The Cyberchain Event 2021

The Cyberchain Event 2021

The Cyberchain Event 2021 which hosted experts in the Blockchain and Cybersecurity space, had our senior partner, Mr Adedeji Owonibi speak on the topic: “The Need for Forensics Experts in a Digital Economy”.

In his speech, he spoke about the different opportunities that the blockchain technology has to offer especially to youths which includes: coding, blockchain gaming, and becoming crypto forensics investigators . He mentioned that the space is still very new and everyone is still learning including the governments around the world and law enforcement agencies.

A&D Senior Partner, Mr. Adedeji Owonibi

He reiterated on the fact that the criminal elements gave the popularity to Bitcoin, hence the need for the ecosystem to be regulated so as to prevent crypto currency related crimes. Going further, he mentioned that anyone could be a victim of these crimes as a result of becoming our own banks, and called on all crypto currency users to take responsibilities and ensure security of our assets.

Conversely, in becoming our own banks, there have been reported cases of cryptocurrency related crimes and the appalling situations victims experience simply because we neither know what to do nor where to report. In addition, the law enforcement agencies and various cooperate bodies involved in crime prevention are yet to understand the technology behind cryptocurrency which makes it pseudonymous, the blockchain technology.

As a result, there is a need for intensive education and trainings for individuals, cooperate bodies, government agencies and law enforcement agencies so as to enable us to be proactive. To make this education easier, A&D Forensics has partnered with Blockchain Intelligence Group (BIG) to bring this training home.

A&D Forensics team at the booth.

While concluding his speech, Mr Adedeji Owonibi expressed that the rate and amount of needed cryptocurrency investigations by law enforcement is becoming alarming, and called on to the bad actors who think that they could easily leverage on cryptocurrencies to note that the transparency in Blockchain will give them out swiftly, whether they use Dexes, swap NFTs or use unhosted wallets, because all are now visible with a click on Crypto Forensic Tools.

He further advised crypto traders to trade clean so that help can be rendered from the industry at needed times.

A&D Snr. Partner with country lead, Okex Nigeria

The Cyberchain 2021 Event also had some lead persons from different exchanges like: Binance, Okex, FTX, Hagglex, Tradefada, Bitmama and community representatives from SIBAN, BNUG, Redswan, UNIC, TPG Hub, Bholdus, CloudFlex etc in attendance.

In another news, the highlights of the Cyberchain Event included a Cybersecurity Hackathon dubbed Cyberthon . Among the finalists were students from Federal University of Technology Minna, Federal University of Technology Akure and others.

A&D Forensics team with the Hackathon winners.

A&D Forensics also encouraged the first place winners by offering to sponsor their training on the Certified Cryptocurrency Investigation Course.

The Certified Cryptocurrency Investigation Course (CCI) and the Certified Cryptocurrency Compliance Specialist(3CS) training equips practitioners with the comprehension and competence to trace and investigate transactions on the Blockchain using various cryptocurrency investigation tools provided on-site at A&D Forensics lab.

To advance your career with this training, register to choose your preferred cohort with the link: https://adforensics.com.ng/cryptocurrency-training/

AVOID BECOMING A CRYPTO SCAM VICTIM

AVOID BECOMING A CRYPTO SCAM VICTIM

UNDERSTAND THE CONCEPT OF  ‘REPLACE -BY -FEES – RBF

As Bitcoin is getting adoption across the world, it is becoming increasingly popular to find some transactions overstaying on the temporary blockchain part, warehousing unconfirmed transactions thereby making such transaction orders which could be payments for goods or services unconfirmed on the Blockchain. When such happens, payers funds are trapped because you cannot initiate another transaction to re-pay the recipient waiting on the other side with the same unconfirmed coins.

 If you find yourself in this embarrasing situation where your transactions remain unconfirmed for unacceptably long time, what would be your next action? You could probably use the Replace-By-Fees method to have your way!  Interesting right? This functionality can also be hijacked by criminal elements to commit fraud and this is the crux of this article.

