Overview
Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion over the course of the year, up from $7.8 billion in 2020. BUT those numbers don’t tell the full story.
CoinRise Ltd. is not registered to trade or sell securities or derivatives in Saskatchewan, authority says
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
NFT Marketplace exploit leads to catastrophic losses for some collectors
Yahoo Finance | | Jan 24, 2022
An API issue on popular NFT marketplaces OpenSea and Rarible has led to NFT collectors incurring massive losses on their prized Bored Apes and Cool Cats.
The error was caused by NFT collectors incorrectly cancelling their listings on OpenSea by opting to transfer their assets to another wallet in an attempt to avoid paying cancellation fees, which can fetch up to $100 based on gas prices.
This method was assumed to have ‘cancelled’ the listing as it no longer showed as ‘listed’ on the front end of OpenSea’s user interface.However, the listings were still accessible as older ‘listings’ on alternative marketplace Rarible, which uses data from the OpenSea API to list and display NFTs for sale.
See: ‘Evolved Apes’ NFT creator Evil Ape disappears with $2.7M
Over time, collectors began transferring their NFTs back to the original wallet. Now, unbeknownst to them, their prized assets were again purchasable for unbelievably low prices as the listings were still ‘valid’ on Rarible.
As collectors began to transfer their NFTs back to the original wallet, the listings remained ‘open’ on Rarible as the blockchain still recognised that the NFT was listed at the original listing price.
However, collectors still began losing their prized assets for unbelievably low prices as the OpenSea front end showed that the listings had been cancelled and were no longer available, meaning that they remained oblivious that their prized assets were still purchasable, leading to catastrophic losses for a select few.
The exploit started early this morning with a number of below-market-value purchases from OpenSea user ‘jpegdegenlove‘ for three Bored Apes, two Mutant Apes, a Cool Cat and a Genesis CyberKongz NFT.
See: Is Web 3 the best of Web1 + Web2?
It’s now believed that the exploiter interacted directly with smart contracts to ‘bypass’ the OpenSea interface and discover the listings that were still available for purchase ‘on-chain’ – thus making them purchasable without the holders being aware.
The person behind the exploit, ‘jpegdegenlove’, has managed to gain around 332 ETH ($737k) following the exploit
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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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US Government Accountability Office Urges Crypto Regulations to Counter Human Trafficking and Drug Cartels
Mayer & Brown |Sean P. McDonnell and Gina M. Parlovecchio | Jan 13, 2022
Overview
- On January 10, 2022, the US Government Accountability Office (“GAO”) issued an 84-page report warning of the role that virtual currencies continue to play in human and drug trafficking and urging tighter regulation of certain kinds of virtual currency transactions.
- The report specifically identifies gaps in registration requirements for virtual currency kiosks—commonly described as “Crypto ATMs”—that may hamper law enforcement’s ability to investigate money laundering, drug and human trafficking and other criminal activity.
See: SEC Regulation: Constructing a Crypto Regulatory Framework – New Tech, Old Rules
- To address this issue, GAO recommends that the Financial Crimes Enforcement Network (FinCEN) and Internal Revenue Service (IRS) review the existing registration requirements applicable to virtual currency kiosks and begin to require additional data from registered kiosk operators.
- Given GAO’s role as a key federal watchdog agency, its report is likely to further bolster ongoing efforts by the Biden administration and the US Treasury Department to implement more stringent regulations of virtual currencies across a variety of settings.
- Clients who are operating or considering operating money services businesses that facilitate virtual currency transactions should be building compliance programs and enhancing internal controls now to anticipate and prepare for increased regulatory and law enforcement scrutiny.
Looking forward
Based on the foregoing, we anticipate that FinCEN, IRS and other components of the US Treasury Department will continue to ramp up regulatory scrutiny of virtual currency exchanges and kiosk operators, including by strengthening existing MSB registration requirements. We also expect federal law enforcement agencies will devote increasing amounts of resources to examining those operators that they perceive to be skirting the rules.
See: US House Committee on Financial Services Provides Insight into Regulatory Needs of Crypto Industry
Indeed, the DOJ has already begun to criminally charge unlicensed operators of virtual currency kiosks who fail to meet FinCEN and US Treasury’s registration and reporting requirements. Clients who are operating or considering operating MSBs that facilitate virtual currency transactions should be building compliance programs and enhancing internal controls now to anticipate and prepare for this increased regulatory and law enforcement scrutiny.
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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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Last year, illicit crypto addresses received all-time-high $14 billion but that was only 0.15% of total volume
ChainAnalysis | Jan 6, 2022
Cryptocurrency-based crime hit a new all-time high in 2021, with illicit addresses receiving $14 billion over the course of the year, up from $7.8 billion in 2020. BUT those numbers don’t tell the full story.
