Gilit Saporta, Head of Fraud Intelligence at Simplex, addresses “work from home scams” and Covid-19’s influence on the growing number of phishing and social engineering scams

Covid-19 and social engineering – a match made in hell

Tuesday 31 March 2020 10:00 CET | Author Mirela Ciobanu | Voice of the industry

Gilit Saporta, Head of Fraud Intelligence at Simplex, addresses ‘work from home scams’ and how Covid-19 could (and is) potentially increase the number of phishing and social engineering attacks

‘…He said that working from home was really easy, and that I could make more money than what I used to get when I was taking care of older folks. I knew he was a serious employer because he asked for references, and also for my bank account details and my SSN… you hear about people who fall for scams all the time, but I never thought it could happen to me…’

When Maya (names have been changed to protect the privacy of fraud victims) tells her story, it’s important for her to clarify that she was only looking for a chance to make an honest living. For several months, while she was in between jobs, she honestly believed that she was working as a broker for a cryptocurrency investment company. She provided her true personal details, including a photo of her driver’s license, in order to place dozens of Bitcoin purchases. She paid for the Bitcoin with credit cards numbers that were sent to her on weekly spreadsheets (representing the customers of the company, she thought). She forwarded the purchased Bitcoin to the wallet of her employer. She used her own credit card to invest a few thousands of dollars herself, as well.

When Maya asked to withdrawal her earnings herself, she got no reply. Only then, slowly, she began to realise that she had been a victim – and an accomplice – of fraud. She filed chargebacks for the payments made on her credit card, but she neglected to mention the numerous payments she had made using other people’s credit cards. Only later, when contacted by her issuing bank, she openly recounted the events. It was important to her to emphasise that she was a law-abiding citizen.

Home dwellers are natural prey for scammers

As a leader in the field of FIAT to Crypto payment processor, and a licensed Electronic Money Institution, Simplex daily witnesses – and prevents – thousands of social engineering attempts. Simplex’s fraud prevention (powered by machine learning boosted models) detects countless new victims regularly, with the average attacker attempting to steal over USD 7000 per victim (first attacks often aim for roughly USD 2000). Most social engineering attacks viciously target 2 populations: the retired, and the unemployed.

It’s natural for offenders to prefer the elderlies. First and foremost, many senior citizens are not tech-savvy nor internet/crypto-savvy, so they fail to spot signs for scam. E.g., a pair of Canadian scammers convinced their victim that they were customer-care representatives, simply by creating a Twitter account with the handle of @HitBTCAssist. The scammers were successful enough to book a trip to Las Vegas and hit the casinos, before being arrested at the airport.

The second reason for scammers to ‘favour’ elderlies and non-working victims in general is that they are usually free (and often eager) to make long, friendly, phone calls or email/chat correspondences. This is where social engineering artists find their opportunity to shine. As social beings, we are naturally programmed to seek interaction and affirmation from others. Older generations might also consider it their duty to politely listen fully to what their counterparty has to say. Sadly, this plays right into the hands of social engineering masters.

… and then came Covid-19

Why do scammers love it when we’re all stuck at home? They have all the reasons in the world. Millions of teachers, students, caregivers, etc. now spend the better part of their day with their screens to keep them company (both for work/school and for pastime). Most of them are not adequately aware of internet-safety. Many of them are already flooded with emails and direct messages, as they are adjusting to work-from-home mode. It won’t be too difficult for a scammer to find schoolteachers who would install remote control malware, or share student private info, while thinking that they’re installing Zoom.

Moreover, Covid-19 leaves many of us home alone with uncertainty about our financial future. It’s still difficult to estimate how many jobs will be lost during this crisis, but one thing’s for sure – phishing and work from home schemes are already here. In quarantined Israel, for example, phishing schemes which promise free food coupons at a large grocery stores chain are currently flourishing and the rate of new work from home posts on local social media groups has tripled within a month.

Whether we’re already experiencing financial difficulties or if we’re only anxiously looking towards the future, we are all clearly feeling like a fish out of water these days. We may feel bewildered at the fast-evolving reality, swamped with fake news and easily distracted (parents are practicing a whole new level of multi-tasking these days). Honestly, many of us are probably exhibiting the behaviour of senior citizens these days.