 

Replace- By- Fees (RBF)

This is a  process of paying a higher transaction fee to replace previously sent, but yet to be confirmed blockchain transaction.

Types of RBF:

1).  Full RBF: In this case, the old transaction is completely replaced with a new one as far as the transaction fee is complete.

2).  Opt -in RBF: Here, the sender chooses whether to use RBF or not. Some wallets come with this feature.

3).  First-Seen-Safe RBF: Here, the sender is only permitted to start a new transaction if the new transaction is the same as the old one.

4).  Delayed RBF: The old transaction will only be changed if it hasn’t been added in a block. The sender would patiently allow  the transaction to be added with a lower fee hence saving his/her money.

 

Why Could These Transactions Be Delayed?

Initiating a transaction on the Blockchain, will get it  stored in the  Mempool first, before the miners attend to them. Miners however, attend to  transactions with higher fees attached, to  enable them maximize profit and also get compensated for the resources they spent while mining.

 

Explaining How RBF Works

Assuming you initiated a transaction on the blockchain at a particular price and  unfortunately, the transaction was delayed without the recipient receiving confirmations.

 To salvage this situation, you simply initiate a new transaction exactly same as the old one, and pay a  higher fee.

Miners will get both the old  and new transaction fees, thereby making your  transaction  more competitive for the miners to attend to.

Some wallets that allow customers to easily  use RBF options include: Bitpay,  Electrum,  Blockstream Green wallets, e.t.c.

 

How Then Can Scammers Exploit Their Victims With This Feature?

Mr Y is a fraudster who  placed an order with your online shop. He made payment  with Bitcoin while enabling  RBF on his wallet and at a reduced  transaction cost. He let’s  you know that  the transaction has been initiated and about to be confirmed on the Blockchain, probably, the confirmations aren’t complete yet and still pending.

As a result, you deliver the item hoping to get a fully confirmed transaction afterwards. Mr. Y could have  used Full RBF or Opt-in-RBF, which will allow him  to  transfer the same amount to his own account using the same UTXO input thereby leading to double-spending. At the end, Mr. Y didn’t pay you, still has your goods which you had earlier delivered and will possibly spend the money somewhere else. Hence, the reason RBF has been heavily chastised.

 

RBF Can Be Used To Prevent Malicious Activities

Have you wondered why it’s necessary to pay both the old and new  transaction fees while using the RBF feature instead of just making payment for the new transaction? It’s a strategy to ensure that it costs something more to cancel an old transaction  thereby preventing Denial-of-Service (DoS) attacks on the Bitcoin network. 

Interestingly,  prior to the RBF feature, an attacker could be able to  create an unlimited number of transactions to cancel previous one in a situation  called the ‘Denial-of Service’ (DoS) attack because he would only pay for the transaction that got confirmed.

DoS attack happens when a hostile cyber threat actor prevents legitimate users from accessing information systems, devices, or other network resources. Hence, with additional costs,these  attacks are extremely costly and less likely to occur.

RBF enabled wallets have  been criticized by persons  who claim that it’s an easy  way to allow double spending of crypto currencies. However,  to actually double spend with crypto currencies, you don’t need a wallet with RBF features.   You could just  input  the same data in all the  various transactions you  wish to create and assign the greatest transaction fee to the transaction returning to your  wallet.

 

How Can I Avoid Being A Victim of Fraud?

To avoid being a victim of fraud through this means:

  • Wait at least for six confirmations before considering a transaction genuine.
  • Ensure the transactions get confirmed on the blockchain afterwards.
  • Avoid transactions tagged with RBF.
  • As a corporate body receiving payments with bitcoins, it’s advised to leverage on wallets with RBF features, this will also enable you to detect transactions that are being initiated with RBF features by your customers. For instance, An RBF unconfirmed transaction will appear in a pinkish tone on BitPay app.

Finally, As a Cryptocurrency user, always confirm your transactions before rendering services. Do not assume that a pending transaction is a confirmed transaction!

