Banks Introduce Confirmation of Payee to Tackle Fraud

The Confirmation of Payee (CoP) system was launched in October 2018 but implementation was delayed multiple times. Now under Payment Systems Regulator rules the six key banking groups—Barclays, RBS, Lloyds, HSBC, Nationwide, and Santander and their subsidiary banks—have a deadline of 30th June to execute the system for Faster Payments and Chaps.

Some banks have already introduced it, so if both your bank and your intended recipient are now taking part, you might be inclined to check who is taking your money. If you can identify a mismatch, the payment can be stopped.

In the past, bank transfers would be complete in spite of the name written and the fact that it matched the account and sort code. This allowed scammers to pose as someone else—often authentic people and companies—and fool people into sending money to the wrong account. Customers could also transfer funds to the wrong account by mistyping the account number by mistake.

Bank of Scotland, Halifax, Lloyds, NatWest, RBS, and Ulster Bank are some of the banks that have already introduced the system to facilitate Faster Payments for both individuals and companies. Faster Payments are the most common type of bank transfer, taking under two hours and for sums up to £10,000. By the end of June, banks from the six main groups will also introduce confirmation for Chaps payments, used for huge sums of money. 

After 30 June, banks will be launching the system for Bacs payments, which are mostly adopted for direct payments or by companies to pay salaries. However, the system most likely won’t apply to international payments any time soon.

The Confirmation of Payee system is directed to impede one type of bank transfer scams, namely authorized push payment fraud. According to UK Finance, Britishers lost a staggering amount of £465 million to these scams in 2019. Thit includes unknowingly transferring funds into accounts exploited by criminals or paying for goods and services that were never received.

Last month the Lending Standards Board (LSB) warned that banks aren’t doing enough to protect and compensate victims of this type of fraud, especially their vulnerable customers.

Money Laundering

Bitcoin ATMs face stricter regulations over money laundering

According to experts, Bitcoin ATMs (BATMs) will face stern regulations globally, with countries such as Canada and Germany tightening up anti-money laundering regulations.

A recent report from CipherTrace states that about 74% of transactions made through U.S.-based Bitcoin ATMs were transferred from the country during 2019. The report also states that nearly 88% of funds sent through U.S. crypto ATMs to virtual currency exchanges were exchanged overseas. Exponential growth has been noticed in the figures over recent years, doubling every year since 2017.

CipherTrace CTO John Jeffries thinks that BATMs will become “a greater point of regulatory focus,”  focusing the need for more uniform regulatory enforcement and compliance” regarding crypto ATMs moving forward.

The report got published two days after new rulings took effect that was treating Canadian firms using virtual currencies as Money Service Businesses (MSBs).

According to Bitcoin Foundation Canada, the new legislation will purposedly affect firms that swap crypto for money, referring to Bitcoin ATM operators as the most heavily affected. It is now mandatory for all Bitcoin ATM operators to report all transactions worth $10,000 CAD or more.

The revised proceeds of the Money Laundering and Terrorist Financing Act were passed during Summer 2019 in spite of calls from the mayor of Vancouver to observe a city-wide ban on Bitcoin ATMs over money-laundering issues. According to a report, there are approximately 778 crypto ATMs working in Canada — which is about 10% of the 7,958 terminals across the world.

Last year, the United States Internal Revenue Service (IRS) started an inquiry into illegal uses of cryptocurrencies, underlining potential tax issues as a result of the use of Bitcoin ATMs and kiosks.

The German Financial Market Authority, BaFin took strict action against unlicensed Bitcoin ATMs in March 2020. The crackdown led to the introduction of new anti-money laundering regulations filling gapes in Germany’s existing cryptocurrency regulations.

Crypto currency

Russian police arrest former post office chief for mining crypto

A former Russian regional post office chief was involved in mining cryptocurrencies via the office’s network in a small town, south of Russia. The Russian Police has initiated a criminal investigation against the alleged.

According to RNS, the SU Investigative Committee of Russia, the ex-chief is accused of illegally mining cryptocurrencies with professional equipment using the company’s power system for about six months. 

His plan was traced back to September 2019. As per the local authorities, the Federal Postal Service of Stavropol Territory endured losses over 30,000 Russian rubles ($427.50 U.S. dollars). 

