phishing attack

FTX to give a ‘one-time’ $6M compensation to phishing victims

FTX founder Sam Bankman-Fried said the exchange won’t be “making a habit of compensating” users that are “phished by fake versions of other companies.”

Cryptocurrency exchange FTX will provide around $6 million in compensation to victims of a phishing scam that allowed hackers to conduct unauthorized trades on certain FTX users’ accounts. 

FTX founder and CEO Sam Bankman-Fried posted in a Twitter thread on Oct. 23 that the exchange generally doesn’t award compensation to its users “phished by fake versions of other companies in the space,” but in this case, it would compensate users.

Bankman-Fried said that this was a “one-time thing” and FTX would “not do this going forward.”

“THIS IS NOT A PRECEDENT,” he wrote, clarifying it was only the accounts of FTX users that would be reimbursed.

The recent phishing attack saw attackers gaining user account application programming interface (API) keys which allowed them to conduct unauthorized trades with their crypto exchange accounts.

The attack came to light on Oct. 21 after 3Commas said it was alerted that some of its users had unauthorized trading activity.

After an initial investigation, FTX and 3Commas then suspended the suspicious accounts to avoid further losses and disabled all compromised API keys.

Related: Mango Market exploiter brags after rug pulling Mango Inu ‘shitcoin’

On Oct.19 Bankman-Fried published a blog post detailing his thoughts on crypto regulation that included a proposal he dubbed the “5-5 standard” where hackers keep either $5 million or 5% of the amount they’ve stolen, whatever is smaller.

In his most recent tweet thread, he thought it time to try his newly thought-up standard, imploring the hacker to send back 95%, around $5.7 million, of the stolen funds within 24 hours, saying “we’ll absolve them.”

October has been dubbed “hacktober” by the crypto community as Chainalysis revealed on Oct. 13 that October 2022 has been the “biggest month” ever for hacking activity, despite the report coming out not even halfway through the month.

At the time of the report around $3 billion had been exploited through over 125 separate incidents since the start of the month.

French police use Twitter crypto sleuth’s research to catch scammers

The alleged fraudsters built a BAYC and MAYC NFT focused website that masqueraded as a service to animate the apes but instead phished victims details to steal their NFTs.

French authorities have reportedly utilized research from pseudonymous blockchain sleuth ZachXBT to charge five people on suspicion of stealing $2.5 million worth of nonfungible tokens (NFTs) via phishing scams.

According to an Oct. 12 report from the Agence France Presse (AFP) shared by Barron’s, the alleged fraudsters built a website that masqueraded as a service that animates the static artwork from people’s Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFTs.

Unfortunately for the victims, they had their credentials swiped and their NFTs stolen via the phishing website instead. 

The five young suspects are said to be in their mid to late 20s, and had allegedly conducted the scheme between late 2021 and early 2022.

The charges against the five include fraud committed as part of a criminal gang, concealing fraud and criminal association.

Two of the suspects are thought to be the ring leaders, and prosecutors have requested for them to be held in pre-trial detention.

ZachXBT provides key info

Christophe Durand, the deputy chief of France’s national cyber unit told the AFP that it got clued into the incident after observing an investigation from the self-proclaimed “on-chain sleuth” ZachXBT on Twitter.

Durand explained that ZachXBT had launched into an investigation in response to requests from “the community of owners of the Bored Ape Yacht Club series” that had their tokens swiped.

Over on Twitter, ZachXBT noted that they were “very pleased” to see that French authorities had taken action against the alleged scammers. The sleuth was also happy to see their work was officially credited online, given that they are an independent investigator that is funded by community donations.

ZachXBT also linked back to their original Aug. 9 article that he said helped kick off the investigation.

A key part of the research revolved around the alleged scammers’ use of Tornado Cash to mix and withdraw the funds.

ZachXBT outlined that the “mathys.eth” address in particular left revealing breadcrumbs, as they often withdrew intervals of 10 ETH that added up to the value the NFTs were sold for, around the time they were stolen.

“While the scammer did make an attempt to hide their breadcrumb trail by depositing the stolen funds into Tornado Cash, they were not careful about covering their tracks when it came to withdrawing the funds from Tornado.”

ZachXBT has posted a series of on-chain investigations focused on rug pulls, scams, hacks and pump and dumps, and has developed a strong Twitter following of 303,200 for their efforts.

Related: Bored Ape creators and other NFT projects investigated by SEC probe

At the start of this month, ZachXBT launched an investigation into the $450,000 Beeple Discord hack to find the people responsible. Cointelegraph also reported on ZachXBTs recent research and allegations from Sept. 29 accusing Crypto influencer Lark Davis of shilling a series of “low cap projects” just to dump on “them shortly after.”


French police use Crypto Twitter sleuth’s research to catch scammers

The alleged fraudsters built a BAYC and MAYC NFT-focused website that masqueraded as a service to animate the apes but instead phished victims’ details to steal their NFTs.

French authorities have reportedly utilized research from pseudonymous blockchain sleuth ZachXBT to charge five people on suspicion of stealing $2.5 million worth of nonfungible tokens (NFTs) via phishing scams.

According to an Oct. 12 report from the Agence France Presse (AFP) shared by Barron’s, the alleged fraudsters built a website that masqueraded as a service that animates the static artwork from people’s Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFTs.

Unfortunately for the victims, they had their credentials swiped and their NFTs stolen via the phishing website instead. 

The five young suspects are said to be in their mid to late 20s and had allegedly conducted the scheme between late 2021 and early 2022.

The charges against the five include fraud committed as part of a criminal gang, concealing fraud and criminal association.

Two of the suspects are thought to be the ring leaders, and prosecutors have requested for them to be held in pre-trial detention.

ZachXBT provides key info

Christophe Durand, the deputy chief of France’s national cyber unit, told the AFP that it got clued into the incident after observing an investigation from the self-proclaimed “on-chain sleuth” ZachXBT on Twitter.

Durand explained that ZachXBT had launched an investigation in response to requests from “the community of owners of the Bored Ape Yacht Club series” that had their tokens swiped.

Over on Twitter, ZachXBT noted that they were “very pleased” to see that French authorities had taken action against the alleged scammers. The sleuth was also happy to see their work was officially credited online, given that they are an independent investigator that is funded by community donations.

ZachXBT also linked back to their original Aug. 9 article that he said helped kick off the investigation.

A key part of the research revolved around the alleged scammers’ use of Tornado Cash to mix and withdraw the funds.

ZachXBT outlined that the mathys.eth address, in particular, left revealing breadcrumbs, as they often withdrew intervals of 10 Ether (ETH) that added up to the value the NFTs were sold for, around the time they were stolen:

“While the scammer did make an attempt to hide their breadcrumb trail by depositing the stolen funds into Tornado Cash, they were not careful about covering their tracks when it came to withdrawing the funds from Tornado.”

ZachXBT has posted a series of on-chain investigations focused on rug pulls, scams, hacks and pump and dumps, and has developed a strong Twitter following of 303,200 for their efforts.

Related: Bored Ape creators and other NFT projects investigated by SEC probe

At the start of this month, ZachXBT launched an investigation into the $450,000 Beeple Discord hack to find the people responsible. Cointelegraph also reported on ZachXBTs recent research and allegations from Sept. 29 accusing Crypto influencer Lark Davis of shilling a series of “low cap projects” just to dump on “them shortly after.”