Crypto Quill

In this week’s crypto news roundup, a series of significant cybersecurity incidents have rocked the digital asset industry. From phishing campaigns targeting Web3 workers to hefty fines and fraud cases, the crypto world faces yet another challenging week. Here’s a closer look at the key stories making headlines.

Web3 Workers Targeted by Fake Meeting Apps

A growing phishing campaign is making waves in the Web3 industry, as scammers use fake meeting apps to steal sensitive data and cryptocurrency. The campaign was uncovered by Cado Security Labs, revealing how scammers have been leveraging artificial intelligence to create convincing fake websites, blogs, and social media profiles for fictitious companies like “Meeten” and “Meetio.”

The attacks often begin on platforms such as Telegram, where scammers impersonate colleagues or trusted contacts to gain the victim’s trust. Some attackers have even gone as far as sharing stolen internal documents to appear legitimate. Once trust is established, the victim is encouraged to download a fake meeting app laced with malware.

Once installed, the malware — named Realst info-stealer — operates differently on macOS and Windows. On macOS, it disguises itself as a setup file and asks for a system password, stealing browser cookies, banking credentials, and crypto wallet details. Meanwhile, on Windows, it uses Electron with advanced obfuscation techniques to avoid detection, making it much harder for security software to spot.

Before the software is even installed, malicious websites use JavaScript to steal crypto directly from browsers. Realst targets popular browsers and wallet services like Ledger and Binance, and sends the stolen data to attacker-controlled servers in compressed zip files.

This latest threat highlights the ongoing risk of phishing and malware in the crypto space, where workers continue to be targeted due to the valuable nature of their digital assets.

Australia Fines Kraken AU$8 Million Over Margin Product Breaches

In another blow to the crypto industry, Bit Trade Pty Ltd, the Australian operator of Kraken, has been hit with an AU$8 million fine for offering a margin extension product without proper regulatory approval. The Australian Securities and Investments Commission (ASIC) stated that the exchange had been offering these margin extensions to over 1,100 customers since October 2021 without conducting a mandatory target market determination.

The court found that Kraken’s Australian branch had failed to meet design and distribution obligations, citing a “seriously deficient compliance system” and an emphasis on revenue generation. The breaches led to significant financial losses for customers, with one individual losing almost AU$4 million.

The penalty marks ASIC’s first for a Target Market Determination (TMD) breach, underscoring the regulatory scrutiny crypto exchanges are now facing as governments around the world move to tighten oversight of the industry.

Five Individuals Ordered to Pay $5 Million for Crypto Fraud

In the U.S., a federal court has ordered five individuals involved in a fraudulent Bitcoin trading scheme to pay more than $5 million in restitution to 190 victims. The individuals operated under the name Icomtech, falsely promising high returns from Bitcoin trading between 2018 and 2019. However, instead of investing the funds, they misappropriated the money, leaving victims with substantial financial losses.

The Commodity Futures Trading Commission (CFTC) brought the case forward, highlighting the ongoing dangers of crypto-related fraud. The court’s ruling marks another chapter in the battle against fraudulent schemes in the digital assets space.

Polish Police Detain Russian Crypto Boss for Financial Crimes

A former Russian cryptocurrency exchange operator, Dmitry V., has been detained in Poland on a U.S. extradition request. Dmitry V., once associated with the now-defunct WEX exchange, faces multiple charges, including fraud and money laundering, related to one of the world’s largest crypto platforms. The exchange collapsed in 2018 amid allegations of misconduct.

Polish authorities arrested Dmitry V. following a request from U.S. law enforcement. If convicted, the former exchange operator could face up to 20 years in prison. The case highlights the international nature of crypto-related crime and the global efforts to bring wrongdoers to justice.

FTX Debtors Claw Back Millions in Political Donations

In ongoing efforts to recover funds from the infamous FTX collapse, debtors have successfully reclaimed over $14 million in political donations made by former CEO Sam Bankman-Fried. These funds were sent to various political organizations, including the Democratic House Majority PAC and the Senate Majority PAC, among others.

The recovered funds are part of a broader effort to repay FTX’s creditors following its 2022 bankruptcy. While Bankman-Fried faces fraud and money laundering charges, he was not charged with campaign finance violations. However, his conviction on other charges has led to his 25-year prison sentence, as FTX’s bankruptcy process moves forward.

As part of the reorganization plan approved in October 2024, FTX debtors have made significant progress in recovering funds for creditors. A judge has confirmed that users may receive up to 119% of their account value, a rare outcome in bankruptcy cases.