Chinese official jailed for selling secrets for crypto, WazirX fake account suspect nabbed, S. Korean YouTube finfluencer arrested for scam, and more.
by Yohan Yun 5 min November 14, 2024
Life sentence for Chinese official in crypto espionage case
A former Chinese government employee, identified as Wang Moumou (a placeholder name that translates to “so-and-so” used in China to anonymize individuals) has been sentenced to life imprisonment for selling state secrets to foreign intelligence agencies in exchange for 1 million yuan (about $138,000) in cryptocurrency payments.
China’s Ministry of State Security said in a WeChat post that Wang racked up big losses and debts from his crypto trading.
Desperate for additional income, he sought part-time work on an online forum, revealing he was a government employment in the process. This post attracted the attention of a foreign intelligence agent, who offered crypto payments for classified information.
Wang gradually attempted to distance himself from the foreign agency but was blackmailed and threatened with exposure if he stopped cooperating, the ministry said.
However, China has also employed used crypto payments for espionage on foreign targets.
In September, Taiwan indicted two military officers for selling at least seven classified military documents to mainland Chinese contacts for 8,151 Tether (USDT).
The previous month the Taiwan High Court sentenced eight individuals to prison for leaking military secrets to China in exchange for an undisclosed sum in cryptocurrency. Unlike in China, the punishments were less severe, with the mastermind receiving the longest sentence of 13 years.
Taiwan’s government watchdog, the Control Yuan, reported a sharp rise in Chinese espionage cases over the past decade, noting that cryptocurrency is increasingly used to evade detection.
WazirX hack suspected account dealer arrested
Delhi Police have arrested a suspect in connection with the $235 million cyberattack on Indian cryptocurrency exchange WazirX.
According to charges reviewed by local media allege that SK Masud Alam created a fake WazirX account, which he sold to Telegram user “M Hasan.” Hasan reportedly used the dummy account to breach WazirX’s platform.
The police report also accuses Liminal Custody, a third-party digital asset custody firm that secures WazirX’s wallets, of failing to cooperate fully. Despite multiple requests, Liminal allegedly withheld critical information, complicating the investigation.
The cyberattack, which occurred on July 18, targeted a multi-signature wallet requiring six approvals—five from WazirX and one from Liminal Custody—and cost WazirX nearly 45% of its assets.
The police charges also note alleged non-cooperation from Liminal Custoy, a third-party digital asset custody firm responsible for WazirX’s wallet security. The charges claim that Liminal failed to provide critical information despite several requests, which hampered efforts to fully trace the cyber heist.
The cyberattack on WazirX took place on July 18, targeting a multi-sig wallet with six signatories—five from WazirX and one from Liminal Custody. This breach cost WazirX nearly 45% of its holding assets.
Following a preliminary investigation, WazirX claimed a security flaw in Liminal’s system caused the breach. In response, Liminal accused WazirX of spreading disinformation, asserting that WazirX still uses its services despite claims to have ended their partnership.
WazirX’s security exploit is one of the biggest cyber attacks against a cryptocurrency business this year. Several security experts blamed North Korean hacking group Lazarus for the attack against the Indian exchange.
YouTube crypto guru arrested in $230 million fraud scheme
South Korean police have arrested 215 individuals tied to an unauthorized investment advisory firm accused of defrauding investors. Among those detained is a 40-something YouTuber with 620,000 subscribers, referred to by police as “Mr. A.” He and 11 others face formal charges.
According to the Nov 13 announcement, Mr. A and his team raised 325.6 billion won (approximately $230 million) from 15,304 individuals between December 2021 and March 2023, under the guise of selling and issuing 28 different cryptocurrencies.
Mr. A allegedly ran the advisory firm and pivoted to crypto sales after his botched stock recommendations in 2020 led to mass refund requests.
He and his associates promoted their crypto offerings aggressively via YouTube and advertising, using a database of over 9 million phone numbers obtained through these channels. Marketing tactics included phrases like “20x your principal” and “a chance to change your destiny,” even urging individuals to sell their apartments or take out loans to buy in.
Of the 28 cryptocurrencies offered, six were self-issued and listed on overseas exchanges. Police suspect Mr. A’s group inflated these tokens’ prices through wash trading, then sold them to investors at a premium. The remaining 22 coins were not self-issued but had minimal information and low trading volumes.
The victims, primarily middle-aged and elderly, included some who lost up to 1.2 billion won (around $850,000). One investor reportedly sold an apartment to fund the investment, only to face steep losses.
Following complaints in early 2023, police traced 1,444 cryptocurrency accounts linked to the scam. Mr. A, who had fled to Australia, was eventually apprehended, and authorities seized 22 Bitcoins from him. Police have also requested pre-trial asset seizures totaling 47.8 billion won (about $34 million) from misappropriated funds.
Thai raids loot crypto mining rigs
Thai police conducted raids starting over the weekend, seizing 286 crypto mining rigs in Surat Thani and Chachoengsao provinces, local media reported.
In the southern province of Surat Thani, authorities searched seven commercial buildings and two homes over the weekend, arresting two 30-year-old suspects. Police seized 111 mining rigs, 10 routers, and 10 power meters modified to bypass electricity charges. One suspect, identified as “Nathapong,” reportedly rented the buildings and owned the two homes. His financial records show transactions exceeding $1.1 million over the past 18 months.
The operation followed reports of deserted buildings with modified electricity meters siphoning power for mining operations. Authorities found high electricity usage with minimal billing, raising suspicion of power theft.
In Chachoengsao, east of the nation’s capital Bangkok, officials uncovered another mining site in an abandoned warehouse on Nov. 12, confiscating 109 active mining machines and 66 additional units awaiting installation.
Authorities estimated the power theft across both provinces at around 20 million baht ($570,000).
Crypto mining-related electricity theft has surged in Southeast Asia since China’s 2021 mining ban.
Indonesian police shut down 10 mining sites with over $1 million in stolen power, and Laos’s state energy provider cut off power to miners.
Meanwhile, Malaysian authorities recently made a statement by steamrolling 1,000 mining rigs on video.
This weekend’s raids are not Thailand’s first. In April, authorities confiscated mining rigs valued at over $5.8 million in a similar electricity theft case.
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Yohan Yun
Yohan Yun is a multimedia journalist covering blockchain since 2017. He has contributed to crypto media outlet Forkast as an editor and has covered Asian tech stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking, and experimenting with new recipes.
