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Sophos Uncovers How Criminals are Leveraging “As-a-Service” Business Model with Sha Zhu Pan Kits to Expand Cryptocurrency Fraud

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Sophos, a global leader in innovating and delivering cybersecurity as a service, today revealed how sha zhu pan scammers—those conducting elaborate, romance-based cryptocurrency fraud—are leveraging a business model similar to cybercrime “as-a-service” by selling sha zhu pan kits on the dark web, globally expanding to new markets.

Sophos details these advanced sha zhu pan operations (also known as pig butchering) in the article, “Cryptocurrency Scams Metastasize into New Forms.”

Originating from organized crime gangs in China, the new kits provide the technical components needed to implement a specific pig butchering scheme called “DeFi savings.”

Criminals position DeFi savings scams as passive investment opportunities that are similar to money market accounts, often times to people who have no understanding of crypto. Victims only need to connect their crypto wallet to a “brokerage account,” with the expectation that they will earn significant interest from their investment.

Victims are adding their crypto wallets to a fraudulent cryptocurrency trading pool, which the fraudsters then empty.

“When pig butchering first appeared during the time of the COVID pandemic, the technical aspects of the scams were still relatively primitive and required a lot of effort and guidance to successfully scam victims. Now, as the scams have become more successful and the fraudsters have refined their techniques, we’re seeing a similar evolution to what we’ve seen with ransomware and other types of cybercrime in the past: the creation of an as-a-service model. Pig butchering rings are creating ready-made DeFi app kits, which other cybercriminals can purchase on the dark web. As a result, new pig butchering rings that are unaffiliated with Chinese organized crime groups are appearing in areas like Thailand, West Africa and even the U.S.

As with other types of commercialized cybercrime, these kits lower the entry barriers for cybercriminals interested in pig butchering and vastly expand the victim pool. Last year, pig butchering was already a multi-billion-dollar fraud phenomenon; sadly, the problem is likely only to grow exponentially this year,” said Sean Gallagher, principal threat researcher, Sophos.

Sophos X-Ops has been tracking the evolution of pig butchering schemes for two years. The earliest iterations—dubbed by Sophos as “CryptoRom” scams—involved connecting with potential victims on dating apps and then convincing them to download fraudulent crypto trading applications from third-party sources. For iOS users, these scams required victims to download an elaborate workaround that allowed scammers to bypass security on victims’ devices and gain access to their wallets.

In 2022, the scammers continued to refine their operations, this time finding ways to bypass app store review processes to sneak their fraudulent apps into the legitimate App Store and Google Play Store. This was also the year that a new scam pattern emerged: fake cryptocurrency trading pools (liquidity mining).

In 2023, Sophos X-Ops uncovered two vast pig butchering rings—one based out of Hong Kong and one based out of Cambodia. These rings leveraged legitimate crypto trading apps and created elaborate fake personas to lure victims and steal millions from them. Further investigation revealed that pig butchering operators were adding AI to their arsenal.

At the end of 2023, Sophos X-Ops uncovered a vast liquidity mining operation involving three separate Chinese organized crime rings targeting nearly 100 victims. During the investigation into this operation, Sophos X-Ops first noticed the availability of pig butchering scam kits.

In the most recent pig butchering operations that Sophos X-Ops has investigated, the fraudsters have removed any previous technological impediments, as well as significantly lowered the amount of social engineering required to steal from victims. In the DeFi savings schemes, victims now engage in fraudulent crypto trading through legitimate, well-known cryptocurrency apps and give (albeit unknowingly) the scammers direct access to their wallets. In addition, the scammers can conceal the wallet network that launders stolen crypto, making the scams harder for law enforcement to track.

“The DeFi savings scams are the culmination of two years of pig butcherers refining their operations. Gone are the days when the scammers had to convince victims to download some strange app or transfer the crypto themselves into a soon-to-be-stolen digital wallet.

“The fraudsters have also learned how to better ‘market’ their schemes. They’re taking advantage of how liquidity mining pools operate to steal the funds by telling victims it’s a simple investment account. This is often an easier sell, especially since most people don’t understand the ins and outs of cryptocurrency trading and everything is done under the guise of trusted brands.

“In other words, it’s never been easier for people to fall victim to pig butchering, which means it’s never been more important to be aware that these scams exist—and know what to look out for,” said Gallagher.