Cryptocurrency scammers use work from home workers to launder stolen funds

So, the bad news is that humanity is extra sensitive to social engineering during this crisis. The good news is that several of the high-risk industries of ecommerce and fintech have accumulated years of experience in battling these scams. In cryptocurrency, which was long perceived as the holy grail for fraudsters, EU regulators, together with large exchanges, payment processors and financial partners, were pushing for safety measures long before Covid-19 took over. Nimrod Lehavi, CEO for Simplex, writing for FinanceMagnates, describes how regulators perceive the threat of social engineering on cryptocurrency ecosystem: 

‘For exchanges, who are able to deal in fiat, the necessity of abiding by transparency regulations and rules becomes a significant chore. For such exchanges, proper processes of Know Your Customer (KYC) and Anti Money Laundering (AML) are a lifeline to legitimacy that must not be broken…’

Because of unfortunate data breaches of the last decade, attackers currently have access to so much compromised personal data, that they easily undertake massive attacks … Regulators of 2020 are painfully aware of the massive data breaches of the former decade. The large early breaches, such as the 3 billion 2013 breach at Yahoo, were not necessarily the worst ones … The most severe breaches of the second part of the decade were those which were almost immediately tied with increased fraud and money laundering rates around the world: 143 million records data breached at Equifax in 2017, then in 2018 and early 2019 a series of significant data breaches in Marriot, CIBC, First American Financial Corp and Facebook, affecting over 1 Billion records in total…

Armed with rich stolen personal data, fraudsters perfected a common trick called Smurfing: instead of the same person creating multiple accounts, they use a single broker, with money laundering completed by using it to make multiple transactions to unsuspecting individuals who don’t know they’ve helped the fraudster diversify. When ‘smurfs’ and money-mules are recruited to the aid of the fraudster, detecting illegitimate activity becomes even trickier, because the innocent ‘smurfs’ do not exhibit malicious indicators. North America and EMEA are equally prone to the risk of social engineering, with dozens of fake websites going live on a daily basis to lure in unsuspecting ‘smurfs’.

Stay safe – health-wise, fintech-wise, cyber-wise

It’s clear that cryptocurrency related services, who have already honed their fraud (and money laundering) prevention capabilities, are quite aware and well equipped to fight for our safety during this crisis. The example of Simplex, as a payment processor offering multiple flows, shows that the more sensitive payment options requires stronger defences. E.g. there are traditional mechanisms to protect users from the classic fraudster who attacks Simplex’s buy-crypto-with-credit-card flow, and then there are the mechanisms to protect Simplex’s Account onboarding flow, which allows both SEPA transfers and sell-crypto transactions. The latter option, being a stronger financial tool, has a strong appeal to social engineering attackers, which means top-notch identity protection on Simplex’s side.

Still, even with the best protections from payment processors and merchants, the safety of the internet can really be revolutionised through raising user awareness. Perhaps one last silver lining is that the younger generation, who currently can’t go to school, might get a valuable lesson on internet safety. Better yet, if you have a millennial in your area, this might be a good time to ask them to give a call to their grandparent, ask how they’re doing and have a talk about phishing awareness. Stay safe!

About Gilit Saporta

Gilit Saporta, Head of Fraud Intelligence at Simplex, has been  combating fraud since 2005, mentoring and leading teams for FraudSciences, PayPal and Forter. As member of RiskSalon.org leadership, co-host of FraudFightersIL meetups and member of TLV Cyber Week FraudCon steering committee, Gilit’s passion is knowledge sharing across risk organizations worldwide.

About Simplex

Simplex.com is an EU licensed fintech company that provides worldwide fraud-free payment processing and accounts services in the FIAT to Cryptocurrency ecosystem. With a proven track record in high fraud markets, Simplex’s technology enables crypto platforms to process online payments with complete fraud protection, smooth user experience and chargeback coverage.

Simplex, an Israel-based company that provides fiat onramp services to crypto firms, has become a principal member of Visa in Europe.

The membership allows Simplex to issue Visa debit cards to its customers that include popular crypto exchanges and wallets. Simplex is a business-to-business (B2B) firm, meaning it caters to other companies.

Simplex CEO Nimrod Lehavi told The Block that the firm worked with Visa for a few months, and the principal membership will help it grow the adoption of crypto further. “Our partners can enable their users to make purchases anywhere Visa is accepted,” said Lehavi.

