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Cryptohack Roundup: Trump Token Takes Off

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Blockchain & Cryptocurrency
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Cryptocurrency Fraud
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Fraud Management & Cybercrime

Also: CLS Global Pleads Guilty to Wash Trading

Rashmi Ramesh (rashmiramesh_) •
January 23, 2025    

Cryptohack Roundup: Trump Token Takes Off
Image: Shutterstock

Every week, Information Security Media Group rounds up cybersecurity incidents in digital assets. This week, Trump token making millions, Hester Peirce to lead a crypto task force, CLS Global pleaded guilty to wash trading, Upbit faced KYC violation charges, DCG’s $38M settlement with the SEC, guilty plea in $100M theft, and the SEC accused Nova Labs of securities violation.

See Also: OnDemand | NSM-8 Deadline July 2022:Keys for Quantum-Resistant Algorithms Implementation


Trump Token Makes Millions

U.S. President Donald Trump rejected claims of earning billions from his cryptocurrency token, $TRUMP, launched last week with a market cap of $8.32 billion. First Lady Melania Trump shortly afterward introduced her own token, $MELANIA, now valued at $777 million.

Trump reportedly downplayed his involvement. “I don’t know much about it other than I launched it. I heard it was very successful.” When told he might have profited billions, he laughed, calling it “peanuts” compared to tech billionaires’ wealth.

The launch raised ethical concerns over conflicts of interest, with critics pointing out Trump’s influence over cryptocurrency regulations. Adav Noti from the Campaign Legal Center called the move “beyond unprecedented,” accusing Trump of monetizing the presidency.

Trump, who branded himself the “crypto president” during his 2024 campaign, drew nearly half of $274 million in corporate donations from crypto firms. Ethical questions linger as the $TRUMP token claims no political ties.


SEC’s Hester Peirce to Lead Crypto Task Force

U.S. Securities and Exchange Commissioner Hester Peirce will head a task force aimed at establishing a regulatory framework for digital assets. Acting SEC Chair Mark Uyeda announced the initiative, addressing criticism that the agency’s “regulation by enforcement” approach has stifled innovation and created uncertainty in the crypto industry. The task force marks a shift following Gary Gensler’s tenure as SEC chairperson. Gensler pushed for crypto firms to register with the agency, saying that most cryptocurrencies qualify as securities. Uyeda has labeled Gensler’s policy a “disaster” and called for actionable guidance. Richard Gabbert and Taylor Asher, advisers to Uyeda, will respectively serve as chief of staff and chief policy advisor for the task force.


CLS Global Pleads Guilty to Wash Trading, Faces $428K Fine

Dubai-based crypto market maker CLS Global agreed to plead guilty to charges of wash trading on decentralized trading platform Uniswap, the U.S. Attorney’s Office for the District of Massachusetts said. Under a settlement that still requires approval from a judge, CLS will pay $428,059 in penalties, including seized cryptocurrency and a fine, and will be barred from engaging in crypto transactions on platforms accessible to U.S. investors.

Federal prosecutors in September 2024 charged CLS with conspiracy to commit market manipulation and wire fraud and one count of wire fraud. These charges followed an undercover FBI operation targeting wash trading, a manipulative practice used to inflate trading volumes artificially and attract investors.

As part of the sting, the FBI created an Ethereum-based token, NexFundAI, which traded on Uniswap. CLS Global provided wash trading services for the token, using algorithms to execute self-trades across multiple wallets to simulate organic trading activity. FBI video evidence captured a CLS employee admitting, “I know its wash trading, and I know people might not be happy about it.”

The investigation showed that CLS used its trading wallets and employed traders to manipulate NexFundAI’s volume, helping it meet listing requirements and attract buyers. The FBI has since disabled the NexFundAI project.

More stories

CLS faces a related civil enforcement action from the SEC for alleged violations of securities laws.


South Korea’s FIU Targets Upbit for Alleged KYC Violations

South Korea’s largest cryptocurrency exchange by trading volume Upbit faces potential sanctions for alleged know-your-customer violations. The Financial Intelligence Unit of South Korea’s Financial Services Commission issued a suspension notice, Naver reported.

Authorities proposed halting new user registrations on Upbit for six months while allowing existing users to continue trading. The FIU first flagged Upbit’s KYC breaches during a business license renewal review in November 2024, identifying up to 600,000 violations. The violations reportedly stem from flaws in the company’s client identification process.

South Korea’s Special Financial Transactions Act imposes penalties of up to 100 million Korean won, or $68,600, per KYC breach. With up to 600,000 violations, Upbit could face fines totaling $34.3 billion. The law also prohibits local crypto firms from conducting transactions with unregistered service providers, another rule Upbit is accused of violating.


