2 auditors miss $27M Penpie flaw, Pythia’s ‘claim rewards’ bug: Crypto-Sec

Australia’s corporate watchdog has been given the nod to shut down 95 “hydra” companies that it suspects engaged in crypto investment and romance scams, known as “pig butchering.”The Australian Securities and Investments Commission’s application to wind up the companies was approved by the Federal Court of Australia on just and equitable grounds after ASIC found that most of the companies had been incorporated with false information.Many of these companies were set up purporting to provide “genuine services” but were instead believed to be scamming their victims, ASIC Deputy Chair Sarah Court said in an April 8 statement.“There appears to be a common pattern of scam activity in the nature of ‘pig butchering,’” Justice Angus Stewart said in an April 4 court ruling after looking at 48 “Reviews of Misconduct” from 17 companies accused of facilitating romance scams. The judgment was made on March 21.Source: Rocky PerrottaPig butchering scams involve scammers building fake relationships with victims to win their trust before convincing them to invest in a fraudulent crypto or financial scheme.The securities regulator also suspects that much of the scam activity is coming from Southeast Asia.Insolvency and restructuring advisers Catherine Conneely and Thomas Birch of Cor Cordis have been appointed as joint liquidators of the 95 companies.Related: Australian regulator’s ‘blitz’ hits crypto exchanges, money remittersNearly 1,500 claims by “investors” had been received by the provisional liquidators, amounting to total claims of over $35.8 million, according to the court order.The claimants are based in 14 countries, including Australia, the US, Cameroon, Ghana, India, Nepal, the Philippines and France.The provisional liquidators found that only three of the 95 firms had assets to their name and recommended that the other 92 companies be wound up and immediately deregistered.ASIC shutting down scam websitesASIC said it has been removing around 130 scam websites each week of late, bringing its total to over 10,000 sites, which have included over 7,200 fake investment platform scams and 1,564 phishing scams.“However, these scams are like hydras: you shut down one and two more take its place. That’s why we’re warning consumers that the threat of scams and identity fraud remains high. We remind consumers to be vigilant,” Court said.Australia’s National Anti-Scam Centre recently reported a 26% fall in scam losses to $2 billion in 2024, while the number of scam reports also fell by 17.8% to 494,732.Magazine: Financial nihilism in crypto is over — It’s time to dream big again

Authorities in Spain have arrested six people who helped operate a global AI-powered investment scam that stole over $20 million from at least 208 victims. The scammers would swindle victims up to three times. After stealing an initial sum through the investment scam, the fraudsters contacted victims twice more, masquerading as investment managers and then as authorities, offering to recover the stolen funds for a fee, Spanish police said in an April 7 statement. The scammers used deepfake ads of “national personalities” promising high returns on crypto investments, and would occasionally pose as financial advisers or even feign romantic interest to lure in victims.  Experts have been warning of a rise in AI-enhanced scams. Blockchain analytics firm Chainalysis said in its Feb. 13 Crypto Scam Revenue 2024 report that generative AI is making “scams more scalable and affordable for bad actors to conduct.”🚩Detenidas seis personas por estafar más de 19 millones de euros usando #inteligenciaartificial🔴Engañaban a las víctimas a través de anuncios manipulados con #IA para que realizaran inversiones con #criptomonedas en productos supuestamente muy rentables pic.twitter.com/rMrdgBpOYz— Policía Nacional (@policia) April 7, 2025“Victims were not selected randomly; instead, algorithms selected those whose profiles matched the cybercriminals’ searches,” Spanish police said.“Once they selected their victims, they placed advertising campaigns on the websites or social networks they used, offering them cryptocurrency investments with high returns and zero risk of asset loss — investments that, obviously, turned out to be a scam.” When victims could not withdraw the funds, most realized it was a scam, according to Spanish police; however, the ruse didn’t end there. Scammers would trick victims again with follow-up scamsThe cybercriminals would then contact victims again, posing as investment managers, claiming the stolen funds were frozen and could be recovered if they paid a deposit. “The victims, hoping to finally recover their money, made the deposit without realizing they had been scammed again,” Spanish police said.The scammers would then contact victims a third time, this time posing as Europol agents or lawyers from the United Kingdom, offering to return the stolen funds if the victim paid the corresponding taxes in the country where it was blocked.Related:  Crypto broker breaks ankles while fleeing kidnappers in SpainSpanish authorities arrested six people involved in the syndicate, charging them with fraud, money laundering and falsifying documents in a criminal organization. During a raid on the alleged leader behind the scam, Spanish authorities seized numerous cell phones, computers, hard drives, a simulated weapon and extensive documentation. Several people linked to the plot have also been identified in other countries, and the syndicate allegedly created a large number of fake companies to channel the stolen funds.  “Furthermore, the members of the organization used multiple false identities. In the case of the leader, for example, he used more than 50 different identities,” Spanish police said.Magazine: Bitcoin heading to $70K soon? Crypto baller funds SpaceX flight: Hodler’s Digest, March 30 – April 5

