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Monday, the Australian Financial Review reported that Levitas Capital, a Sydney-based hedge find, was the target of a fake Zoom invitation opened by one of the fund’s co-founders Michael Fagan or Michael Brookes. After sending the fake invitation to Zoom on September 10, 2020, the hacker was able to install a malicious software program that gave him access to the funds email system. Among other things, hackers used to send fake invoices and approve unauthorized transactions.
Between September 10 and 23, 2020, hackers stole money in a number of ways, including:
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a payment of a $ 1.2 million fraudulent bill to an Australian company;
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a $ 2.5 million payment to the Hong Kong Bank of China (the payment was eventually stopped by one of the co-founders);
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a payment of $ 5 million to East Grand Trading at United Overseas Bank of Singapore (the payment was eventually stopped by one of the co-founders);
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a withdrawal of $ 240,000 through an ANZ branch in Bankstown
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a further withdrawal of two bank checks of equal value of $ 240,000; is
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additional 64 withdrawals from the ANZ account for a total of $ 300,000.
One of the co-founders, Michael Fagan, commented:
There were so many red flags that should have been spotted
Michael Fagan’s comments that the red flags should have been spotted are correct. Basic training in brand representation and phishing awareness would have prevented these issues from occurring in the first place. This isn’t the first time an AFS licensee has had a similar incident. Earlier this year, a hacker gained remote access to an AFS licensee, RI Advice Group, and spent more than 155 hours accessing the server. The hacker did this simply through “brute force”, attempting to log in using dependent login 27,814 times without success from 10 different countries. It is surprising that the cybersecurity systems of AFS licensees were not adequately prepared for such an attack.
Levitas Capital was forced to close after the September attack after one of its largest institutional clients, Australian Catholic Super, withdrew its money over concerns sparked by the cyber attack. Prior to the attack, Levitas Capital has $ 75 million under management.
We have yet to see if the ASIC will initiate proceedings against Levitas Capital. Earlier this year, in August, The ASIC initiated the process for pecuniary measures against the RI Advisory Group following the “brute force” cyber security attack.
Receiving bitcoin payments: BitPay launches a new payroll service
Bitcoin payment provider BitPay recently announced a new service: “BitPay Send”, a clean new way for businesses to pay employees, contractors, customers and suppliers simultaneously with cryptocurrency.
Bitpay describes the new service as “ideal for businesses looking for a fast, efficient and secure way to send bulk payments anywhere in the world, any day of the week, anytime.”
As one of the oldest and most respected bitcoin companies in the world, Bitpay has already done so raised $ 72.5 million in investment. Considering the so far positive reception of BitPay Send, who can say what comes next as they continue to work to transform the way businesses and people send, receive and store money around the world.
It is not yet known whether the Australian tax return applies to the use of Bitpay’s payroll service. Currently Australia has some services like Get paid in Bitcoin of which the level of absorption is not clear.
China challenges the G20 to take charge of CBDC cooperation
Last week, Chinese President Xi Jinping urged G20 meeting attendees to support the digital currency and advised that member countries should support the growth and rollout of their own central bank digital currencies (CBDCs) if they aim to stabilize and restore economic growth.
Unlike Australia, the Chinese government believes a retail CBDC is strong as a means of stimulating the economy. When considering recent forecasts that China’s planned digital yuan will account for 15% of total consumer payments over 10 years, it’s clear why the government would like to ensure stability in a new form of digital currency.
Game start! Regulatory relief granted for the VCOIN gaming token by the US SEC
The SEC division of Corporate Finance recently welcomed “position without action” for Delaware Corporation IMVU Inc in relation to an in-game blockchain currency. This published position allows you to sell IMVU’s digital asset / stablecoin VCOIN on their virtual world platform without registering the offer and sale of a stock under the Securities Act of 1993 is Securities Exchange Act of 1934. In other words, it allows you to use the VCOIN without fear of being prosecuted by the SEC.
VCOIN is a tangible example of how a properly structured digital asset can use the power of the blockchain without falling within the definition of a security. This isn’t an ASIC-binding ruling, but it can help provide some clues for local blockchain developers looking to use tokens in their products.
Chainalysis code for capturing and maintaining digital assets seized in captivity
Recently, the blockchain analysis firm Chainalysis announced was launching a program designed to manage and store cryptocurrencies seized during criminal investigations.
Coining an “asset realization program,” Chainalysis explained that its new software will allow law enforcement to manage, hold and track seized assets, including cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and other “alternative currencies”.
In his November 12th announcement, the company has reduced its value proposition in as many words as:
When law enforcement officers discover and investigate illicit cryptocurrency assets, they must seize and hold them until they can be legally confiscated. Therefore, government agencies and bankruptcy trustees – licensed professionals who provide insolvency advice – need a secure way to track, store and ultimately sell seized cryptocurrency assets for fiat currency.
Right now there doesn’t seem to be a better time for Chainalysis to support its new program, seen in The U.S. government announcement that it has seized $ 1 billion worth of BTC in the largest digital coin confiscation to date.
Chainalysis was involved in that investigation as well as the recent take down of Welcome to Video, collaborates with the US agency FinCen to investigate financial crimes, and has been involved in other recent investigations into North Korean hacking activities and terrorist financing.
Hong Kong intends to introduce robust regulations on digital currency exchange
Taking yet another step from mainland China and its aggressive stance towards digital currency trading platforms, Hong Kong announced an expansion of monitoring and oversight of digital currency trading activities.
Hong Kong has historically supported digital currency trading activities, welcoming exchanges in the provincial sandbox as long as they adhere to established rules and regulations. In doing so, the Securities and Futures Commission (SFC) had previously put in place an opt-in regulatory framework for digital currency trading platforms that allowed platforms that did not trade securities to be exempt from these laws.
In an effort to improve protections for users of digital currency exchanges, the SFC recently announced new plans to regulate all digital currency exchanges regardless of whether they list “security tokens”. Second BTC Manager, the security guard is now trying to adopt the Financial Action Task Force (FATF) recommendations for guidance on how to strengthen HK oversight.
The SFC has always been of the view that instead of imposing an outright ban on digital currency exchanges like China, Hong Kong authorities should continue working to create a regulated environment for digital currency trading in the city. This led to the introduction of political requirements such as yours Question 2019 for all exchanges to have full deposit insurance and now the latest SFC directive. As Chinese law enforcement is constantly investigating major players in many major digital currency exchanges and effectively tightening the regulatory noose around smaller exchanges, the two jurisdictions appear to be increasingly taking divergent approaches to this growing industry.
