Cryptohack Roundup: Cambodia’s New Crypto Directive

Every week, Information Security Media Group rounds up cybersecurity incidents in digital assets. This week, Cambodia introducing new crypto directive, a hacker compromising Animoca Brands co-founder’s social media, FTX co-CEO having his sentence reduced by a year, IRS pushing new crypto tax reporting rules and the Blockchain Bandit moving funds after two years of inactivity.

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The National Bank of Cambodia introduced a new directive permitting commercial banks and payment service providers to offer limited services involving crypto assets, excluding unbacked cryptocurrencies such as Bitcoin. The policy allows handling stablecoins and tokenized traditional assets under strict regulatory conditions.

Under the directive, banks and payment service providers can conduct crypto-related transactions for their own use and offer similar services to customers. Permitted activities include exchanging crypto assets for fiat currencies, facilitating transfers and providing custody solutions. Institutions must obtain prior approval from regulators before offering these services, and the directive prohibits the use of customers’ crypto holdings for institutional purposes.

Certain restrictions are in place to minimize risk and enhance compliance. Commercial banks are barred from issuing their own crypto assets and engaging in direct or indirect transactions with unbacked cryptocurrencies. Trading derivatives linked to these assets is also banned.

The central bank said that stablecoins and tokenized assets are considered less risky due to their backing by tangible assets or fiat currencies. Cambodia has historically maintained a restrictive approach to cryptocurrencies, citing concerns about fraud and money laundering. The National Bank of Cambodia previously blocked access to 16 unlicensed crypto exchange websites, including Binance, Coinbase and OKX. Only two licensed entities operate within the country’s regulatory sandbox now, but neither is allowed to facilitate crypto-to-fiat exchanges.

A hacker compromised the X account of Animoca Brands co-founder Yat Siu, using it to promote a fraudulent token. The fake token, named MOCA and hosted on the Solana blockchain, sought to exploit the similarity to the legitimate Moca Coin, also tracked as MOCA. The real coin is tied to Animoca’s Mocaverse project. The metaverse and gaming venture capital firm said on social media that it is not launching any new tokens or non-fungible tokens.

The breach was caused by a phishing email impersonating X, claiming to address a copyright infringement issue, according to crypto investigator ZachXBT. He linked this exploit to over a dozen similar phishing incidents in the past month, which collectively resulted in approximately $500,000 in losses. A screenshot shared by ZachXBT showed the scam post from Siu’s account.

The Mocaverse ecosystem, associated with Animoca and Siu, includes the legitimate Moca Coin, described as an “omni-chain network token” for a community-driven foundation. Mocaverse said that Siu’s account has been secured, and X is in the process of verifying ownership. Other official accounts of Animoca Brands, Moca Network and MOCA Foundation were unaffected.

On-chain data shows the scammer has been active on the memecoin-creation platform Pump.fun and has launched several NFT collections in recent weeks. The wallet linked to the scam holds approximately $67,000 in USDC, though its connection to phishing activities is uncertain.

Former FTX Digital Markets co-CEO Ryan Salame’s prison sentence has been reduced by a year, with his release now expected in March 2031, reported Cointelegraph, citing U.S. Bureau of Prisons records. Salame pleaded guilty in September 2023 to charges of operating an unlicensed money-transmitting business and campaign finance fraud. Initially sentenced to 7.5 years in prison in May, his original release date was slated for April 2032. The reason for the reduction is unclear.

Salame’s attorneys had sought a shorter sentence, arguing that his asset forfeitures were punishment enough and maintaining that he was unaware of the fraud orchestrated by FTX founder Sam Bankman-Fried. Despite these claims, Judge Lewis A. Kaplan imposed a 90-month term, citing the gravity of the case and the financial damage caused by FTX’s collapse.

The U.S. Internal Revenue Service issued temporary relief on crypto cost-basis reporting rules, a move aimed at mitigating potential tax liabilities for digital asset investors reported Cryptonews. The relief delays the implementation of a rule that would have required centralized crypto exchanges to default to the First In, First Out accounting method for calculating capital gains. FIFO, which assumes that the oldest assets are sold first, often results in higher taxable gains during market upswings. The postponement, effective until Dec. 31, 2025, provides brokers with additional time to accommodate various accounting methods.

During this relief period, taxpayers may opt for alternative accounting methods such as Highest In, First Out or Specific Identification. These options allow investors to strategically select assets for sale, offering greater flexibility and potential tax savings.

A hacker known as the “Blockchain Bandit” resurfaced, consolidating 51,000 Ether valued at $172 million, into a single wallet after two years of inactivity. Blockchain investigator ZachXBT reported that the hacker transferred the stolen Ether in batches of 5,000 ETH from 10 separate wallets. The transactions on Dec. 30 marked the first activity involving the funds since Jan. 2023, when the hacker also moved 470 Bitcoin.

The Blockchain Bandit initially accumulated nearly 45,000 ETH through a technique called “Ethercombing,” which involves exploiting weak private keys generated by faulty code and random number generators.