Digital Currency Group to Pay $38M in SEC Settlement

Global investment firm Digital Currency Group agreed to pay $38 million to the SEC to settle allegations of misleading investors regarding its subsidiary, Genesis Global Capital.

The SEC said that Genesis’ financial troubles began in June 2022 when one of its largest borrowers, Three Arrows Capital, defaulted on a margin call. “In mid-June 2022, a large borrower defaulted on a margin call, which compromised Genesis’ business,” the SEC said in a filing. It alleged that DCG downplayed the impact of the default and overstated its actions to assist Genesis during the fallout.

Former Genesis CEO Soichiro “Michael” Moro also agreed to settle related charges, paying $500,000 for alleged negligence.

The SEC said Genesis provided daily updates to DCG executives in June 2022 about Three Arrows Capital’s default and its exposure. During this period, DCG made posts on X, formerly Twitter, regarding Genesis’ financial stability, which the SEC described as “false or misleading.”

DCG and Moro neither admitted nor denied the findings but agreed to the settlements.


‘Crypto Godfather’ and Ex-LA Sheriff’s Deputy Plead Guilty to $100M Theft Plot, Extortion

Self-proclaimed “Crypto Godfather” Adam Iza, 24, and former Los Angeles County Sheriff’s Department deputy Eric Chase Saavedra, 41, have pleaded guilty to charges stemming from a conspiracy involving home invasion, extortion and misuse of police powers. The two orchestrated a plot targeting multiple victims in Los Angeles, violating their civil rights through intimidation and illegal search warrants. Iza faces up to 35 years in prison for conspiracy, wire fraud and tax evasion, while Saavedra could serve up to 13 years for conspiracy and filing a false tax return.

Between 2021 and 2022, Saavedra provided Iza with confidential information from police records using Telegram to avoid detection. He also improperly obtained search warrants, including one for a GPS location linked to a laptop suspected to hold over $100 million in cryptocurrency. The plot unraveled when armed intruders hired by Iza failed to complete the theft after the victim fired a warning shot. He also admitted to stealing $37 million from Meta by exploiting business manager accounts and their credit lines from 2020 to 2022.


SEC Accuses Nova Labs of Securities Violations and Misleading Investors

The SEC filed a lawsuit against Nova Labs, the developer of the Helium network, alleging the sale of unregistered securities and deceptive claims about major partnerships. The lawsuit, filed on Friday just before the inauguration of President Donald Trump, focuses on three Helium-related tokens: Helium Network token, Helium Mobile token and Helium IoT Network token. The SEC claims Nova Labs violated securities laws by offering these tokens without proper registration.

The agency also accused Nova Labs of falsely promoting partnerships with companies such as Nestlé, Lime and Salesforce. The lawsuit says that these firms were not actual users or customers of the Helium network. When Nestlé and Lime discovered Nova Labs was publicly associating with them, they reportedly issued cease-and-desist letters. Helium Founder Amir Haleem had previously dismissed criticism regarding the misleading use of corporate logos on the company’s website.





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    Boosting Cybersecurity for Small Businesses: Effective Strategies for Task Automation

    Small businesses face increasing cyber threats that can jeopardize their sensitive data, finances, and reputation. While implementing robust cybersecurity measures is crucial, small business owners often struggle with limited resources and expertise. However, with the advancements in automation technology, small businesses can leverage automated tools and processes to enhance their cyber defense. This article explores the best ways for small businesses to automate cybersecurity tasks, empowering them to safeguard their digital assets effectively.

    Employing Automated Threat Detection

    One of the primary challenges in cybersecurity is the timely identification and response to potential threats. Small businesses can automate threat detection by deploying security information and event management (SIEM) or intrusion detection and prevention systems (IDPS). These tools analyze network traffic, log files, and system events, promptly alerting business owners to suspicious activities or potential breaches. Automating threat detection reduces the burden of manual monitoring and ensures faster incident response.

    Implementing Patch Management Systems

    Cybercriminals often exploit software vulnerabilities to illicitly gain access to systems. Small businesses can automate the patch management process to keep their software and systems current. Patch management tools can scan the network, identify outdated software, and deploy necessary updates automatically. By automating patch management, businesses can significantly reduce the risk of exploitation through known vulnerabilities.