Cryptocurrency usage is growing faster than ever before. Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s totals. Given that roaring adoption, it’s no surprise that more cybercriminals are using cryptocurrency. But the fact that the increase was just 79% — nearly an order of magnitude lower than overall adoption — might be the biggest surprise of all.
In fact, with the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.
See: NASAA: Crypto scams are the leading threat to investors in 2022
Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever.
However, we also have to balance the positives of the growth of legal cryptocurrency usage with the understanding that $14 billion worth of illicit activity represents a significant problem. Criminal abuse of cryptocurrency creates huge impediments for continued adoption, heightens the likelihood of restrictions being imposed by governments, and worst of all victimizes innocent people around the world.
DeFi’s rise leads to new opportunities in crypto crime
In 2020, just under $162 million worth of cryptocurrency was stolen from DeFi platforms, which was 31% of the year’s total amount stolen. That alone represented a 335% increase over the total stolen from DeFi platforms in 2019. In 2021, that figure rose another 1,330%.
See: Blockchain Vulnerabilities, Forensics And Legal Challenges
We’ve also seen significant growth in the usage of DeFi protocols for laundering illicit funds, a practice we saw scattered examples of in 2020 and that became more prevalent in 2021. Check out the graph below, which looks at the growth in illicit funds received by different types of services in 2021 compared to 2020.
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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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NASAA: Crypto scams are the leading threat to investors in 2022
Investment Executive |James Langton | Jan 10, 2022
Frauds and scams involving crypto and other digital assets are the leading threat to investors in 2022, according to the North American Securities Administrators Association (NASAA).
The umbrella group of U.S. state and Canadian provincial regulators released its annual list of the top investor protection concerns, based on surveys of the regulators themselves.
See: Over 400 SEC new enforcements in 2021 including Crypto, Dark Web, DeFi targets
Schemes that are linked to crypto (and digital assets generally) were the leading issue, followed by promissory notes frauds, social media scams, and schemes targeting self-directed retirement accounts.
Joseph Borg, Alabama Securities Commission director and co-chair of NASAA’s enforcement committee, said in a release:
“By far, NASAA’s securities regulators revealed that investments related to cryptocurrencies and digital assets is our top investor threat”
NASAA said that the added uncertainty about where digital assets fit within the traditional regulatory framework may make it easier for fraudsters to dupe investors.
“Before you jump into the crypto craze, be mindful that cryptocurrencies and related financial products may be nothing more than public facing fronts for Ponzi schemes and other frauds,” said Joseph Rotunda, Texas State Securities Board enforcement division director, and vice-chair of NASAA’s enforcement committee.
Chain Analysis: Illicit crypto activity reaches all-time high BUT total Crypto activity growing faster
“The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk. It is important for investors to understand what they are investing in and with whom they are investing,” said Melanie Senter Lubin, president of NASAA and Maryland Securities Commissioner.
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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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Fintech Cybersecurity Best Practices
Tech Bullion | Angela Scott-Briggs | Dec 27, 2021
Hacking attacks and data theft are more rampant than ever. So cybersecurity is a crucial concern for modern businesses. While threats prevail in all domains, fintech companies need to be extra cautious. You cannot undermine security risks at any point because you hold the financial information of customers. A single vulnerability in your systems is all a hacker needs to get through. They can steal data and money, causing your business to lose customer trust and reputation in the long run.
See: Remote Working Cybersecurity Checklist
The pandemic has brought financial technology to the forefront as electronic payment systems, mobile transfers, and automated and algorithmic trading are the need of the hour. Not surprisingly, businesses offering these services need to go the extra mile with cybersecurity. But most organizations fail to do it because they simply have no idea securing their data, applications, and systems. At a minimum, protect your privacy by using a canadian vpn service. Here are some best practices to keep your business on the safe side.
Prioritize identity and access management
Large fintech companies often struggle to maintain transparency about access to their systems and networks. You cannot rely on manual access management processes as they are time-consuming and risky with ever-changing teams. Integrating an innovative identity and access management system keeps your business secure in the long run. You can depend on it to protect your company from internal threats and cyber attackers. For example, you can use AI technology for online document verification. It lets you eliminate illegitimate documents and prevent unauthorized access and fraudulent activities.
Secure the cloud
Most fintech applications run on the cloud. It is both an opportunity and a risk for businesses. While you can deliver seamless services to your customers on the cloud, it exposes your data and security to attacks. An expanded attack surface can be daunting for any business. Thankfully, implementing a robust cloud security strategy provides the coverage you need to secure your company and customers. Securing the cloud fortifies your business today and even as new threats emerge over time.