According to the Criminal Code of the Russian Federation, the accused will be charged with “abuse of power.” The investigative committee is currently in the evidence collection phase. Furthermore, the identity of the detained individual was not disclosed by the police yet, as the investigation is still ongoing, and the criminal charges indictment has also not been filed yet.

Internet Fraud

Internet fraud complaints went up by 30% last year

As per Economic Affairs Minister Nathalie Muylle, Belgium’s Economic Inspection Unit received 29% more complaints of Internet fraud in 2019 than last year.

In response to a question from a parliamentarian, Ms. Muylle stated her ministry’s contact point had received 9,142 similar complaints last year, as opposed to 7,082 in 2018, with individuals being a major reason for the increase.

The most common complaints were linked with fraudulent practices, unwelcome publicity, undelivered goods or services, data protection violations, and unwanted deliveries. Most of the complaints are sent to the Economic Inspection Unit.

According to the minister, complaints of online stores’ counterfeiting rose up by 3.3%. By the end of March, 13 charges had been reported, more than half the amount for the last year.

Since 2015, no less than 8,858 fake online stores have been sealed by the Economic Inspection Unit and the Customs Department.

Online Scams

Google launches a new website to educate people about online scams

Hackers are more active during the COVID-19 outbreak than normal routine, considering which Google has introduced a new website to assist people in identifying and preventing internet fraud.

Scamspotter is a website that would inform people regarding how to detect bogus stimulus checks, fake vaccine offers, or other false COVID-19 information. The common techniques adopted by fraudsters are also detected on the website e.g. romance scammers requesting to buy them a gift card or send money.

The website is a collaboration between Google and Cybercrime Support Network, a nonprofit company that assists the victims of internet scams and fraud. Quizzes related to common fraud situations are also available on the internet to aid people in identifying scams, like receiving a message about winning a contest even if a user has not taken part in one.

According to Google, the fraudsters have alarmingly exploited the outbreak. Federal Trade Commission announced that during the COVID-19 epidemic, Americans have approximately lost $40 million to various online scams. It is further predicted that in 2020, more than $2 billion will be stolen through Coronavirus-related or other online scams.

Federal Trade Commission also informed regarding the recent contact tracing scam through text message, a technique used for tracking the spread of the virus. Scammers ask personal information including security number, bank account, or at times credit card number.

The aim of the website is to enlighten and aware the elderly who are more susceptible to scams and lose a greater amount of money as compared to younger citizens, according to Google. The website also urges young people to spread the information to the senior people around them.

Vint Cerf, Google Vice President, stated that it is crucial for everyone to learn to identify the scams for which everyone should put in the effort.


Amazon patents block chain-based product authenticator

The U.S. Patent and Trademark Office approved Amazon’s three-year-old “Distributed ledger certification” filing on Tuesday. The patent reports using DLT to inspire digital trust from the initial stages of an item’s supply chain to the final stages.

Amazon’s system collects and arranges data from distributors, manufacturers, and shippers on an “open framework” that builds a product source across the information depository. This data could be well organized for the consumer.

According to Amazon, these “patchwork” technologies are also unable to enclose the global supply chain. The company is growing ever more crucial to the chain: Its couriers delivered 3.5 billion packages last year, about 46% of the total number.

Against those existing tech shortcomings, Amazon argued that distributed systems provide a captivating solution. DLT can secure data from modification, remove points of failure, and keep away from the managerial issues of centralized authority, like bottlenecks.

Amazon said in the patent that Hyperledger could be a type of DLT used. Amazon wrote: “Trust is earned.” The company’s enormous e-marketplace is flooded with counterfeits, according to the U.S. government. “Once trust is lost, it can often be difficult to regain.”

Amazon launched a counterfeit detection initiative last year called “Project Zero” designed to block fake products. In 2018, Amazon officials told the Wall Street Journal that the company has plans on spending billions of dollars fighting counterfeits.

U.S. lawmakers are aware of Amazon’s counterfeit product problem. The buying public is decidedly more trusting. In a Morning Consult poll, about 39% of respondents stated that they trust Amazon to a great extent. The US Postal Service, which delivers about 1/3rd of Amazon’s packages, ranked higher.

credit card fraud

New York man charged with trafficking credit card details

According to a federal indictment, Vitalii Antonenko, 28, was alleged in the U.S District Court for the District of Massachusetts on Tuesday with plotting to participate in computer hacking, payment card trafficking, and money laundering.