    Enabling Multi-Factor Authentication (MFA)

    Weak or stolen passwords are often responsible for security breaches. Small businesses can enhance authentication security by implementing multi-factor authentication (MFA) systems. MFA adds a layer of protection by requiring users to provide multiple credentials, such as a password, a unique code generated by a mobile app, or a biometric scan. By automating MFA, businesses can fortify access controls and prevent unauthorized access attempts.

    Automating Security Auditing and Compliance

    Compliance with industry regulations and standards is crucial for small businesses, as non-compliance can lead to severe penalties. Automating security auditing and compliance processes can help small businesses meet these requirements efficiently. Utilizing automated tools that scan systems for vulnerabilities, assess configurations, and generate compliance reports simplifies the auditing process. This automation ensures that businesses can identify security gaps and address compliance issues promptly.

    Deploying Automated Data Backups and Recovery

    Data loss can have catastrophic consequences for small businesses. Automating regular data backups and implementing disaster recovery solutions is essential. Cloud-based backup services can automatically back up critical data, minimizing the risk of data loss due to hardware failures, cyberattacks, or natural disasters. Automated backups ensure that businesses can quickly restore their systems and operations in the event of a breach or data loss incident.

    Educating Employees with Security Awareness Training

    Cybersecurity incidents are often attributed to human error, making them a prominent contributing factor. Automating security awareness training can help small businesses educate their employees and cultivate a strong security culture. Deploying automated training modules or simulated phishing campaigns can teach employees about common threats, safe browsing practices, and incident reporting procedures. Automating these training initiatives ensures consistent and ongoing education for all staff members.

    As cyber threats continue to evolve, small businesses must adopt proactive cybersecurity measures to protect their sensitive data and operations. By embracing automation, small businesses can effectively enhance their cyber defense capabilities. From automated threat detection and patch management to multi-factor authentication and data backups, these automation strategies provide small businesses with robust security solutions despite limited resources. Small businesses can mitigate risks, safeguard their digital assets, and focus on growth and innovation by automating cybersecurity tasks.

    What Is Ethical Hacking? Unraveling the Enigma of Cybersecurity's Guardians

    In the vast realm of cyberspace, where shadows dance and digital footprints intertwine, the concept of hacking often conjures up images of malicious cyberattacks and occult breaches. But hidden within this landscape, some cybersecurity professionals use their skills to protect and defend. They are known as ethical hackers, the unsung heroes of our technology-driven world.

    The Vital Role of Ethical Hackers in Cybersecurity

    The role of an ethical hacker is vital within the cybersecurity industry. Armed with a wealth of knowledge and experience, these experts embark on a noble quest: to uncover vulnerabilities and safeguard the integrity of digital systems. Their mission? To perform risk assessments and test the foundations of security in organizations.

    To achieve their goal, ethical hackers immerse themselves in the expanse of security breaches, exploits, and vulnerability scenarios. They leave no stone unturned. Their goal is to protect organizations from malicious attacks, ensuring that the digital fortress remains untouchable.

    Don't underestimate the importance of ethical hacking. As the world becomes increasingly interconnected, cybersecurity has never been more pressing. According to a report by Emergen Research, the cybersecurity industry is expected to expand at a compound annual growth rate (CAGR) of 12.0% to 13.4% from 2022 to 2030. This surge in demand reflects the critical importance of ethical hackers in fortifying digital infrastructure against the relentless onslaught of cyber threats.

    Embracing the Journey: Continuous Learning and Certification for Ethical Hackers

    Becoming an ethical hacker requires diverse skills and knowledge. Understanding the types of hackers is crucial, as it provides insights into how they operate. Armed with this knowledge, ethical hackers delve into cutting-edge tools and techniques. They leverage their skills to identify vulnerabilities and devise countermeasures.

    The responsibilities of an ethical hacker transcend merely identifying weaknesses. They also recommend solutions and implement robust security measures. Their expertise helps organizations fortify their defenses, minimize breaches, and protect sensitive data from falling into the wrong hands.

    The Tools of Ethical Hacking

    Curious about the tools an ethical hacker uses? They have access to a diverse range of tools. These tools allow them to probe and analyze digital systems, uncover weaknesses, and assess the resilience of security measures. While the specific tools vary based on the objectives and preferences of individual ethical hackers, there are several standard tools they employ. 

    One such tool is the ever-popular Nmap (Network Mapper). Nmap is a powerful network scanning and mapping tool that allows ethical hackers to examine hosts and services on a network. It helps identify open ports, detect potential entry points, and provides a comprehensive overview of the network's structure. By leveraging Nmap's capabilities, ethical hackers gain valuable insights into the system's vulnerabilities, enabling them to devise targeted strategies for fortification.