For guide on how to avoid being a victim of frauds like this, kindly contact us with contactus@adforensics.ng or follow our social media platforms for further guides.

Anti-Money Laundering Services

Anti-Money Laundering Services

We help you Detect, Prevent and Comply with the Laws

 

A&D’s multi-disciplinary team of AML professionals take a holistic, risk-based approach to help organizations design, implement, and enhance all aspects of their AML program. Our practitioners provide a 360° compliance view by bringing a team of highly experienced professionals, including Certified Anti-Money Laundering Specialists, Certified Fraud Examiners, Certified Financial Crime Specialists, Chartered Accountants, former law enforcement agents, and technology specialists. Our team develops and enhances AML Compliance Programs in accordance with appropriate regulatory requirements as well as remediates existing programs that are subject to regulatory enforcement. 

Anti-Money Laundering (AML) continues to be a top priority for banks and non-bank financial institutions of all sizes. Steering clear of enforcement actions through sound risk management principles and practices while balancing internal cost control initiatives has become more challenging than ever.

Compounding these obstacles is the speed and complexity by which money laundering and terrorist financing activities are being carried out. As institutions continue to expand the ways in which they interact with their customers, so, too, do they create new mechanisms by which illegal activity may be carried out.

A&D will be happy to assist your organization implement a strong and robust Anti-Money Laundering procedures within your business. Compliance with AML policies and procedures is a major focus area for both local and global regulatory authorities. Firms are requested by the different regulatory agencies to set up and operate a proper system, i.e

  • Identification of its customers
  • Reporting suspicious transactions
  • Training staff pm AML processes, procedures, and proper record keeping
  • Maintain continuous monitoring of daily transactions

former examiners and compliance officers together with enterprise risk management and consultative perspectives.

Our Anti-Money Laundering service offerings include:

Enforcement Remediation

  • Independent Compliance Monitorships
  • Independent BSA/AML and OFAC Compliance Reviews
  • BSA/AML and OFAC Compliance Program Development
  • Independent Transactional Reviews (Look backs)
  • Tactical Remediation Project Plans

Program Assessment

  • Define Program Scope
  • Gather Relevant Data
  • Document Observations and Recommendations
  • Assign Assessment Rating
  • Prioritize Action Items
  • Initiate Plan

Risk Assessment

  • BSA/AML Risk Assessment 
  • OFAC Risk Assessment 
  • Risk Scoring Methodology Development 

Customer Profile

  • Risk Assessment/Customer Risk Model Alignment 
  • Customer Risk Model and High-Risk Customer Methodology Development
  • Know Your Customer (KYC)/Customer Identification Program (CIP)/Customer Due Diligence (CDD) 
  • Enhanced Due Diligence (EDD) Program Development 
  • Correspondent Banking Due Diligence Compliance
  • EDD Look Backs

Model Validation

  • Evaluate Development and Implementation
  • Ongoing Monitoring
  • Outcome Analysis

Model Risk Management and Governance

  • Policies and Procedures
  • Roles and Responsibilities
  • Model Documentation

Activity Monitoring

  • Transaction Scenario Gap Analysis
  • Transaction Scenario Calibration

Alert Management

  • Nigeria Financial Intelligent Unit (NFIU) Development
  • Look Backs and Alert Reviews

Data Analytics

  • BSA/AML and OFAC Development 
  • Customer Data Quality Reviews

Program Reporting

  • Management Dashboard Development Governance 
  • FinCEN/OFAC Reporting 
  • BSA/AML and OFAC Staffing Assessment

Knowledge Management

  • Policy and Procedure Development

Control Environment

  • QA/QC Program Development 
  • Self-Assessment Program Development

The Comprehensive Choice in Compliance

We are the comprehensive choice for both envisioning and implementing your AML solutions. Our tested methods have been used by companies both large and small who were looking to manage their AML needs from beginning to end. 

At A&D, we create a partnership with the people we work with. To learn more about how we can be your partner in staying compliant with anti-money laundering legislation and regulations, contact us now.