The US Securities and Exchange Commission has released the list of executives from US crypto and finance giants that will take part in a roundtable discussion on crypto trading regulation.On April 7, the regulator said its upcoming April 11 roundtable will discuss how it should handle crypto trading rules, calling it “Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading.”It will be the second in a series of discussions on crypto, headed by its recently-formed Crypto Task Force.Taking part are Uniswap Labs chief legal officer Katherine Minarik, Cumberland DRW associate general counsel Chelsea Pizzola and Coinbase institutional product vice president Gregory Tusar — all firms that had once been in the regulator’s scope.Under the Biden administration, the regulator sued Cumberland DRW in October and Coinbase in June 2023 for alleged securities law violations, but both lawsuits were dropped this year under the Trump administration.The SEC also started an investigation for possible enforcement action into Uniswap Labs in April 2024, which was dropped in February with no further action.Also taking part in the roundtable are New York Stock Exchange product chief Jon Herrick, crypto brokerage FalconX business lead Austin Reid, securities tokenizing firm Texture Capital CEO Richard Johnson and the University of California, Berkeley finance chair Christine Parlour.Source: SECDave Lauer, co-founder of the advocacy group We the Investors and Tyler Gellasch, CEO of the not-for-profit Healthy Markets Association, will also take part, while law firm Goodwin Procter partner Nicholas Losurdo will moderate the discussion.Representing the SEC will be acting chair Mark Uyeda, Crypto Task Force chief of staff Richard Gabbert and Commissioners Caroline Crenshaw and Hester Peirce.The roundtable is the second crypto-focused discussion in a series of five that the SEC dubbed the “Spring Sprint Toward Crypto Clarity.” The first was on March 21, regarding the legal status of crypto, while three future discussions will cover custody, tokenization, and decentralized finance (DeFi).SEC’s Uyeda orders review of staff crypto commentsThe roundtables come as the SEC, under President Donald Trump, works to revamp its oversight of the crypto industry, with its latest action being to review staff statements on crypto so they can possibly be changed or withdrawn.Uyeda said in an April 5 statement shared by the SEC on X that due to Trump’s executive order on deregulation and recommendations from the Elon Musk-led Department of Government Efficiency, or DOGE, he was reviewing seven staff statements, five of which concerned crypto.Source: SEC“The purpose of this review is to identify staff statements that should be modified or rescinded consistent with current agency priorities,” Uyeda said.Related: SEC paints ‘a distorted picture’ of USD stablecoin market — Crenshaw The first on the list was an April 2019 analysis from the Strategic Hub for Innovation and Financial Technology on how crypto sales could be investment contracts under the securities defining Howey test — an argument the agency had made to sue multiple crypto firms for legal violations.Also up for review are two Division of Investment Management statements, one from May 2021 asking investors to consider the risks of funds with exposure to Bitcoin futures and a November 2020 statement asking for feedback on whether state-chartered banks meet standards to be qualified custodians.The SEC will also look into a December 2022 Division of Corporation Finance statement that urged SEC-regulated companies to evaluate their disclosures to mention if a slew of crypto firm bankruptcies and collapses at the time impacted their business.Finally, the agency will review a Division of Examinations alert from February 2021 that said, “a number of activities related to the offer, sale and trading of digital assets that are securities present unique risks to investors.” Legal Panel: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set