Vancouver Washington DC Dallas Tel Aviv Zug Frankfurt. Public Company Trading on Canadian Securities Exchange: BIGG

Transcription

1 Vancouver Washington DC Dallas Tel Aviv Zug Frankfurt Public Company Trading on Canadian Securities Exchange: BIGG

2 Risks of Cryptocurrency Conduit for: Money Laundering Terrorist Financing Sanctions Evasion Fraud Securities/Ponzi Schemes/Theft Resulting in: Adverse regulatory oversight, findings and penalties Adverse reputation risk Increased operational costs Increased risk of additional illicit activity

3 SEC CFTC US Regulation Guidance provided indicates the SEC views most crypto currencies as securities and thus fall under the SEC Regulations: Supreme Court Case - Howie Test: "a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, declared virtual currencies commodities and subject to CFTC oversight. IRS Virtual currency treated as property 10/2018 Info. Reporting Advisory Committee asking for clarification on virtual currency page Public report FinCEN Cryptocurrency exchanges and peer to peer exchangers considered money service business, must abide by same regulations as MSBs. CRYPTOCURRENCY IS GLOBAL, GLOBAL REGULATIONS APPLY

4 Human Trafficking The problem with Cryptocurrency Criminals were early adopters of Bitcoin. Criminal use continues to plague blockchain adoption. Sanctions Evasion Weapons Trafficking Terrorist Financing Illegal Drug Trafficking

5 How to Combat Illicit Use Education and Training Basics to Forensics of Blockchain In person or on-line Compliance at the Gateway Risk scoring with BitRank Verified Identification of known illicit actors Attribution Building the World-Check database for Crypto Forensic Tools QLUE Investigation Services Expert Witness Testimony

6 Management and Staff Training Training on the following topics is suggested. Introduction to Cryptocurrency Central vs. Decentral Basics of Bitcoin and Blockchain Satoshi Nakamoto Blockchain Basics Use of Cryptocurrency in the Dark Web Use of Dark Web Tools Tor, VPN How the Criminal Element Uses Crypto Peer to Peer Exchanges Development of Forensic Investigation Techniques Understand the anatomy of a transaction.

7 Case Study Aaron Shamo Aaron Shamo, 27-year-old male Operated 3 pill presses in his Utah home. He pressed fentanyl tablets into individual doses of synthetic heroin Agents and Task Force officers seized several packages destined for Aaron Shamo shipped from China. One of the tested packages contained 120 grams of fentanyl. He used bitcoin to buy postage for shipping the packages. He was assisted by (customer support team) Drew Wilson, Alexandrya Tonge, 25 Katherine Bustin, 26 Mario Noble, 28 Sean Gygi, 27

8 Case Study Aaron Shamo 1 of the 3 pill presses used by Aaron Shamo, AKA Pharma- Master. Pill presses are regulated by the FDA and are illegal to possess without FDA approval. From December 2015 to November 2016 Aaron Shamo mailed out 5,606 packages containing an unknown number of pills. He had 8,332 verified sales on Alphabay, a darknet marketplace now shut down.

9 Case Study Aaron Shamo A fatal dose of Fentanyl The profit from 1 kg of fentanyl is 1.2 to 1.9 million USD.

10 Case Study Aaron Shamo

11 Because fentanyl is so lethal a hazmat team was called in to assist with the scene.

12 Zip Codes of Shamo Shipments

13 1.2 million on floor in his basement Thousands more bitcoin. Operation grossed approximately 2.8 million in less than a year.

14 Monitoring at the Gateway BitRank Verified

15 Advanced Analytic Tools QLUE

16 Advanced Analytic Tools Bitcoin Address to search

17 Advanced Analytic Tools

18 Advanced Analytic tools Indicators of Illicit Activity

19 Case Study Using Visual Analytics Suspicious Baltimore Bitcoin ATM Activity Bitcoin ATM operator suspected that the customer was inserting illicit drug proceeds into the ATM to buy bitcoin.

20 Case Study using Visual Analytics Suspicious Bitcoin ATM Activity

21 Case Study using Visual Analytics Suspicious Bitcoin ATM Activity

22 Case Study using Visual Analytics Suspicious Bitcoin ATM Activity

23 Case Study using Visual Analytics Suspicious Bitcoin ATM Activity With the graphing and heuristic clustering investigators can see the transfers of bitcoin to 17 different wallets in minutes. A similar case was worked by federal law enforcement agents using blockchain.info and excel. It took weeks, the agent made a mistake in excel and had to start over.

24 Building Credibility and Trust in Crypto Training from reputable sources Risk mitigation solutions for fiat to crypto and crypto back to fiat transactions. Forensic Investigation Tools Forensic Investigation Service Expert Testimony Service

25 Questions? More Information? Teresa Anaya Director of Financial Institutional Strategy Certified Fraud Examiner Certified Anti-Money Laundering Specialist Certified Bitcoin Professional Phone: