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Three Crypto Hackers Arrested In China, Accused Of Stealing $87 Million In Bitcoin (BTC) And Other Cryptos

Three crypto hackers, suspected of committing the most massive theft related to cryptocurrency in China, were arrested by Chinese police after a coordinated operation in several cities, according to local press reports. The hackers stole Bitcoin (BTC) and other cryptos with a total value of 600 million yuan (about $87 million) after they hacked into people’s and companies’ computers.

According to the Chinese news agency Xinhua, the police investigation began in late March, when a citizen named Zhang went to the Xian City Public Safety Office to report that his computer had been hacked. The victim stated that in the attack he was robbed of 100 million yuan, about $15 million, in Bitcoin (BTC) and Ethereum (ETH).

With the help of several undisclosed internet companies, the investigators followed up on the transactions that led them to a suspect identified as Zhou. Subsequently, Zhou’s communications led to two alleged associates in the criminal operation.

The three cybercriminals reportedly used sophisticated computer techniques to access their victims’ computers remotely and then cover their tracks, leaving little trace of the cyber attacks. In this way, they were able to steal approximately 600 million yuan, equivalent to $87 million, in digital assets, including Bitcoin (BTC) and Ethereum (ETH), from multiple personal and business computers.

The crypto hackers arrested in China for stealing $87 million in Bitcoin (BTC) and other cryptos used sophisticated techniques to avoid detection

The local South China Morning Post noted that “the three suspects had been studying hacking technology since they were 12-13 years old and had worked for major Internet companies.

The Chinese police also reported that hackers divided the proceeds from the sale of stolen cryptocurrencies into smaller units and conducted multiple transactions in an attempt to avoid detection. This operation required the analysis of 30,000 pieces of evidence, according to the local news portal.

The suspects were arrested on August 5th during a joint and simultaneous police operation in Hunan, Changchun and Beijing provinces. The case will remain open until further investigations.

About a month ago, cybercriminals in China were hit by another blow, as the Chinese police arrested 20 people belonging to the technology firm Dalian Shengping Network Technology for spreading crypto mining malware on over one million computers. This activity brought hackers illicit profits of $2 million over the past two years.

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US Judge Ordered Hacker To Pay His $750,000 Bail In Cryptocurrency

On August 9th, a federal judge in San Francisco, California, ordered a defendant to post his $750,000 bail in cryptocurrency. Martin Marsich was accused of hacking into the website of the video game company Electronic Arts and obtaining illegal access to the records of more than 25,000 of the company’s customers.

Marsich was arrested on August 8th in San Francisco and made his first appearance in federal court the next day, according to a press release from the Northern District Attorney’s office in California. The charges filed include illegal access to financial data on 25,000 Redwood City Electronic Arts customers.

Judge Jacqueline Corley set bail at $750,000 and ordered the defendant to pay it in cryptocurrency so that he could be transferred to a supervised minimum-security center.

Judges have the power to order that bail be posted on any type of assets, said the assistant US Attorney for the Northern District of California, Abraham Simmons.

Martin Marsich, who hacked into the Electronic Arts database, ordered to pay his $750,000 bail in cryptocurrency

While the judge in the case has not told the media about the reasons for setting bail in cryptocurrency, some of the charges against Marsich did not relate to cryptos, but to the use of coins issued by some games. Those coins, which are purchased or won in competitions, allow customers to buy items to be used in such games or to create accounts with access to the games.

After Marsich’s intrusion was discovered, the affected company closed the affected accounts, which totaled a loss of $324,000, according to the Northern District Attorney’s Office of California.

Also noteworthy, the first federal sentence in the United States involving cryptocurrency, more specifically, the Bitcoin (BTC), took place in July 2016, when the Federal Court in Manhattan found Trendon Shavers guilty of federal tax fraud and sentenced him to 18 months in prison. He was also sentenced to pay back $1.2 million in BTC to 48 investors. The defendant ran a Bitcoin investment firm, where he promised weekly profits of 7%, among other offers.

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About 46% Of Mexico’s Smartphone Users Are Interested In Buying Cryptocurrencies

A study conducted among smartphone users in Mexico revealed that, although there is evidence that people either fear to invest in cryptos or don’t know much about cryptocurrencies, there is also growing Mexican interest in the subject. In this sense, 46.1% of those who do not currently own digital assets or have never used them, expressed their willingness to acquire Bitcoin (BTC) or other cryptos in the next six months.

The information is derived from a survey called the MX18 Cryptometer, which was conducted between May 22nd and June 5th, 2018, at the initiative of a group of firms related to the cryptocurrencies market in Mexico. For this study, data was collected through 1,416 interviews with mobile phone users.

Although the sample seems small as 64.7 million smartphone users live in Mexico, the goal of the study was to obtain the first indicators on the knowledge and general feeling of the population in relation with blockchain technology and cryptocurrencies.

The study found that 26.5% of respondents had already bought or used cryptocurrencies at some point. Also, the most appreciated cryptocurrency by Mexicans is Bitcoin (BTC), the leading digital asset in the market, about which more than 61% of the Mexican heard of.