Hundreds of thousands of stolen payment cards were found by law enforcement on Vitalii Antonenko’s computers after arresting him at Kennedy International Airport in Spring 2019. Antonenko was charged with money laundering at the time.

In the recent indictment on Tuesday, prosecutors indicated a multi-pronged money-laundering plot that converted takings of stolen credit card data and sold it for tens of thousands of dollars.

The indictment stated that working with two plotters from 2014 to 2016, Antonenko reportedly accepted at least 114 bitcoin from one, sent about as much bitcoin to the other, and then obtained approximately $40,000 in cash bank deposits 10% below the market rate.

According to law enforcement officials, an undercover agent purchased a victim’s stolen card data from the first schemer in 2016. It further stated the schemer sent Antonenko 4.38 bitcoin the same day they discussed hospitality card data Antonenko still had for sale.

Antonenko also reportedly hacked a “non-profit scientific research institution” in Massachusetts. The indictment, however, does not name either victim.

money laundering

North Korean bankers charged in $2.5 billion money-laundering scheme

The US Department of Justice recently revealed criminal charges against about twenty-four North Korean bankers, claiming that they were liable for a world money laundering scheme that involved some $2.5 billion in violation of United States regulations.

In what appears to be the primary case against members of the North Korean financial system, twenty-eight North Korean individuals face a variety of charges linked to bank fraud, money concealment, and criminal activities.

The 50-page accusation, signed in February and revealed on Thursday in Washington, DC, court, informs regarding a net of companies and “cover branches” of a state-owned bank that stood up in international countries, including China and Russia to travel round international restricts on the regime’s capacity to spend on a world level. Five Chinese nationals were also charged.

In 2013, the scheme was purposely built in spite of several years of accelerating restrictions placed by the US and other world powers on North Korea that were directed to hamper the country’s growing arms capacity and have disabled their economy.

The allegation states that the Pyongyang-based bank consigned the accused to countries including Russia, China, Thailand, Libya, Austria, and Kuwait, where they resided and operated the new branches, including some 250 front companies.

From there, prosecutors worked with third-party financial facilitators to get items and facilitate transactions in US dollars on behalf of North Korean parties.

As per the allegation, the defendants and other plotters disguised participation in US dollar payments from correlated banks so as to trick the banks into processing payments that the banks otherwise wouldn’t have done.


UAE police show how fraudsters can access your bank account

Abu Dhabi Police has alerted people against the download of unknown apps so they can secure their bank account and credit card information on their devices from cybercriminals and fraudsters.

The warning stated, “Do not download unknown apps. Do not allow these apps to access your contacts, photos if asked for them.” 

Abu Dhabi Police released a video on their Twitter account regarding the information on how cybercriminals can illegally attain bank account details secured in mobile devices and use them for stealing money from the victim’s bank account.

The video displays a Police officer inquiring a suspect for stealing bank account information and defrauding individuals.

The man admits to stealing account details from people by hacking into emails and social media accounts and utilizing the information to loot money from their bank accounts.

Explaining how he obtained the victim’s Whatsapp information, the suspect stated that he provided the victim with an application that hacked into his account.

The man informed the police that his victim couldn’t be tracked because the man has issues in answering phone calls.

He stating that he illegally retrieved Dh350,000 from the victim’s account after successfully attaining his personal bank account details by getting an application downloaded on their device.

Police have alerted people about being watchful for internet fraudsters and avoid storing their personal information on any social media platforms.

The Police advised customers to update their personal information regularly with the bank and save themselves from being a victim of fraud.


Ripple CEO urges US Regulators to embrace Crypto

Brad Garlinghouse, CEO Ripple has encouraged the US regulator “to step up and lean into digital currencies” to avoid lagging behind China in the sector.

Garlinghouse tweeted that “remaining complacent is actually setting us back,” referring to an article that suggests that China’s long-awaited central bank digital currency (CBDC) has the capability to replace the dollar as the global reserve currency.

