Be an informed investor - Don't be fooled by fraudsters misrepresenting themselves
The digital marketplace for NFTs grew to an estimated $22bn last year but companies face challenges monitoring stolen art
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
Wormhole Portal Exploit: Hackers Steal Nearly $320 Million of Wrapped ETH
Finance Magnates | Bilal Jafar | Feb 3, 2022
In one of the largest crypto thefts of all time, Wormhole Portal, a bridge between Solana (SOL) and other blockchains, was exploited for approximately 120k wrapped ETH. The total value of the stolen crypto assets currently stands at around $320 million.
Wormhole has offered a bounty worth $10 million to hackers to return the funds. According to the company, its relevant department is working to resolve the issues.
See: Crypto.com $34 million stolen in user account hack | Data Breach Lessons
“The wormhole network was exploited for 120k wETH. ETH will be added over the next hours to ensure wETH is backed 1:1. More details to come shortly. We are working to get the network back up quickly. Thanks for your patience,” Wormhole mentioned in a recent Tweet.
"Similar to previous large-scale DeFi hacks, potential victims and donation-seekers have begun to send the hacker on-chain messages through Ethereum transactions. These have ranged from small transfers of worthless tokens or those seeking donations using blockchain names such as 'hackerplsdonate.eth' to get the hacker's attention. One individual claimed to have lost $100,000 in the hack. This adds to the more than $2 billion in direct losses suffered by DeFi services due to hacks and exploits,” Elliptic highlighted.
DeFi hacks are surging. With growing popularity and adoption, the decentralized finance sector has seen a jump in theft and scams during the past 12 months. In January 2022, DeFi protocol Qubit Finance was attacked, and the network suffered a loss of nearly $80 million.
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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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IIROC Investor Alert: Hashminer.io
IIROC | Feb 9, 2022
Be an informed investor - Don't be fooled by fraudsters misrepresenting themselves
February 9, 2022 (Toronto, Ontario) – The Investment Industry Regulatory Organization of Canada (IIROC) is warning Canadian investors not to be fooled by Hashminer.io.
Investors have recently contacted IIROC asking about companies that claim to require account insurance through regulatory bodies like IIROC, including companies doing business as Hashminer.io or possibly as SaveFunds-Trading.com.
IIROC-regulated investment firms and individuals must meet our high standards and deal fairly, honestly and in good faith with Canadian investors. We urge Canadian investors to exercise caution when dealing with non IIROC-regulated firms.
IIROC also does not play a role in providing insurance or approving withdrawals from investor accounts. Any company asking for payment or to increase the amount on deposit with them before approving a withdrawal is likely fraudulent.
See: IRS Special Agent “Seeing ‘Mountains Of Fraud in Cryptocurrencies, NFTs”
Certain crypto assets have generated a lot of hype. All investors must be informed and ask themselves important questions before purchasing higher-risk investment products that do not trade on stock exchanges.
Canadian investors should always confirm investment firms are registered with IIROC or with the CSA.
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 Open Sea doing enough to combat NFT fraud?
The Guardian | Lois Beckett | Jan 29, 2022
The digital marketplace for NFTs grew to an estimated $22bn last year but companies face challenges monitoring stolen art
Van Baarle is a popular digital artist, with millions of followers on social media. She’s one of a growing number of artists who have had online images of their art stolen, minted as unique digital assets on a blockchain, and offered up to trade in cryptocurrency on the NFT platform OpenSea.
The rise in such thefts comes as the market for non-fungible tokens, or NFTs, exploded last year, growing to an estimated $22bn, attracting Sotheby’s and Christie’s, and driving multimillion-dollar auctions for these new certificates of ownership of digital assets.
See: NFT Boom Will Surely Lead to Questions Over Copyright, Control and Plagiarism
OpenSea has grown at a dizzying pace, and is now valued at $13bn. But amid its spectacular rise, the company is doing far too little to prevent the trade in fraudulent NFTs, some artists charge, and is placing much of the burden of policing art fraud on the artists themselves.
OpenSea said in a statement: “It is against our policy to sell NFTs using plagiarized content,” adding that it regularly delisted and banned accounts that did so. The company said it was working to build new image recognition and other tools that would quickly recognize stolen content and protect creators, and that it planned to launch some of them in the first half of this year.
A boon and nightmare for artists
“We’re in an incredible mushrooming of opportunity for digital artists,” said Schachter. “It’s 1,000% better than a year ago, two years ago, when there was no marketplace for any of this art.”
But other artists say that the past year’s crypto boom has been a nightmare. Among the problems is that anyone can “mint” a digital file as an NFT, whether or not they have rights to it in the first place, and the process is anonymous by default.
See: Are NFTs More Than Just Art?
