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American regulators to investigate Genesis and other crypto firms

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Alleged securities violations and connections with retail investors are being investigated by the State of Alabama and several other states.

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AI scammers are now impersonating US government bigwigs, says FBI

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Deepfake-assisted hackers are now targeting US federal and state officials by masquerading as senior US officials in the latest brazen phishing campaign to steal sensitive data. 

The bad actors have been operating since April, using deepfake voice messages and text messages to masquerade as senior government officials and establish rapport with victims, the FBI said in a May 15 warning. 

“If you receive a message claiming to be from a senior US official, do not assume it is authentic,” the agency said.  

If US officials’ accounts are compromised, the scam could become far worse because hackers can then “target other government officials, or their associates and contacts, by using the trusted contact information they obtain,” the FBI said. 

As part of these scams, the FBI says the hackers are trying to access victims’ accounts through malicious links and directing them to hacker-controlled platforms or websites that steal sensitive data like passwords. 

Source: FBI

“Contact information acquired through social engineering schemes could also be used to impersonate contacts to elicit information or funds,” the agency added. 

Crypto founders targeted in separate deepfake attacks 

In an unrelated deepfake scam, Sandeep Narwal, co-founder of blockchain platform Polygon, raised the alarm in a May 13 X post that bad actors were also impersonating him with deepfakes. 

Nailwal said the “attack vector is horrifying” and had left him slightly shaken because several people had “called me on Telegram asking if I was on zoom call with them and am I asking them to install a script.” 

Source: Sandeep Narwal

As part of the scam, the bad actors hacked the Telegram of Polygon’s ventures lead, Shreyansh and pinged people asking to jump in a Zoom call that had a deepfake of Nailwal, Shreyansh and a third person, according to Nailwal. 

“The audio is disabled and since your voice is not working, the scammer asks you to install some SDK, if you install game over for you,” Nailwal said. 

“Other issue is, there is no way to complain this to Telegram and get their attention on this matter. I understand they can’t possibly take all these service calls but there should be a way to do it, maybe some sort of social way to call out a particular account.” 

At least one user replied in the comments saying the fraudsters had targeted them, while Web3 OG Dovey Wan said she had also been deepfaked in a similar scam. 

Source: Dovey Wan

FBI and crypto founder says vigilance is key to avoid scams 

Nailwal suggests the best way to avoid being duped by these types of scams is to never install anything during an online interaction initiated by another person and to keep a separate device specifically for accessing crypto wallets

Related: AI deepfake attacks will extend beyond videos and audio — Security firms

Meanwhile, the FBI says to verify the identity of anyone who contacts you, examine all sender addresses for mistakes or inconsistencies, and check all images and videos for distorted hands, feet or unrealistic facial features. 

At the same time, the agency recommends never sharing sensitive information with someone you have never met, clicking links from people you don’t know, and setting up two-factor or multifactor authentication. 

Magazine: Deepfake AI ‘gang’ drains $11M OKX account, Zipmex zapped by SEC: Asia Express

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Brazil fintech gets approval to become a Bitcoin treasury company

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Méliuz’s executive chairman says his fintech firm has become Brazil’s first publicly-traded Bitcoin treasury company following shareholder approval, with the firm also announcing it bought $28.4 million worth of Bitcoin to add to its existing stack.

“Historic day! Our shareholders have approved, by a wide majority, the transformation of Méliuz into the first Bitcoin Treasury Company listed in Brazil,” Israel Salmen posted to X on May 15.

Salmen said the firm snapped up 274.52 Bitcoin (BTC) for an average purchase price of $103,604, achieving a BTC yield of 600%. 

Méliuz now holds 320.3 Bitcoin, worth a little over $33 million, with the latest purchase adding to the Brazilian fintech firm’s first purchase of 45.73 Bitcoin on March 6.

Details of Méliuz’s latest Bitcoin purchase. Source: Israel Salmen

In a May 15 statement, Méliuz said it would accumulate Bitcoin in an “accretive way” for shareholders using a range of financial instruments.