U.S. financial dominance across the globe is based on both the dollar’s position as the global reserve currency and of its control of the Society for Worldwide International Financial Transactions or SWIFT system.

This makes it convenient to exchange messages between global commercial banks regarding payment orders and acts as an intermediary for the majority of cross-border payments. Management of this system gives the U.S. substantial leverage to applying financial sanctions.

Cross-border exchange of digital currencies do not need the SWIFT system, nor rely on the U.S. dollar.

China’s digital yuan is currently being tested in a number of regions across the country. The U.S. is already years behind China in terms of digital currency, but according to Garlinghouse, a stronger regulatory framework toward public digital assets like XRP can assist in making up for lost ground.

Although a Chinese CBDC would be completely outside U.S. control, Garlinghouse emphasized that XRP is not free from U.S. financial oversight.


Facebook’s Calibra rebrands to Novi wallet

Facebook subsidiary and Libra wallet provider Calibra, has recently been rebranded to Novi. The new wallet product is designed to hold Libra’s different digital currencies. 

Novi stated: “While we’ve changed our name from Calibra,” Furthermore, “we haven’t changed our long-term commitment to helping people around the world access affordable financial services.”

Novi also provided insights on how the product will function. The digital wallet will work as a standalone app and offer interoperability with Facebook’s social messaging applications Messenger and WhatsApp.

Designed to make money sending process as “easy as sending a message,” transactions through Novi will instantly arrive, and will not contain any “hidden charges.” Novi customers will be verified using government-issued identity documents, while “fraud protections” will be incorporated. The wallet will initially be introduced in a limited number of countries.

The release date of Novi is still unclear, however, the project plans to introduce “an early version of Novi when the Libra network is available.”

The Libra project has encountered a number of setbacks as regulators and governments have raised concerns over the perceived risks of the project with respect to the financial crimes, some even referring it as a threat to monetary sovereignty. In 2019, Mark Zuckerberg, CEO of Facebook, stated that his company, which is part of the Libra Association, would quit if the project were released prematurely.

There have been other problems as well. Last year, major companies such as Uber, PayPal, Visa, Stripe, MercadoLibre,, and Mastercard were all in favor of Facebook’s new crypto project.

However, after coercion from U.S. regulators and lawmakers in October, Visa, Mastercard and Stripe were forced to withdraw their associations with Libra. The project has, however, been adding more members since then, including its first state-owned entity, Temasek.

Libra has been hiring ex-U.S. government officials – probably to ease its regulatory path to launch – having hired two former staffers from FinCEN in recent weeks.

Iranian President Calls for National Crypto Mining Strategy

Iranian President Calls for National Crypto Mining Strategy

The Iranian President, Rouhani, recently informed the officials from the Central Bank of Iran (CBI), energy department, and information and communication technology ministries in a seminar for national economic strategy, that a new national strategy should be devised for cryptocurrency mining, including regulation and mining revenue.

Two days ago the Iranian parliament introduced a bill urging to apply the country’s strict foreign exchange and currency smuggling regulation to cryptocurrencies. According to the new law, crypto exchanges operating in the country would have to be registered with the CBI – possibly a step to prevent large sums of capital from leaving the country.

There are severe penalties for smuggling in Iran including fines and imprisonment. Last Summer, Iran was among the first countries to formally recognize cryptocurrency mining as a legal industry. The government is now issuing mining licenses, providing the right to mine to companies, and selling off digital assets that are produced. According to a report in January, Iran had currently issued over 1,000 such licenses in its first six months.

According to Bitcoin Mining Map, currently, Iran has a 4% share in bitcoin’s total hash rate, more than double the percentage at the beginning of September last year. 

Till now it cannot be judged why Rouhani wants Iranian officials to reconsider bitcoin mining regulation. With the heavy sum of money leaving the country, as cryptocurrencies, it’s likely that the President wants to establish that miners, too, aren’t concealing their money from the government’s eyes.

UAE startup replies on Blockchain

UAE startup relies on Blockchain to flatten COVID-19 curve

In5, UAE based start-up incubator, is assisting to design blockchain-based techniques to suppress the Coronavirus outbreak in the country and thus flatten the curve.