    Another essential tool in the ethical hacker's arsenal is Metasploit. Metasploit is an open-source framework that facilitates penetration testing and vulnerability assessment. It offers a wide range of exploits, payloads, and auxiliary modules, empowering ethical hackers to simulate real-world attack scenarios. Employing Metasploit's extensive collection of exploit codes, ethical hackers can uncover weaknesses, gain unauthorized access, and assess the system's defenses against potential threats.

    WireShark, a network protocol analyzer, is another indispensable tool for ethical hackers. It allows them to capture and examine network traffic, providing deep insights into the packets traversing the network. With WireShark, ethical hackers can scrutinize individual packets, analyze network protocols, and identify suspicious or malicious activity. This tool enables them to detect anomalies, trace the origin of potential security breaches, and assess the security posture of the network.

    Additionally, Burp Suite, a web application security testing tool, plays a significant role in the ethical hacker's toolkit. Burp Suite allows hackers to intercept, analyze, and modify HTTP/S traffic between web browsers and servers. It helps uncover vulnerabilities in web applications, including SQL injection, cross-site scripting (XSS), and CSRF (Cross-Site Request Forgery). Ethical hackers can use Burp Suite to identify weaknesses in web applications, effectively fortify defenses, and protect against potential attacks.

    These are just a few examples of the standard tools ethical hackers use. Ethical hacking is constantly evolving, and new tools and techniques regularly emerge to adapt to the ever-changing threat landscape. Ethical hackers leverage these tools to assess and strengthen the security posture of organizations, helping safeguard sensitive information, protect against cyber threats, and ensure the resilience of digital systems in an increasingly interconnected world.

    Ethical Hackers Need Ongoing Education

    For aspiring ethical hackers, continuous learning and certification awaits. Acquiring industry-recognized certifications not only validates their skills, but also opens doors to a myriad of career opportunities. Certifications such as Certified Ethical Hacker (CEH), Offensive Security Certified Professional (OSCP), and Certified Information Systems Security Professional (CISSP) provide the credentials to excel in this demanding and ever-evolving field.

    Conclusion

    The expertise of digital hackers safeguards digital life, upholding the principles of integrity, confidentiality, and trust. The growth of the cybersecurity industry reflects the need for ethical hackers, stressing the ever-present demand for their unique skills. So, acknowledge and appreciate these unsung heroes, the vanguards of cybersecurity who tirelessly battle in the shadows to preserve the sanctity of the digital realm -- and be glad they're there. 

    References:

    "Cybersecurity Market, By Component (Hardware, Solution, Service), By Security Type, By Solution, By Application (IT & Telecom, Retail, BFSI, Healthcare, Defense & Government, Manufacturing, Energy, Others), By Region Forecast to 2032". Www.Emergenresearch.Com, 2023, https://www.emergenresearch.com/industry-report/cyber-security-market. Accessed 25 May 2023.

    Cyber Insurance: Why Every Business Needs Coverage

    Businesses in all industries are heavily reliant on technology. Unfortunately, this also makes companies a prime target for a variety of cyber attacks. Despite the best efforts in cybersecurity, no company is entirely immune to these risks. One way to help limit these concerns is to purchase cyber insurance for your business. Often overlooked or deemed unnecessary in the past, cyber insurance is quickly becoming a business necessity, providing a safety net for whenever things go wrong.

    The Ever-Present Threat of Cybercrime

    Cybercrime remains a big threat in the digital landscape. The lucrative nature of these attacks makes businesses of any size a top target of cybercriminals. The cost of a data breach can often cost millions of dollars, which is why it's essential for companies to take additional steps to protect themselves. Cyber threats are also becoming much more sophisticated and more difficult to avoid.

    A cybersecurity incident isn't just about financial loss. One incident can also lead to reputational damage, loss of customer trust, regulatory fines, and even business closure. Developing a robust cybersecurity system is crucial, but it's not foolproof. Investing in cybersecurity insurance for your business can give you much-needed protection against these threats.

    Cyber Insurance: An Essential Safety Net

    Like any insurance, cyber insurance covers financial losses related to cyber incidents. This can include costs associated with data recovery, notification of affected parties, legal fees, public relations efforts, business interruption, and even extortion payments demanded by hackers. In essence, cyber insurance is designed to help a company recover from a cyber attack by mitigating the financial impact. It provides an essential safety net that can make the difference between a company going out of business and staying afloat after a cyber-attack.