Perform architecture and code review
Fintech applications are perhaps the most vulnerable aspect of your business. But you can secure them with proper architecture and code review. Ensure that you define the security requirements and features of the product to your development team before they write even a single line of code.
See: Quantum computers could crack the cryptography that underpins financial stability
Remember that you should never compromise security at the cost of convenience. Collaborate with a code review team to get flawless applications that deliver only the best to your customers. It takes a massive effort to go through the entire code, but it is worthwhile.
Invest in proactive security assessments
Fintech companies can go the extra mile with cybersecurity by investing in proactive security assessment. Hackers are always at large, so you must do your bit to stay one step ahead. Surprisingly, experts recommend you hire a hacker to do so, though this professional must be an ethical one. They can perform penetration tests on your systems and applications to detect the vulnerabilities therein. Even better, they can suggest relevant measures to patch these flaws and ensure safety in the long run. Knowing that hackers have no way to proliferate your systems gives you peace of mind.
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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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[Alert]: Saskatchewan’s consumer affairs authority issues warning about crypto platform CoinRise
CBC | Dec 27, 2021
CoinRise Ltd. is not registered to trade or sell securities or derivatives in Saskatchewan, authority says
The Financial and Consumer Affairs Authority of Saskatchewan has issued a warning about a cryptocurrency platform, which claims to be based out of Regina.
The online trading platform CoinRise Ltd. is not registered to trade or sell securities or derivatives in Saskatchewan, according to the warning issued on Dec. 22.
CoinRise Ltd. did not respond to CBC News requests for comment about the financial consumer affairs authority warning.
See: Over 400 SEC new enforcements in 2021 including Crypto, Dark Web, DeFi targets
CoinRise Ltd.'s website states it helps people "take control of your investments and take your investment skills and abilities to the next level" through cryptocurrency trading and investment opportunities
The company's website said its employees had years of experience working with various partners in "all aspects of dealing with finance."
The company's website listed an address on Hamilton Street in Regina, though an auto-generated response to an email requesting comment for this article listed a different address in the capital along Quance Street E.
The consumer affairs authority warned investors and consumers not to send money to companies not registered in Saskatchewan as they may not be legitimate and their money could be lost.
See: How you can experiment, learn and improve with OSC TestLab
Anyone who invested with, or was contacted by anyone claiming to act on CoinRise Ltd.'s behalf was asked to call the financial and consumer affairs authority's securities division at 306-787-5936.
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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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Security advice for emerging tech companies and investors
CPNI and National Cyber Security Centre | Jun-Jul, 2021
The following is a list of actions that your startup can take to reduce the likelihood of falling victim to a more common security attack and lay the foundation for strong security as your company grows:
Security guidance for emerging technology companies
- Set the tone for a positive security culture
- Determine what you need to protect
- Build security into your environment
- As you increase collaboration, do so with security in mind
- Check and understand as you expand internationally into new markets
- As your team grows and you can no longer rely on personal relationships alone to build trust
- Minimize damage caused by a breach with a well-planned response
Download the 21 page PDF report --> here
Security advice for emerging technology investors
The following questions are intended to help you engage with emerging technology startups that you are considering investing in. These should be used to inform your due diligence investigations and to encourage companies to take a security-minded approach that will better protect your investment.
ISED: Cyber Security and Policy Statements
You may seek to incorporate some of these as conditions on which your investment depends to minimise risk of a security incident and maximise the chance of a return on your investment.
What to expect from your portfolio companies
- As you conduct your pre-investment due diligence
- Does the company have any overseas investors associated with a country which may be viewed
- as hostile to the UK or one which has different democratic and ethical values f rom our own?
- Could the involvement of other investors inhibit future fundraising or the sale of the company because of legal, ethical or compliance issues, particularly in relation to sanctions, the National Security and Investment Act or export control?
See: Fintech Fridays EP52: Technology Due Diligence Process and Cyber Security Risks
Now the startup is up and running, are you satisfied that:
- Security is owned and discussed at Board level?
- The company has identified its most valuable assets and conducted a risk assessment to determine what mitigations should be in place around those assets?
- Intellectual Property (IP) protections are in place?
- Access to information and assets is controlled and limited to just those trusted individuals who need it?
- Essential security measures have been built into the IT setup?
- The company has sought suppliers whose security arrangements meet company requirements?
See: OFSI Publishes Draft Guidelines on Technology and Cyber Risk Management
Protecting your investment
- As the startup increases collaboration
- Expands into new markets and through further investment
- Takes on additional staff
- In preparation for security incidents
Download the 16 page PDF 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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