North Korean Cybercrime, Crypto-Hacking and Money Laundering

Case Study and Insights from Law Enforcement

Friday, 8/7, 10:00 – 11:30 AM ET

Session 12

A Step Ahead of Financial Crime and the Competition

This is the best training out there right now. You guys are making an

effort to keep it that way.

Senior Director Compliance;Financial Services

“”

ACFCS membership equips individuals and organizations with first-class practical tools, information and education that improve results in financial crime detection and prevention.

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4

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Scavenger Hunt – Let’s Go on a Goose Chase

Exhibit Booths – Take a Virtual Walk

5

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Boring but Important Things – Event Logistics

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throughout

Boring but Important Things – Troubleshooting

9

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For customer support: • eventsupport@acfcs.org• 786-591-1346

Meet the Experts

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Zia Faruqui

Assistant U.S. Attorney

U.S. Attorney’s Office for the District of Columbia

Meet the Experts

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Chris Janczewski

Special Agent, Cyber Crimes Unit

IRS-CI

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Where have Zia and Chris not been to:

A. Seychelles

B. West Bank, Palestinian Territory

C. North Korea

D. Vatican

Poll Question

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Who are we and why are we here?

Zia Faruqui

Assistant United States Attorney

Threat Finance Unit

zia.faruqui@usdoj.gov

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Chris Janczewski

Special Agent

IRS-CI’s Cyber Crimes Unit

christopher.janczewski@ci.irs.gov

Washington, D.C. USAO

Threat Finance Unit

Notable cases:

North Korean Sanctions

Tanker seizures

Antiquities

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IRS – Criminal Investigation

D.C. Cyber Crimes Unit

Notable cases:

Welcome to Video

Dark Scandals

AlphaBay

Helix

Twitter hack

BTC-e

Two federal agents that stole from Silk Road

Buyersclub

Eastern Metals Securities

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Is it a good idea to let your colleagues edit a Power Point Presentation without your review?

A. Yes

B. No

Poll Question

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sIRS – Criminal Investigation

D.C. Cyber Crimes Unit

Notable cases:

Welcome to Video

Chris is FAMOUS.

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IRS – Criminal Investigation

D.C. Cyber Crimes Unit

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Do you know what Bitcoin is?

A. Yes

B. No

Poll Question

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•Bitcoin is, at its essence, a

computer program.

•The program is open-

source, meaning that the

code is available for anyone

to review.

• Any user anywhere in the

world can access the Bitcoin

“protocol.”

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Ways to Obtain Bitcoin

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Sell Goods/Services for Bitcoins

Accept bitcoins as payment for goods or services through

the normal course of business.

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Business

Mine Bitcoins

As noted earlier, miners are rewarded for solving the

complex equations that verify transactions. When a miner

successfully confirms transactions, he or she is rewarded

with bitcoins.

3Mining

Use Bitcoin Exchanges

Exchanges allow users to convert fiat currencies to

bitcoins. Some examples include: Coinbase, Bitstamp,

and itBit. LocalBitcoins provides users with the ability to

exchange currencies in person.

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Exchange $

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Do you now or have you ever owned Bitcoin?

A. Yes

B. No

C. No comment. I don’t want to be the subject of your next PowerPoint.

Poll Question

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Bitcoin Blockchain

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RECIPIENT

(Public Key

ONLY)

SENDER

(Private and

Public Keys)

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Ways to Store your Bitcoin

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Paper Wallets

QR Codes There’s an app for that…

Hardware Wallets

Transaction Hash

Signatur

e

Wallet

Input Bitcoin address Input Private

Key

Bitcoin Amount

Date/Timestamp

Output Bitcoin address

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Peel Chain

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What is your favorite cryptocurrency:

A. Coinye

B. Potcoin

C. [Venezuelan] Petro

D. Loonie

Poll Question

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IRS C

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If a potential customer with high net worth is concerned about your bank’s security and sends you a questionnaire, how should you respond?

A. Fil l it out truthfully.

B. Fil l it out, but avoid discussing problem areas.

C. Don’t respond and lose the client.

Poll Question

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IRS C

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IRS C

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Exchanges

Did they collect KYC?

U.S. v. Harmon defined

BTC as money and

applied BSA. 19-cr-395.

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Victim Collection

Low cost

Free email

VOIP for audio

Mass emailer

Translation

Email footer

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Phishing campaign

Celas LLC

Developer

Prospective Client

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IRS C

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November 2017

17% of total assets

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Exchange 3

November 27, 2019

342,000 ETH

($48.5 mil)

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DOJ and Treasury Take Concurrent Action

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Conclusion and Questions

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Questions?

THANK YOU!

Last session!Open Secrets

12:00 PM ET