“It is much easier to make forgeries in the blockchain space than in the traditional art world. It’s as simple as right-click, save,” said Tina Rivers Ryan, a curator and expert in digital art at the Albright-Knox gallery in Buffalo, New York. “It’s also harder to fight forgers. How do you sue the anonymous holder of a crypto wallet? In which jurisdiction?”
‘How much of their valuation is from stolen art?’
Aja Trier, a Texas-based artist who has found viral fame for painting riffs on Van Gogh’s Starry Night featuring various breeds of dog, said she discovered 87,000 NFTs based on images of her work for sale on OpenSea, many of them priced at $9.88 each.
See: Walmart Files Several Crypto, NFT and VR Gaming Patents
Trier said 500 listings of her stolen work were added in a single night, suggesting the theft was being automated and carried out by bots.
More than half of the company’s current staff works either full-time or extensively on issues of plagiarism and content moderation, OpenSea said:
[We are] developing “smart moderation” tools to speed up the company’s response to reports of plagiarism.
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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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In the face of wreckage, DeFi’s self-policing shines
Arca | Jeff Dorman | Jan 31, 2022
The Chief Financial Officer of popular decentralized finance (DeFi) protocol Wonderland was revealed as a convicted scammer and former executive of Quadriga. Michael Patryn, who went by the pseudonymous handle “Sifu” and worked directly with prominent DeFi founder Dani Sestagalli, had oversight over a treasury of nearly $1 billion. Though this story is about one individual and one DAO, the ripple effects were felt across DeFi because of the interconnectedness of DeFi applications and the immense influence of a handful of really successful DeFi developers and founders (like Sesta).In a very abridged summary, MIM, the asset-backed stablecoin of the Abracadabra protocol, has a massive MIM-UST pool on Curve—the decentralized exchange that focuses on stablecoin trading. These incentivized Curve pools accounted for most of the minting of UST (the stablecoin of the Terra Luna/Anchor protocol ecosystem), whose rapid growth ($11 bn outstanding) helped drive the price of LUNA higher over the last several months. As LPs pulled assets out, TVL across Terra Luna dropped, as did the price of LUNA, and Curve’s TVL dropped as well, while all of the tokens in the Abacadabra/Sesta ecosystem (SPELL, TIME, ICE) fell 30-70%. Meanwhile, prediction markets popped up, betting that UST will lose its peg.
See: Gerry Cotten’s widow speaks out over his death and millions of missing crypto
Dealers were inundated with UST put buyers, and FTX even spun up a UST perpetual future market so traders could short UST. SUSHI, a completely unrelated DEX that was in the process of integrating Sesta and his team (but had not yet begun), also became part of the collateral damage. A historical chain of events that led to billions in losses started with the doxing of an individual. He indeed committed terrible crimes, but as of this writing, he has not been accused of any wrongdoing concerning all of the assets/projects mentioned above.
But here’s where it gets positive. Bad things occasionally happen in digital assets, just like corporate fraud in traditional markets (Madoff, Enron, Worldcom, Theranos, etc.) The difference is that corporate scams are usually elaborate and go on for years before being uncovered. By contrast, in digital assets, most of these events rise and fall within weeks, and any wrongdoings are discovered immediately by amazing DeFi onchain detectives (like those that identified SiFu’s misdeeds). That cannot be understated: the onchain detectives of DeFi are doing exceedingly more positive and real-time self-policing of this industry than any regulator will be able to do.
See: NASAA: Crypto scams are the leading threat to investors in 2022
As a result, most of the issues within DeFi are either very easy to avoid with even a shred of due diligence or discovered immediately due to the public records of blockchain. Thus, simple rules of thumb can be:
- Don't buy things you don't understand
- Understand who the founding teams are and their motivations
- Be careful engaging with super early-stage products without a long track record
- Listen when someone uncovers some important data
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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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IRS Special Agent “Seeing ‘Mountains Of Fraud in Cryptocurrencies, NFTs”
ComplianceX | Jack Kelly | Jan 31, 2022
Speaking at a virtual event held on Tuesday by the USC Gould School of Law, Ryan Korner from the IRS Criminal Investigation’s Los Angeles field, said that both NFTs and cryptocurrencies are becoming a growing area of concern for regulators and tax collectors as they’ve steadily become more mainstream.
Korner said, according to Bloomberg:
“We’re just seeing mountains and mountains of fraud in this area”
Due to their rising popularity, regulators are struggling to police how the tokens are used and prevent them from being utilized for criminal activity such as fraud, money laundering, market manipulation, and tax evasion.
In December, former First Lady Melania Trump released her first NFT and launched a new platform that will release NFTs regularly, called “Melania’s Vision.”
See: NFT Marketplace exploit leads to catastrophic losses for some collectors
Including award-winning director Quentin Tarantino and electronic music artist Deadmau5.
The IRS Criminal Investigation Unit seized $3.5 billion in cryptocurrency during fiscal year 2021, which accounted for 93 percent of its criminal investigation seizures, according to the agency’s annual criminal investigation report published in November (pdf).