Tips to Avoid Falling Prey to Pig Butchering

To avoid falling victim to a pig butchering scam, Sophos recommends the following:

·       Be skeptical of strangers that reach out via social networking sites like Facebook or texts, especially if they want to quickly move the conversation to a private messenger like WhatsApp

o   This also applies for new matches on dating applications—especially if the stranger begins talking about trading in crypto

·       Always be weary of any “get rich quick” scheme or cryptocurrency investment opportunity that promises large returns in a short amount of time

·       Be familiar with the lures and tactics of romance scams and investment scams. Non-profits like the Cybercrime Support Network have resources that can help

·       Anyone who believes they have fallen victim to a pig butchering scam should immediately withdraw any funds from any affected wallet and contact law enforcement

Timeline of Sophos’ Two-Year Investigation into Pig Butchering

2021

·    Sophos X-Ops spots the first “CryptoRom” fake trading apps targeting users in Asia

·    Sophos X-Ops then discovers these scammers expanding their operations, targeting victims in the U.S. and Europe

2022

·       Sophos X-Ops discovers more fake apps from CryptoRom scams, as well as a new workaround scammers are using so that victims can successfully download the fake apps on their iOS devices

·       A new type of pig butchering scam emerges: liquidity mining

2023

·       Sophos X-Ops uncovers the first fake apps for CryptoRom schemes found in the Apple App Store as scammers find ways to bypass the app store review process

·       Sophos X-Ops uncovers two vast pig butchering rings operating out of Hong Kong and Cambodia. Rather than using fake apps, these scammers are now exploiting legitimate crypto trading applications, as well as building elaborate personas to hook their victims

·       Sophos X-Ops finds more fake apps—and learns that pig butcherers are now adding generative AI to their toolkit

·       The story of a man who lost $22,000 in a week to a pig butchering scheme leads Sophos X-Ops to a vast liquidity mining scam operation being run by three different Chinese organized crime rings

2024

·       Sophos X-Ops uncovers the most technically sophisticated pig butchering scheme yet—“DeFi savings” scams. These schemes and other crypto-based scam operations are for sale as kits, leading to pig butchering rings popping up in new areas of the world

For more about the current DeFi savings schemes and the evolution of pig butchering in “Cryptocurrency Scams Metastasize into New Forms” go to Sophos.com.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Barred Phone Lines:  Lagos Lawyer Demands N10Bn Damages from Telcos, NCC

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Mr. Olukoya Ogungbeje, Lagos-based activist and lawyer, has dragged telecommunication companies operating in Nigeria as well as the Nigerian Communications Commission (NCC) to a Lagos Federal High Court, challenging the recent barring of phone lines of citizens.

Barred Phone Lines:  Lagos Lawyer Demands N10Bn Damages from Telcos, NCC

Ogungbeje joined Dr. Aminu Maida, chief executive officer of NCC, and MTN Nigeria Communications Plc, Airtel Networks Nigeria Ltd. and Emerging Markets Telecommunication Services Ltd. (EMTS 9 Mobile).

The lawyer, aside from seeking the order for award of N10 billion as general damages is also seeking the following reliefs: “A declaration that the act and action of further barring, restricting and deactivating of the applicant’s phone lines/SIM cards and the phone lines/SIM cards of Nigerian citizens by the 2nd, 3rd, 4th, 5th, and 6th respondents, upon the directive of the 1st and 2nd respondents from 28th of February 2024 till date, despite a valid and subsisting order of court granted against the respondents is wrongful, illegal, unlawful, undemocratic, unconstitutional and thus prejudicial against applicant’s and other affected Nigerian citizens fundamental rights to fair hearing as enshrined under Section 36 of the 1399 constitution of the Federal Republic of Nigeria.

“A declaration that the respondents being creations and creatures of law are subject to the court of law and the judicial powers of the courts of law and under a legal duty and constitutional obligation to obey valid and subsisting order of court as enshrined under Section 6 (6) (b) of the constitution of the Federal Republic of Nigeria, 1999 (as amended).

“An order setting aside the entire directive and all its consequential effects in connection with the subject matter of this suit issued by the 1st and 2nd respondents to the 2nd, 3rd, 4th, 5th and 6th respondents having been made in gross violation of a valid and subsisting order of court.

“An order compelling the respondents to jointly and severally to immediately activate, debar, unlock, unblock and unrestrict the applicant’s phone lines/SIM cards and the phone lines/SIM cards of the affected Nigerian citizens forthwith.

“An order compelling the respondents to jointly and severally tender a public apology to the applicant and other affected Nigerian citizens and to pay the sum of N10 billion only as general and exemplary damages for the prejudicial, wrongful and unconstitutional action of the respondents and the inconvenience, damages and injury caused the applicant and other affected Nigerian citizens in flagrant violation of a valid and subsisting order of court.

“An order of perpetual injunction restraining the respondents jointly and severally, whether by themselves, their agents, officers, officials, members, servants, ministries, organs, agencies or privies or anybody deriving authority from them by whatever name called from barring, restricting and of deactivating the applicant’s and other affected Nigerian citizens, phones lines/ SIM cards or taking any step, action, further step or action or untoward action or proceedings against the applicant and other affected Nigerian citizens on any fact connected with or related to the facts of this case.”

The motion which is supported with 33 paragraphs affidavit, according to the lawyer, is pursuant to Sections 36 and 46 of the 1999 constitution of the Federal Republic Of Nigeria; Order II Rule 1 of the Fundamental Rights Enforcement Procedure Rules 2009 and under the court’s inherent jurisdiction imbued by Section 6 (6)(B) of constitution of the Federal Republic Of Nigeria, 1999 as amended.

He also listed the following grounds upon which the reliefs were sought: “That there has been grave constitutional infraction perpetrated by the respondents against the applicant and other law abiding Nigerian citizens.

“That on the 22nd of February 2024, the court of law granted an order restraining the respondents from barring, deactivating and or restricting any phone lines/SIM cards of the applicant and Nigerian citizens.

“That the respondents have took the law into their hands by barring, deactivating and restricting the phone lines/SIM cards property of the applicant and other Nigerian citizens upon directive by the 1st and 2nd respondents despite a valid and subsisting order of court granted against the respondents on the 28th of February 2024.

“That the applicant has a constitutional right to fair nearing and right to own property guaranteed by the constitution.

“That the actions of the respondents have overreached the order of court and thus prejudicial against the applicant’s right to fair hearing.

Hence, it is not in accordance with due process of law. “That the act and action of the respondents is clearly wrongful, illegal, unconstitutional and prejudicial against the applicant’s right to fair hearing.

“That the respondents are creations and creatures of law and thus must act within the limit of the law.

“The respondents have no right to take the law into their own hands and that the constitutional safeguards to persons alleged to have committed any offence are sacrosanct and must be jealously guarded by the court.

“That the applicant has his fundamental rights protected and guaranteed under the 1999 constitution of the Federal Republic of Nigeria (as amended).

“That the applicant has the right under Section 46 of the 1999 constitution to approach the court for redress for the breach of his rights. And that the applicant is entitled to the reliefs sought in this case.”

The lawyer in his affidavit stated that his fundamental right to fair hearing and the rights of millions of Nigerian citizens guaranteed under Sections 36 of the constitution have been and is being violated by the respondents.

“That based on the above, he has filed this suit for himself and in public interest pursuant to the Fundamental Rights (Enforcement procedure) Rules 2009.

“That he is the telephone subscriber of the respondents with phone numbers/lines (09139128873) and (08027208563), 08055382155, 08090220200, respectively. And that sometimes in January 2024, the respondents threatened in barring, deactivating and restricting the phone lines of Nigerian citizens whose phones lines are not linked with the National Identity Number (NIN).

“That he immediately challenged the action of the respondents culminating to the valid and subsisting court order granted on the 22nd of February 2024, restraining the respondents from barring, deactivating and restricting my phone lines and the phone lines of Nigerian citizens.

“That surprisingly, while daring the court, the first and second respondents threatened to go ahead with the act and action of barring, deactivating and restricting of phones despite a valid and subsisting court order restraining the respondents.

And that to his utmost shock, on the 28th of February 2024, he woke up only to discover that his phone lines have been barred, deactivated and restricted by the second to sixth respondents, based on the mere directive of the first and second respondents despite a subsisting order of court.

“That act and action of the second to sixth respondents in barring, deactivating and restricting his phone lines and that of Nigerian citizens upon a mere directive by the first respondent without any order of court and despite a valid and subsisting court order have caused me great loss of business opportunities, embarrassment, untold hardship, discomfort and inconvenience and hampered my business as a legal practitioner and businessman.

“That he immediately contacted his solicitors, who wrote letters to the respondents demanding a prompt reversal of their illegal act and action having been carried out without recourse to due process of law.

But the respondents have failed and refused to reply or respond to his solicitors letters till date.

“That the act and action of the respondents of restricting, barring, deactivating the phone lines of millions of Nigerian citizens is a clear brazen act of undermining the court of law and its judicial powers and thus prejudicial against their rights to fair hearing.

And that the act and action of barring, blocking deactivating and restricting my phone lines by the respondents despite a valid and subsisting court order is clearly wrongful and prejudicial against my rights and the rights of Nigerian citizens to fair hearing and right to own property.” However, no date has been fixed for the hearing of the suit.

 

 

 


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UK’s New Tech Entrepreneurs Funding to Boost Livelihoods in the World’s Developing Countries

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New UK funding for innovative mobile phone technology will help change lives in developing countries around the world, Development Minister Andrew Mitchell has announced.

Harnessing AI technology to provide real-time agricultural advice to farmers in Nigeria and pay-as-you-go solar powered fridges are just some of the ways UK-funded mobile technology is improving livelihoods globally.

At a speech at Mobile World Congress last week, Minister Mitchell announced the UK is providing £37.3 million of new support for the Mobile for Development Programme, to help more people access mobile and digital technologies to find new opportunities and boost their livelihoods.

The programme, which the UK funds in partnership with UK-based mobile industry association GSMA and the private sector, has already benefitted more than 94 million people and focuses on women and girls, climate change mitigation, adaptation and resilience and scaling up innovative solutions.

Minister for Development and Africa, Andrew Mitchell said: “Mobile technology has the potential to revolutionise the lives of the poor by helping tackle the effects of climate change, creating jobs and boosting opportunities for women.

“The Mobile for Development programme has already benefitted more than 100 million people, and the UK’s new announcement aims to up the ambition, reaching 110 million additional people, including 60 million women.

“Together the worlds of development and mobile tech giants can be a powerful force to unlock opportunities and prosperity, and meet the UN Global Goals.”

UK funding has previously helped scale up a digital hub in Pakistan, BaKhabar Kissan (BKK), which provides accurate weather forecasting data to farmers to help them make critical farming decisions such as the timing of seed sowing, irrigation, and fertilisation. With the help of this programme, BKK has almost doubled users from 6.6 million to 12.4 million.

Another innovative business, Ensibuuko, is providing digital skills training to help community saving groups in rural Uganda keep up with the latest digital products and services where previously they relied on paper record-keeping.

Since gaining funding, Ensibuuko has benefited over 236,000 members of rural savings groups, 60% of whom are women, providing them with digital skills training.

John Giusti, President of the GSMA Mobile for Development Foundation, said: “For more than a decade, the FCDO and the GSMA Mobile for Development Foundation have worked closely in partnership to drive socio-economic and climate impact for the most underserved populations through digital innovation, and to date our partnership has improved the lives of more than 127 million people.

“Today’s renewal of our partnership will further amplify our joint impact by leveraging the power of digital and emerging technologies to support innovation, improve access to opportunities for women, and tackle the effects of climate change for the most vulnerable.”

With the increase in climate crises around the world, the need for new solutions to help vulnerable countries adapt is growing and mobile technology can make a big difference to people’s lives.

At Mobile World Congress, GSMA also announced the grantees for its Climate Resilience and Adaptation Fund which is funded by the UK’s Foreign, Commonwealth and Development Office. This fund is designed to test and scale up new technology to combat the effects of climate change in countries throughout Africa and Asia.

Some of the projects being funded include one using AI-powered satellite imagery to help smallholder farmers increase their yields and another to reduce food waste via an online grocery platform.

 


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PIN Announces Ajegunle Legacy Project Award and Scholarship winners

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The future of four brilliant students shines brighter after they secured scholarship opportunities under Paradigm Initiative’s (PIN’s) Ajegunle Legacy Project to further their studies. The winners were unveiled following a careful screening process undertaken by the organisation over a period of four months.

They were recognised and celebrated at Paradigm Initiative’s headquarters in Lagos, Nigeria during a ceremony also attended by their loved ones, the selection team and PIN Board member, Dr Oluseyi Adebayo Olubi.

The male awardee for the Taiwo Bankole Award is Anthony Maduamaka Ihejiamatu, a Chemical Engineering student at the University of Lagos in Nigeria. In the female category is Adeniran Esther, a student of Project Management Technology at The Federal University of Technology Akure in Nigeria.

For the advanced software training scholarship (Ajegunle Legacy Scholarship), the candidates selected by the panel are Ogar Gideon Robert in the male category and Idowu Sarah Sylvester in the female category.

In April 2023, the organisation launched the Ajegunle Legacy Scholarship as a way of giving back to the community and recognising notable individuals who played an important role in PIN’s early beginning in Ajegunle. The scholarship was named after the area to support resident youth/students in securing university education.

The Project has two arms. The prize arm and the scholarship arm. The prize arm supports two young persons (one male and one female) from low-income families resident in Ajegunle to acquire university education in Science, Technology, Engineering, and Mathematics (STEM) or Law annually. The prize is named after the late Taiwo Bankole Ogunyemi, one of the foremost volunteers at PIN’s digital inclusion program (now known as the LIFE Legacy Program). This award is aimed at immortalising the late Ogunyemi’s name for his role in improving the lives of young people across Nigeria, especially in Ajegunle.

The scholarship arm on the other hand supports two young persons (one male and one female) from low-income families residing in Ajegunle to get advanced software development training annually.


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