Late September was full of crypto news. Various scams and hacker attacks were at the center of attention. Even in 2022, the crypto industry is still not the safest place. That’s why we at the AMLBot team decided to start a series of educational articles to help you steer clear of risky transactions.
Wintermute case: how the company tries to survive after the $160 million hack, conspiracy theories
Two weeks ago, hackers attacked cryptocurrency market maker Wintermute. That attack resulted in $160 million in direct losses. Some conspiracy theorists said that this was an “inside job.” But why are they even thinking about it in the first place?
On September 15, there was a major attack on the service, during which an anonymous hacker stole 60+ tokens like Tether, USD Coin, etc.
This Monday, crypto blogger Librehash (James Edwards) claimed that the hack could have been carried out by some internal party. He said that he sees transactions done by an externally owned address (EOA), which is a flag that the hack was carried out by someone who had access to internal data. Mr. Edwards also claimed that he found out the hacker’s possible sequence of actions: “By retrieving the private key for an externally owned address, the hacker got access to make a call on the market maker’s smart contract, which may have the owner access. There is no such uploaded or verified code for the Wintermute smart contract”.
Librehash also mentioned the Enterscan transaction history, where anyone can see how Wintermute had transferred $13 million worth of Tether digital coins from two exchanges on the day of the incident.
To date, the company has over $200 M in DeFi debt to several counterparties. However, Wintermute CEO Evgeny Gaevoy stated that the company remains solvent and has “nothing to worry about.”
Pentagon launches effort to assess crypto’s threat to national security
The Pentagon is ready to launch a major review of cryptocurrencies to assess the level of risk to national security and law enforcement posed by such assets. DARPA (Defense Advanced Research Projects Agency) recently employed the crypto intelligence firm Inca Digital for this year-long project. The company was hired to develop tools that could give the Pentagon a granular view of the inner working surroundings of subjects.
This new app will help the Pentagon find much more data than had been made available through the traditional financial market. The effort is focused on allowing officials to apprehend even more criminals, money launders, and terrorists that are using crypto for their illegal purposes.
Mark Flood, a former Treasury official says that everyone needs to understand that the crypto sector may be a crucial component of modern warfare, because it can finance various illegal activities.
The lack of international regulatory guardrails has allowed the cryptocurrency market to grow enough to shadow the financial system, helping various criminals hide their traces.
That’s why the Pentagon wants to have the most intelligent research tools conceivable at its disposal. They want to trace suspicious cyber activities, which can help them catch even more criminals.
Almost $1 M in crypto has been stolen during Ethereum ‘vanity address’ hack
Blockchain security firm PeckShield claimed that hackers stole approximately $950 K in crypto this month with the help of vanity-address generator Profanity. But what is a “vanity address” and why is it so easy to hack? Let’s find out!
A “vanity address” is a crypto address with defined parameters that are created by users, not by computers or applications. That is why they are more vulnerable to brute force attacks (when hackers comb through various options until they find that one that “clicks”) rather than random-generated wallets.
A Group of hackers took 732 $ETH and sent them to the crypto mixer Tornado Cash, which was already under US sanctions. Obviously, the hackers understood that they were committing an illegal activity from the start, so they used a mixer that does not adhere to any AML rules. This attack is similar to the Wintermute case, where other hackers also stole $160 million in various crypto assets.
How can a Crypto Wallet Work without Problems with Regulators and its Reputation?
Every day, the crypto industry is attracting thousands of new fans who want to start their journey in the digital world. And each user needs a place where they can store their assets. There are many types of crypto wallets to suit every taste: centralized - where the service generates a private key; non-custodial - where the user can create its private key; hot and cold, web and mobile-only, etc. But how can one find a safe and secure option in a world full of hackers?
Read our guide on how to find a safe wallet and check every possible transaction with AMLBot, which could save you from most hackers’ attacks.
KYT (Know Your Transaction): what is it?
Modern crypto regulations are filled with terms like AML, KYC, and KYT. We spoke about the first two measures a few weeks ago. Now it is time to get acquainted with KYT. What is it about, what can it track, and how can it help businesses and users?
KYT is a process of evaluating transactions to determine if they are suspicious or downright fraudulent. It differs from KYC and AML, but at the same time, the procedures all help fight crypto criminals. Find out how KYT can help you as a user, what challenges it could solve, and why every financial company should apply KYT solutions. All the details can be found in this research material from the AMLBot team.
MiCA vs. Biden’s Framework – The Battle of the Crypto-Regulations Heats Up
The US government administration recently released its crypto regulation framework. But at the same time, EU officials announced their own MiCa framework. What are the common traits between the two regulations and what are the core differences that can lead to some disruption in the market — read all about it in our latest article.
Why Are So Many Crypto Exchanges Banned in the U.S.?
The case of Tornado Cash was one of the most prominent crypto events of the month. But it’s not the only mixer that has been banned by the US government. In 2022, they banned dozens of crypto mixers. Why are the US authorities so opposed to such platforms and why should you stick to their recommendations? Find out all about it with the help of the AMLBot team!