Crypto
Former Binance CEO CZ sentenced to four months
Changpeng Zhao, the former chief executive of Binance, was sentenced on Tuesday to four months in prison after pleading guilty to violating US money-laundering laws at the world’s largest cryptocurrency exchange.
The sentence was imposed by United States District Judge Richard Jones in Seattle, who rejected prosecutors’ request that the 47-year-old Zhao serve a three-year term.
Once considered the most powerful person in the cryptocurrency industry, Zhao, known as “CZ,” is the second major crypto boss to be sentenced to prison after Sam Bankman-Fried. In March, Bankman-Fried received 25 years behind bars for stealing eight billion dollars from customers of his now-bankrupt FTX exchange.
Zhao pleaded guilty in November to one count of failing to take required anti-money-laundering measures and stepped down as Binance agreed to pay $4.3bn to settle related allegations.
US officials said Zhao deliberately looked the other way as people conducted transactions that supported child sex abuse, the illegal drug trade and “terrorism”.
“I failed here,” Zhao said before US District Judge Richard A Jones issued the sentence. “I deeply regret my failure, and I am sorry.”
“I believe the first step of taking responsibility is to fully recognise the mistakes. Here I failed to implement an adequate anti-money-laundering program … I realise now the seriousness of that mistake”, he said.
Prosecutors had told the judge a tough sentence would send a clear signal to other would-be criminals.
“We are not suggesting that Mr. Zhao is Sam Bankman-Fried or that he is a monster,” prosecutor Kevin Mosley said. But Zhao’s conduct, he said, “wasn’t a mistake. This wasn’t a regulatory ‘oops.’”
The three-year prison term prosecutors sought was more than twice the guideline range for the crime. If he did not receive time in custody for the offence, no one would, rendering the law toothless, they argued.
Zhao had been free on a $175m bond, and agreed not to appeal any sentence within federal guidelines. Zhao also paid $50m to the Commodity Futures Trading Commission.
Trades in violation of US sanctions
Binance allowed more than 1.5 million virtual currency trades, totalling nearly $900m, that violated US sanctions, including ones involving Hamas’s Qassam Brigades, al-Qaeda and Iran.
“He made a business decision that violating US law was the best way to attract users, build his company, and line his pockets,” the US Department of Justice wrote in a sentencing memorandum filed last week.
Zhao’s lawyers insisted he should receive no prison time at all, citing his willingness to come from the United Arab Emirates, where he and his family live, to the US to plead guilty, despite the UAE’s lack of an extradition treaty with the US.
No one has ever been sentenced to prison time for similar violations of the Bank Secrecy Act, defence lawyers Mark Bartlett and William Burck told the judge Tuesday, and Zhao began making changes to make Binance a model of compliance with banking transparency regulations before stepping down.
“There is no excuse for my failure to establish the necessary compliance controls at Binance,” Zhao wrote in a letter to the court. “I wish I could change that part of Binance’s story. But under my direction, Binance has now implemented the most stringent anti-money laundering controls of any non-US exchange, and those controls have been in place since 2022.”
Prosecutors said no one had ever violated the Bank Secrecy Act to the extent Zhao did.
“He says in hindsight he should have done a better job,” Justice Department lawyer Kevin Mosley told the court. “This wasn’t a mistake. When Mr Zhao violated the BSA he was well aware of the requirements.”
Zhao knew that Binance was required to institute anti-money-laundering protocols, but instead directed the company to disguise customers’ locations in the US to avoid complying with US law, prosecutors said.
Several other crypto moguls are also in the crosshairs of US authorities after the collapse of cryptocurrency prices in 2022 exposed fraud and misconduct across the industry.
Crypto
Data: BGB's market value rises to 25th place in the cryptocurrency rankings, currently reported at 7.43 billion USD – ChainCatcher
ChainCatcher news, according to CoinMarketCap data, BGB’s market capitalization has risen to the 25th position in the cryptocurrency rankings, currently reported at 7.43 billion USD. BGB briefly touched 5.39 USDT, now quoted at 5.35 USDT, with a nearly 14.02% increase in the last 24 hours, continuing to set a new historical high.
ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of various virtual token issuances and speculations. All content on this site is solely market information or related party opinions, and does not constitute any form of investment advice. If you find sensitive information in the content, please click “Report”, and we will handle it promptly.
Crypto
North Korean hackers linked to hack of 4,500 bitcoins from Japanese crypto exchange – SiliconANGLE
North Korean hackers linked to the infamous Lazarus hacking group have been identified as being behind the theft of more than 4,500 bitcoins from Japanese cryptocurrency exchange DMM Bitcoin earlier this year.
The Federal Bureau of Investigation, in conjunction with the Department of Defense Cyber Crime Center and National Police Agency of Japan, has revealed that hackers who go by the name of TraderTraitor, an arm of Lazarus, successfully stole the equivalent of $308 million from DMM in May and have detailed how the North Korean hackers did so.
The investigation into the hack found that in late March 2024, a North Korean cyber actor pretending to be a recruiter on LinkedIn contacted an employee at Ginco, a Japanese enterprise cryptocurrency wallet software company. The threat actor sent the target, who maintained access to Ginco’s wallet management system, a URL linked to a malicious Python script under the guise of a pre-employment test located on a GitHub page. The victim copied the Python code to their personal GitHub page and was subsequently compromised.
With the access gained, the TraderTraitor hackers sat patiently, waiting until May to exploit their access. To steal the bitcoin, the actors exploited session cookie information to impersonate the compromised employee and successfully gained access to Ginco’s unencrypted communications system. With this access, it’s believed that the hackers then manipulated a legitimate transaction request from a DMM employee, resulting in the theft of 4,502.9 bitcoin.
The stolen bitcoin was subsequently transferred to TraderTraitor-controlled wallets, which ultimately lead back to the North Korean government.
“The FBI, National Police Agency of Japan and other U.S. government and international partners will continue to expose and combat North Korea’s use of illicit activities — including cybercrime and cryptocurrency theft — to generate revenue for the regime,” the FBI noted in a statement.
The involvement of both North Korea and an arm of Lazarus in the hack comes as no surprise, as the hack of DMM isn’t the first time Lazarus has targeted cryptocurrency exchanges.
In 2022, Lazarus was linked to the hack on the Ronin Network that led to the theft of $615 million in cryptocurrency, and more recently, in July, the group was linked to the theft of $234.9 million in cryptocurrency from India-based cryptocurrency exchange WazirX.
Image: SiliconANGLE/Ideogram
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Crypto
Japan, US blame North Koreans for $300 million crypto theft
Tokyo, Japan — A North Korean hacking group stole cryptocurrency worth over $300 million from the Japan-based exchange DMM Bitcoin, according to Japanese police and the United States’ FBI.
The TraderTraitor group — believed to be part of Lazarus Group, which is allegedly linked to the Pyongyang authorities — carried out the heist, Japan’s National Police Agency said Tuesday.
Lazarus Group gained notoriety a decade ago when it was accused of hacking into Sony Pictures as revenge for “The Interview,” a film that mocked North Korean leader Kim Jong Un.
READ: Philippines ranks 2nd in cryptocurrency ownership globally — study
The FBI detailed “the theft of cryptocurrency worth $308 million US dollars from the Japan-based cryptocurrency company DMM by North Korean cyber actors” in a separate statement dated Monday.
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It described a “targeted social engineering” operation where a hacker pretended to be a recruiter on LinkedIn to contact an employee of a different crypto wallet software company.
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They sent the employee what appeared to be a pre-employment test, which actually contained a malicious line of code.
That allowed the hacker to compromise their system and impersonate the employee, the FBI said.
“In late May 2024, the actors likely used this access to manipulate a legitimate transaction request by a DMM employee, resulting in the loss of 4,502.9 Bitcoin, worth $308 million at the time,” it said.
“The FBI, National Police Agency of Japan, and other US government and international partners will continue to expose and combat North Korea’s use of illicit activities — including cybercrime and cryptocurrency theft — to generate revenue for the regime,” it said.
North Korea’s cyber-warfare program dates back to at least the mid-1990s.
It has since grown to a 6,000-strong cyber-warfare unit known as Bureau 121 that operates from several countries, according to a 2020 US military report.
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