Korner said the unit ended the year with active 80 cases in its inventory where the primary violation was tied to cryptocurrencies, and that the unit is working to train all of its staff on the issues surrounding cryptocurrencies and NFTs, acknowledging that “this space is the future.”
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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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Your Business Needs Insurance
Foley | Andre Thiollier Louis Lehot | Jan 20, 2022
Many startups perceive insurance as a luxury, shelving it until they are further along in the company's lifecycle. However, any business serious about sustainable growth should not postpone this decision.
There is always a risk is involved in the process of starting and growing a company. Having adequate insurance is key to the success of your business and an issue every business owner needs to consider. Business insurance for startups provides valuable protection against the unexpected. Without coverage, threats like theft, fire, data breaches, or lawsuits could disrupt or damage your business.
See: Current cyber insurance model is broken and ripe for data-driven change
Once you understand how insurance is vital to your business, you will be better positioned to determine how much of it you need. Business owners must weigh the cost of insuring against various risks and the economic impact of an uninsured loss.
The Law Requires it
The Law requires businesses with employees to have certain types of insurance: Unemployment, workers' compensation, and disability are a few.
Failure to carry required coverage could result in fines, penalties, and "cease and desist" orders.
You Could Get Sued
If a liability claim or a lawsuit is filed against you and your business is without insurance, there could be serious and very costly implications. Public Liability Insurance protects your business against claims resulting from bodily injury or property damage to third-parties. Even winning could cause you to go out of business due to the cost of legal defense. Liability insurance allows you to concentrate on what you do best, running a profitable business.
Insurance Keeps You Up and Running
What happens if your business is affected by an earthquake or flood? P&C insurance covers loss of property, equipment, etc., income lost during a business closure. Business Owners Insurance (BOP) can play a critical role and help a company survive protecting against income loss. BOP also compensates for everyday operating expenses you may have otherwise incurred during that time. Some companies choose to insure lost income and include protection to pay employees for up to 12 months.
Required in Contracts
Some variables come into play when it comes to insurance and contracts: If you lease or rent, the landlord's policy may not cover you, and you may need to carry insurance. The loan agreement likely contains an insurance requirement if you borrow money to finance buildings, equipment, or operations. Client contracts could specify that you carry insurance.
See: Synthetic Media and Deepfakes: An insurance industry threat
Common types of insurance businesses should consider:
Workers’ Compensation Board (WCB)
Your business is growing. How do you know if it is time to protect it with workers' compensation insurance? Most business operations will be required to have workers' compensation coverage. This covers workers' medical and wage-loss costs if an employee is injured or contracts an occupational disease while on the job.
Technology Errors & Omissions Insurance: A startup providing professional services based on professional expertise should consider E&O insurance which protects against claims that allege damages arising from technology services you have provided. Your customers and partners may even require 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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Crypto.com $34 million stolen in user account hack | Data Breach Lessons
AIThority | | Jan 24, 2022
Crypto.com is the latest victim of a data hack incident that may have well jeopardized cryptocurrencies worth over $30 million from 400+ user accounts. What’s worse, the reputation of this company could be permanently tarnished due to this incident! It’s true that crypto companies are among the worst-affected digital companies as reported in our data breach updates.
See: Security advice for emerging tech companies and investors
Last week, Crypto.com’s CEO Kris Marszalek admitted in an interview that some of the security layers were breached resulting in loss of data of 400+ users. While the CEO acknowledged that the leak was controlled within 13-14 hours, users could well have lost over $30 million in Bitcoin and Ethereum after a hack that took place on Jan. 17, 2022.
JUST IN: CEO @cryptocom’s Kris Marszalek discusses the site's recent hack with @BloombergTV’s @emilychangtv. "Customer funds were never at risk." #TheYearAhead pic.twitter.com/YlCtGO60t5
— Bloomberg Live (@BloombergLive) January 19, 2022
Continue to the full article and DATA BREACH lessons --> here
City A.M. | Lily Russell-Jones | Jan 20, 2022
Crypto.com admits $34m stolen from user accounts in hack
Trading platform Crypto.com has admitted that $34m (£24.9m) was stolen from user accounts by a hacker.
The hack affected 483 customer accounts which were later compensated by the exchange platform, according to an update published today. Crypto.com said that unauthorised withdrawals totalled 4836.26 ether ($15.2m), 443.93 bitcoin ($18.7m) and $66,200 in US dollars.
See: Crypto fraud and breaches on pace to exceed $3 billion in 2021
In response to the theft the crypto exchange has rolled out a Worldwide Account Protection Program (WAPP) in order to insure customer investments up to a limit of $250,000.
“While we are reminded of the existence of bad actors intent on committing fraud, this new Worldwide Account Protection Program, along with our new MFA infrastructure, gives our users unprecedented protection of their funds, and hopefully, peace of mind,” he added.
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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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