conditions and any IP license applies to the ‘sale.
What does this mean?
At this stage, Mimics don’t have implications for NFTs beyond artworks (such as copying NFTs with distinct functionalities to attest to membership). Only the metadata such as name, description, media and other attributes that are provided by the tokenURI can be mimicked. Instead of being “law” to provably enforce the rules of the system, code here is the undermining factor in NFT security.
See: UK Court recognizes NFTs as ‘private property’
Mimics prove the thesis by well-known cryptographer “Moxie” that crypto lacks cryptography in some respects — referring to cryptographically secure components of the codebase that make aspects of unique ownership provable, private and/or permissioned. Ironically, someone has already used the mimic contract to copy Moxie’s NFTs. The purpose of a blockchain ledger is to prove provenance, yet it is still extremely difficult to verify that an NFT is from a legitimate artist.
Current NFT standards do the opposite of protecting your art at the code level. Maybe this article and the associated code will provide some impetus” for a future where ERC standards are improved and iterated on and become even more widely adopted. The goal is to build a better standard for their information infrastructures.
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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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Guide: How to spot potential money laundering
The UK Law Society | Jan 20, 2022
Common warning signs
Despite criminals continually adapting to changing markets and opportunities, there are signs to look for which can alert you to possible money laundering. Whether you're a fee earner or a money laundering reporting officer (MLRO), recognising signs of money laundering is a continual challenge. This guide looks at common warning signs and how to respond to them.
Unusual and secretive clients
It’s important that you make fully informed and risk-based decisions on new clients and new types of business from both new and existing clients. To help assess the risk posed by new clients, you should try to understand why they chose your firm.
See: AML laws have failed
For example:
- Why is a client who lives far from your firm contacting you in relation to a retainer which has no geographic connection to your firm?
- Why is a client instructing you in a field or type of work you have not practised in before?
- Why are foreign nationals, who are overseas residents, instructing your firm when you have no connection or profile within that country?
- Your practice should have customer due diligence (CDD) procedures in place to identify clients.
- If a client refuses to answer questions or give you information about themselves, you should consider whether this is suspicious.
Unusual transactions
Clients trying to launder funds will often try to carry out unusual transactions. The transaction may be unusual for:
- your firm
- your understanding of a client in their position
- the type of retainer they’re undertaking
See: Ottawa to review Crypto, Stablecoins and CBDCs; Budget promises more financial cops
This may not be enough to give rise to a suspicion of money laundering, but it’s a warning sign that needs to be followed up.
Unusual source of funds
- Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) requires you to scrutinise transactions to make sure that they’re consistent with your knowledge of the client.
- Large amounts of cash or private funding, even if held in a bank account, may be a warning sign of money laundering.
Third-party funding
Third-party funding is a normal feature of many conveyancing transactions and other retainers. However, it can also be a way to layer criminal property.
Sudden changes in instructions
- In challenging economic times and a fast-paced global economy, transactions can fall through and your client's instructions may change without warning.
- Ask yourself whether there's a reasonable explanation for any changes to the retainer, for example the company goes bankrupt or a couple buying a home decide to divorce.
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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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