The membership comes less than a month after Simplex launched its new banking service, enabling crypto firms to offer local and global payment methods to their users. Lehavi said offering Visa cards was a “clear next step to help our partners grow enablement to their users.”

Last week, crypto card issuer Wirex also received principal membership of Visa in Europe. Lehavi said the key difference between the two is that Simplex’s membership is focused on “wider ecosystem enablement, i.e., granting accessibility throughout our partner network — enabling them to offer branded cards to their users.”

One of the consistent challenges faced by crypto exchanges, wallets and platforms is the efficient conversion of crypto assets to fiat currency for their users. We are excited to roll out our new crypto off-ramp solution that allows users to easily sell cryptocurrency directly to their Visa cards. The solution is now available in the European Economic Area (EEA) and supports instant transactions in EUR for Bitcoin (BTC) and USDT (TRC20).

Simple, fast and secure user flow

For users, the process couldn’t be simpler:

• Select: Users choose the amount of BTC or USDT they wish to sell
• Verify: First-time users complete a one-time Know-Your-Customer (KYC) verification to ensure transaction security and compliance with industry standards
• Confirm: With just a few clicks, users initiate and confirm the sell order
• Convert: The crypto is converted to EUR, reflecting the real-time market rates
• Complete: The EUR funds are then swiftly transferred to the user’s Visa card

Confronting industry challenges

The transition from crypto to fiat has traditionally been fraught with more hurdles than fiat-to-crypto on-ramps, including long transaction times, high fees, regulatory complexities, and limited accessibility. Our off-ramp solution is designed to tackle these issues head-on, offering:

• Speed: Quick processing times from sale to fund availability on the user’s card
• Simplicity: An intuitive interface that makes selling crypto as straightforward as any traditional online transaction
• Security: Compliance with regulatory standards, ensuring a secure and trustworthy service 
• Accessibility: Support for all countries within the EEA, with more coming soon
• Easy integration: Zero-integration option accelerates implementation for partners with no extra development work

Bringing more value to our partners and users

For our partners, integrating off-ramps to cards into their platforms is an opportunity to enhance their offering, attract a wider user base, and generate additional revenue streams. Enabling users to seamlessly sell crypto directly to their card is more than adding a feature, it’s strategically positioning your platform at the forefront of user-centric finance.
Here’s why:

• Expanding payout options: Offering payouts directly to cards compliments off-ramps via bank transfers and caters to the growing user demand for immediate and convenient access to their funds, crucial for users who prioritize flexibility and speed in financial transactions.
• Attracting and retaining users: A platform that simplifies the crypto-to-fiat conversion process is a magnet for users looking for hassle-free transactions, offering them the confidence and peace of mind to trade, invest, and engage with crypto knowing they have an efficient exit strategy to traditional currency.

Getting started with Simplex

Looking to boost your platform’s functionality with advanced payment solutions? Simplex is ready to help. Contact us to learn how our seamless on-ramp and off-ramp integrations can upgrade your service offerings.

Already a partner? To add our new off-ramp solution to your platform, simply reach out to your Customer Success Manager to get started.

Users of the Opera web browser will now be able to purchase cryptocurrencies directly within the application following a partnership with Simplex. Founded in 2014, Simplex is a European Union-licensed fintech company that provides access to over 50 cryptocurrencies and is a principal member of the Visa network.

The Opera browser was one of the first to integrate cryptocurrency use into its core functions, supplying in-built wallets for Bitcoin (BTC), Ether (ETH) and Tron’s Tronix (TRX). Now, users will be able to move from fiat to crypto with the same ease.

Simplex’s technological infrastructure is used by numerous well-known cryptocurrency exchanges, such as Binance, Kucoin, OKEx and others. The firm has partnered with over 350 crypto institutions since its launch, supplying access to cryptocurrencies via debit and credit card purchases.

The Opera browser’s focus on privacy sees it come with a free built-in VPN, and in 2020, it became the first browser to allow access to the decentralized web “.crypto” URLs, in combination with Unstoppable Domains.

A Simplex representative told Cointelegraph the integration was in response to user demand, and that in-browser Know Your Customer checks can be completed in minutes. 

Opera is currently the fifth-most-used browser in the world, taking up around 2.5% of the market share, behind Chrome, Safari, Firefox and Microsoft Edge.