“Rather than just allocating part of its cash to Bitcoin as a hedge against inflation or currency devaluation, the Company has repositioned its purpose to act by maximizing the amount of Bitcoin per share.”

According to Salmen, Méliuz is the first Bitcoin treasury company in Latin America because the planned Bitcoin investments are now part of its “business strategy.”

BitcoinTreasuries.NET data shows that e-commerce platform MercadoLibre holds more, with over 570 Bitcoin, worth $59.2 million, after its latest purchase of 157.7 Bitcoin on March 31.

Méliuz has been one of Brazil’s top-performing stocks of late

Méliuz (CASH3.SA) has been one of the best-performing stocks on the Brasil Bolsa Balcão since the firm announced its first Bitcoin purchase on March 6, increasing more than 117% since then, according to Google Finance data.

Méliuz’s market cap now sits at 727.9 Brazilian real, or more than $128 million.

Related: ‘The world is trying to hoard Bitcoin right now’ — Eric Trump

The fintech firm is well-known for its cashback program and serves over 30 million users across Brazil.

Source: Israel Salmen

Magazine: Danger signs for Bitcoin as retail abandons it to institutions: Sky Wee

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Tornado Cash dev Roman Storm trial goes ahead with slight trim

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US federal prosecutors are pressing ahead with their case against Tornado Cash founder Roman Storm, but will drop a small part of their indictment after the Department of Justice rolled back its crypto enforcement last month.

Jay Clayton, the acting US Attorney for Manhattan, told federal court judge Katherine Polk Failla in a May 15 letter that the charges against Storm still stand, bar one part of a conspiracy to operate an unlicensed money transmitting business charge.

“After review of this case, this Office and the Office of the Deputy Attorney General have determined that this prosecution is consistent with the letter and spirit of the April 7, 2025 Memorandum from the Deputy Attorney General,” Clayton wrote.

Deputy Attorney General Todd Blanche’s April memo said the Justice Department would end the so-called “regulation by prosecution” of crypto, and added that the agency wouldn’t prosecute crypto mixers like Tornado Cash “for the acts of their end users or unwitting violations of regulations.”

A highlighted excerpt of Blanche’s memo stating that the Department of Justice was rolling back its crypto enforcement. Source: US Department of Justice

Clayton added that the indictment against Storm will cut the accusation that he failed to comply with money transmitting business registration requirements.

Prosecutors were pursuing that charge as part of their allegation that Storm conspired to run Tornado Cash as an unlicensed money transmitter.

The government will still push ahead with the charge under the accusation that Storm transmitted funds while knowing they were derived from a criminal offence or were intended to support unlawful activity. 

The Justice Department alleged that Tornado Cash helped launder over $1 billion worth of crypto, including for the sanctioned North Korean state-backed hacking collective the Lazarus Group.

Clayton said the Justice Department will also still pursue the other two charges in its indictment, one count of money laundering conspiracy and one count of conspiracy to violate US sanctions.

Related: NFT founder stole millions from Bitcoin project, investors allege 

The money laundering and sanctions violations conspiracy charges each carry a maximum sentence of 20 years in prison, while the unlicensed money transmitter conspiracy charge carries a maximum sentence of five years.

Storm has pleaded not guilty, and his trial is scheduled for July 14. He was charged alongside fellow founder Roman Semenov, who is at large and believed to be in his native Russia.

Blanche memo cited in bids to toss

Other crypto executives facing charges have pointed to Blanche’s memo in a bid to have their cases dismissed.

Crypto mixer Samourai Wallet co-founders Keonne Rodriguez and William Hill had pointed to the memo to try to dismiss their charges of conspiracy to operate an unlicensed money transmitter and money laundering conspiracy.

Braden John Karony, the CEO of crypto firm SafeMoon, has also cited the memo in an attempt to have the charges of securities fraud, wire fraud and money laundering conspiracy against him dismissed.

Legal Panel: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set 

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