As per a report, Liber Health, backed by in5, is one of the platforms used to identify patients using blockchain technology. They are focused on creating a contact-free system to identify the biometric details and check suspected Coronavirus symptoms. 

The company hopes that by analyzing patients in contact with suspected Coronavirus cases, they can aid individuals to apply quarantine measures as soon as possible. It plans to open conversations with public and private sector entities, in the UAE, to execute the strategy and reduce the number of COVID-19 cases.

The CEO of Liber Health, Syed Abrar Ahmed, believes the project could potentially save “thousands of patient lives lost due to medical errors” due to the lack of auditable data; a statement supported by Dr. Sana Farid, CEO of Munfarid, a consulting firm.

in5 plans to leverage 3D printing and robotics to design protective equipment for frontline healthcare workers in the UAE. Their plans aim at keeping children engaged at home while creating a contactless verification system.

Libra Taps another Fincen official

Libra taps another former FinCEN official as general counsel

Robert Werner, former director of FinCEN and OFAC regulatory authorities, has recently joined the Libra Association with tons of regulatory, financial crime compliance and enforcement experience from his previous roles.

This marks Libra’s second hire of a former FinCEN official after Stuart Levey was hired as the project’s first chief executive in early May. Levey is resigning from HBSC for the new role and is expected to join “later this summer” to monitor Libra’s attempts to “combine technological innovation with robust compliance and regulatory framework.”

In April, the Libra Association applied for a payment gateway license with the Swiss Financial Market Supervisory Authority – a move according to it was a significant milestone for Libra Association which is now moving towards its operational phase. 

Before joining Libra, Werner had held senior positions at major financial institutions and was also the founder and CEO of GRH Consulting. Werner stated that he is grateful for the opportunity to be a part of the project. He plans to play an important role in transforming the world payments landscape for empowering billions of people.

Digital Euro

Digital euro successfully tested at the Bank of France

On May 20, Banque de France announced that France has become the first country to successfully test a digital euro, operational on a blockchain.

The bank gave a statement that it tested a sale of securities for central bank digital currency (CBDC) on May 14, indicating the start of more robust testing. 

Although the bank did not provide many details, it did, however, indicate that the current pilot program is directed towards wholesale rather than retail uses for a digital euro. Retail CBDCs would be operational to regular consumers through Bitcoin or Apple Pay. 

A wholesale CBDC would be the province of banks and institutional players — as the French central bank says, “interbank regulations.”

This recent pilot of a securities issuance in exchange for a digital euro was based on software received after the bank’s call for applications on March 27. After the recent announcement, the bank, however, will run similar tests in the upcoming weeks on other files received as part of the same initiative.

Banque de France has been known to be especially active in developing a digital euro. After the departure of the United Kingdom, France will become the second-largest economy in the Eurozone after Germany.

Financial gain

Financial gain surpasses espionage as a top motivator in cyber attacks

NEW YORK – According to Verizon’s annual report on cybercrimes, money surpassed spying as the top motivator for data breaches in 2019.

Approximately nine out of 10 breaches were financially inspired, based on an analysis of about 32,000 incidents and around 4,000 confirmed break-ins in 81 countries, the report stated.

Verizon Business 2020 Data Breach Investigations Report confirmed that data breaches doubled from the previous year. As the COVID-19 outbreak has forced people to remain indoors, cyber attacks on businesses are on the verge of increasing.

As per the report, 86% of breaches were for money, not for purposes of spying. Credential theft, phishing, and compromising business emails were responsible for 67% of the cyber attacks.

As a greater number of businesses moved to internet-based solutions, so did hackers. According to the report, breaches on web and cloud applications rose to 43%, double the amount of the previous year.

Companies such as Facebook and Salesforce have extended remote working orders to at least the end of the year, with more businesses expected to follow step. Tami Erwin, CEO, Verizon Business Group said the “digital transformation” to the work-from-home model during the COVID-19 outbreak has led to a number of security alarms.

He stated: “A lot of people ended up sending workers to work from home without really thinking through what were some of the security elements in the future,” Furthermore, “I think employees working from home are probably more vulnerable to attacks.”

According to Erwin, businesses can shield themselves from cyber attacks by educating employees on phishing, scams, and other fraudulent activities to access sensitive information.

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