Mexicans are more and more interested in cryptocurrencies

Mexicans are using their cryptocurrencies mainly for online purchases and payments (35.2%), as well as to maintain them and wait for their value to increase (32.5%). However, there is one group (20.5%) that is dedicated to obtaining short-term profits through the purchase and sale of digital assets.

On the other hand, of those who expressed interest in acquiring cryptos, 46.2% would do so aiming to maintain a balance waiting for its value to increase.

Among the results that pose challenges to the Mexican crypto community, 47.4% of those who said they were not interested in buying cryptos indicated that the reason is the fear of fraud. Likewise, 39% say they do not know about this topic, while 30.5% consider that the cryptocurrencies have no support.

The firms that promoted the MX18 Cryptometer study, Bitso, Fiinlab, Wisum and Psyma Latina, agreed that, in order to increase the cryptocurrency adoption across Mexico, it is necessary to encourage users to “move from interest to action.”

Also noteworthy, Mexico is a leading country in the Latin America regarding new financial technologies, known as FinTech companies. In fact, it already has a regulatory framework for this sector that was enacted during the Q1 2018.

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Maerki Baumann Bank Is The Second In Switzerland To Accept Funds From Cryptocurrency Operations

Swiss bank Maerki Baumann will become the second bank in Switzerland to accept money derived from cryptocurrency operations, including funds obtained through crypto mining and the receipt of payments for services rendered.

Maerki Baumann, a Zurich-based bank, to accept funds from cryptocurrency operations

The decision of the financial institution comes at a time when most local banks refuse to accept this type of digital assets and, in other countries, there are regulatory frameworks against cryptocurrency exchange platforms. These decisions confront the most critical position in the community that sees banks as actors outside the cryptocurrency ecosystem.

According to a report released on Monday, August 6th, the Zurich-based bank decided as a response to new market demands and the increasing popularity of cryptocurrencies.

Maerki Baumann informed that it would not offer direct investment in cryptocurrency and other derivatives, as the bank does not recommend making substantial investments in cryptos or maintaining them in the long term due to cryptocurrencies market’s volatility.

In other regions, the banking system and the cryptocurrencies are not getting along as well as in Switzerland

The international banking and financial system face new challenges from the increased use of cryptocurrency. The decentralized nature of cryptos such as Bitcoin (BTC), among others, is rethinking the way users manage their own money without the involvement of intermediaries, and banks don’t like this.

For that reason mainstream banks and financial institutions refuse cryptocurrency. While in some regions of the world there exists openness, in some other areas, especially in South America, the doors remain closed for digital assets.

Some recent cases are, for example, the cessation of operations of the cryptocurrency exchange platform Buda in Colombia due to the company’s bank accounts closure by several mainstream banks.

However, fortunately, Switzerland shows a greater openness to cryptocurrencies, and, recently, the Zurich-based Maerki Baumann bank accepted cryptocurrency operations.

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Only 10% Of Cryptocurrency Transactions Are Used For Illegal Activities, According To DEA

According to information provided by Lilita Infante, a special agent with the US Drug Enforcement Administration (DEA), currently, only 10% of the cryptocurrency transactions are used for illegal activities. Infante provided this data during an interview, published on Bloomberg’s website, in which the agent states that five years ago the percentage of criminal acts involving cryptos was 90%.

Infante noted that illegal activities are carried out mainly through the dark web, where illegal products are sold in cryptocurrency, making this practice an increasing trend in the last year. Thus, the report indicates that it is criminal organizations, such as drug cartels, that increasingly use digital assets in their operations, ranging from money laundering to cross-border transactions in crypto coins.

For the official, this is because these organizations that operate outside the law find it cheaper, faster and safer to carry out operations with cryptocurrencies than through the traditional banking system. However, this situation is going to change.

In this regard, Infante states that both the Bitcoin (BTC) platforms, as well as other cryptos’ underlying blockchains, become resources that make it easier for agents to track transactions and identify the people involved.

Privacy-focused cryptocurrencies, like Monero (XMR) and Zcash (ZEC), are not liquid enough and, although they are more anonymous than Bitcoin (BTC), we still have ways to track them down, too.

Lilita Infante, Special Agent, DEA, United States

The data presented by Lilita Infante contrasts with previous studies regarding cryptocurrency transactions for illegal activities

The information provided by this DEA agent can be contrasted with the results of some reviews on the use of cryptocurrency for illicit activities. Among them, we can highlight an investigation carried out by the European Parliament last June, which concluded that there are hardly any public documents and confirmed cases of terrorist financing involving cryptos.

Contrary to what the DEA agent said, European parliamentarians do foresee a long-term advance in cybercrime, due to the development of private cryptocurrencies and greater adoption of cryptos and underlying blockchain technologies linked to social networks and online platforms.

However, the European Parliament’s study agrees with Infante and other research conducted in 2017 by New York University Law School that criminal organizations use digital assets to sell/buy goods on the dark web and to transfer funds and securities through decentralized platforms.

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