    Coverage Tailored to Your Business

    One of the key advantages of cyber insurance is that it can be tailored to fit the specific needs and risk profile of your business. Different businesses have different cyber risks. For example, a healthcare provider may need coverage for patient data breaches, while a retail business might require protection against credit card fraud. Cyber insurance policies can be customized to provide the coverage your business needs most.

    The Rising Importance of Cyber Insurance

    Cyber insurance is growing in importance as businesses become more digital and data-driven. It's not just about whether your business will experience a cyber-attack, but when it will happen. Data privacy laws are becoming more stringent, which means businesses can face hefty fines for failing to adequately protect customer data. Cyber liability insurance can provide coverage for these regulatory fines.

    Cyber Insurance - An Investment Worth Making

    Investing in cyber insurance is like putting on a seatbelt while driving. It doesn't prevent an accident, but it can significantly mitigate the damage if one occurs. Cyber insurance is an essential part of a comprehensive risk management strategy, providing financial protection and peace of mind in a digital age fraught with cyber threats. Regardless of your business size or industry, having cyber insurance can help you navigate the aftermath of a cyber-attack by protecting your financial resources.

    PSL’s Easy Guide to Understanding Cybersecurity

    The world of cybersecurity can often feel like a maze of technobabble and obscure acronyms. Yet in an era where our lives increasingly depend on digital infrastructure, it's important to have a basic understanding of the terminology involved. Learning about cybersecurity can help you avoid common mistakes and limit the chance of becoming a victim of these crimes.

    Here is an overview of common cybersecurity terms.

    1) Cybersecurity

    Let's start with the basics. Cybersecurity is simply the defense against digital attacks that target computers, mobile devices, networks, and servers. These attacks are typically aimed at accessing, changing, or destroying sensitive information, extorting money from users, or interrupting normal business processes.

    2) Malware

    Malware is any malicious software that can damage or infiltrate computers without the user's consent.

    Here are the most well-known types of malware.

    Virus

    Like a biological virus, a computer virus attaches itself to a host (in this case, a file), and spreads when the file is shared, infecting other files and systems.

    Worm

    A worm is a standalone type of malware that will replicate itself to easily spread to other computers through a network.

    Trojan

    Named after the Greek myth, the Trojan horse, a Trojan is a form of malware that attempts to disguise itself as a normal program or file to trick users into either downloading or installing it.

    Ransomware

    This type of malware encrypts the user's files and demands payment to unlock them.

    Spyware

    Spyware is malware that's specifically designed to spy on user activity without their knowledge.

    3) Phishing

    Phishing is a common attack that tries to gain personal information by using deceptive emails and websites. The attacker, masquerading as a trustworthy entity, uses a variety of strategies to trick the victim into opening an instant message, email, or text message.

    4) Firewall

    A firewall is an IT security tool that controls network traffic using predetermined security rules. Think of it as a digital barrier limiting unauthorized access to your network or computer.

    5) VPN (Virtual Private Network)

    A VPN masks your internet protocol (IP) address to make your online actions nearly untraceable. VPN services establish encrypted connections to provide much greater privacy while using the internet.

    6) Encryption

    Encryption converts data into a code to prevent unauthorized access. When data is encrypted, it appears as gibberish unless you have the decryption key to convert it back to its original form.

    7) Two-Factor Authentication (2FA)

    2FA is a common security process in which users must provide two different authentication factors to gain access to an account. For example, in addition to a password, you might also need to enter a code sent to your phone.

    8) Darknet/Dark Web

    The darknet or dark web refers to encrypted online networks that aren't indexed by search engines, and they are often used for illicit activities. You need special software (like Tor) to access it.

    9) Data Breach

    A data breach happens whenever secure or private information is released into an untrusted environment. This is often due to a cyberattack on a database, leading to sensitive data being exposed, copied, or used.

    10) Botnet

    A botnet uses a group of private computers that are unknowingly infected with malicious software and are controlled as a group to perform various tasks. Many times botnets are created to send out spam emails or carry out Distributed Denial of Service (DDoS) attacks.

    Closing Thoughts

    Understanding cybersecurity is not just for the tech-savvy; it's for everyone. We are all potential targets for cyber threats, and comprehension of basic cybersecurity terminology can make a significant difference in safeguarding ourselves and our digital assets.

    Employing cybersecurity measures also helps to keep your digital data safe. This might include using a VPN, enabling two-factor authentication, or simply being wary of suspicious emails to prevent phishing attacks.

    Ultimately, it's not necessary for everyone to be a cybersecurity expert, but a basic understanding of the key terms can be an empowering first step in better securing your digital life. This newfound knowledge can provide you the confidence to navigate the online world with more safety and assurance.