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FinCEN releases report on illegal activities concerning Bitcoin [BTC] and other cryptocurrencies

Fincen releases report on illegal activities concerning bitcoin [btc] and other cryptocurrencies

FinCEN releases report on illegal activities concerning Bitcoin [BTC] and other cryptocurrencies

The Financial Crimes Enforcement Network [FinCEN] recently released guidance for money transmitter using digital currencies. Along with this, it also released a document titled ‘Advisory on Illicit Activity Involving Convertible Virtual Currency’ guiding institutions on how to identify and report “suspicious activity concerning how criminals and other bad actors exploit convertible virtual currencies”. This includes activities such as evading sanctions, money laundering, and terrorist financing.

The document stated,

“Criminals continue to exploit virtual currency to support illegal activity, money laundering, and other behavior endangering U.S. national security, including  through entities facilitating its anonymous use […] This advisory highlights prominent typologies and red flags associated with such activity and identifies information […]”

Further, the report stated that unregistered platforms were being used by criminals to carry out their illegal activities, with the major ones being the darknet marketplace, P2P exchanges, money service business outside the United States, and  Kiosks. More so, it also detailed 30 pointers that are “Red Flag Indicators of the Abuse of Virtual Currencies”

Under darknet marketplace, the red flag indicators were the address linked to the marketplace or illegal activity, the address mentioned on social media platform or otherwise, where it is linked to illicit activity, IP address linked to TOR, wallet called out for its suspicious source, a transaction that used mixing and tumbling services.

Source: fincen

Source: FinCEN

Even rapid conversion of cryptocurrencies for other cryptocurrencies for no apparent reason was also one of the red flags. It also stated that a customer who “declines requests for ‘know your customers’ documents or inquiries regarding sources of funds” is also a sign to watch out for. The document further prompted businesses to report these activities by providing information such as the customer’s wallet address, account information, transaction details, transaction history, IP addresses, and other login details and others.

The post FinCEN releases report on illegal activities concerning Bitcoin [BTC] and other cryptocurrencies appeared first on AMBCrypto.

Published at Sat, 11 May 2019 10:03:21 +0000

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Hacker Allegedly Siphons $31 Million Out of Tether, Driving Further Speculations About the Cryptocurrency

Hacker Allegedly Siphons $31 Million Out of Tether, Driving Further Speculations About the Cryptocurrency

Tether, a cryptocurrency pegged 1-to-1 to the U.S. dollar, was allegedly hacked today to the tune of $31 million.

Tether functions to convert U.S. dollars to a type of cryptocurrency. The project’s token (USDT) is pegged to the dollar and is used in exchange trading. The idea behind Tether is that instead of having to sell your bitcoin or other token for a fiat currency, you can convert it to USDT, and either hold it in USDT or else transfer your USDT to another exchange and use it to purchase tokens there.

As for the exchanges, USDT allows them to trade in something akin to dollars, without requiring them to have a bank account.

Tether operates on the “Omni Layer Protocol,” which itself operates on top of the bitcoin network, and uses bitcoin addresses. According to a blog post on the project’s website, $31 million worth of USDT was sent to an unauthorized bitcoin address on November 19, 2017.

In the blog post, Tether also noted it released a new version of the Omni Core software used by exchanges and wallets to support USDT transactions, thus implementing a temporary hard fork to the Omni Layer. As a result, the affected tokens are frozen in place, making them essentially worthless to the hacker.

“We strongly urge all Tether integrators to install this software immediately to prevent the coins from entering the ecosystem,” Tether wrote, adding that “any tokens from the attacker’s addresses will not be redeemed.”

Some exchanges, like Kraken, have stopped trading USDT temporarily while they upgrade to the newer software.

The heist was made in three separate USDT transfers out of Tether’s core Treasury wallet in the amounts of 23,000,000; 7,900,000; and 500,000 USDT. It is unclear why the hacker did not move all of the money out at once.

In addition to the other exchanges it trades on, USDT is widely traded on Bitfinex, an exchange that lost 119,756 BTC (worth $72 million at the time) in a hack that took place a year and a half ago.

News of the Tether attack comes at a time when some — notably the blogger “Bitfinex’ed” — are questioning whether USDTs are being issued without backing of actual U.S. dollars. Similarly, there has been growing speculation that Tether is being used in possible market manipulation to drive up the price of bitcoin.

The current market cap value of USDT is around $673 million. If that money is backed by real reserves, as Tether claims, the project would need to have at least that much in its bank account in Taiwan.

Tether publishes a bank account balance on its website’s Transparency page and claims the money is redeemable for U.S. dollars at any time directly through the Tether platform.

The project’s website has been up and down sporadically, since the hack. An archive of the site is available here.

The post Hacker Allegedly Siphons $31 Million Out of Tether, Driving Further Speculations About the Cryptocurrency appeared first on Bitcoin Magazine.

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