From public videos, attackers have created a deepfake of a hologram of a manager of the world’s largest crypto exchange. Her booty: $32 million.
An always smartly dressed “hologram” in the zoom call instead of the real bleary-eyed visage. That must be good for business! As it turns out, it depends on the business. Apparently Patrick Hillmann, spokesman for the world’s largest crypto exchange Binance, liked to be represented by a “hologram” generated with artificial intelligence in zoom calls. Attackers took advantage of this, using a deepfake avatar to trap Hillman’s third parties and deprive them of millions.
According to the current state of knowledge, this is how it happened: The Brazilian crypto currency company BlueBenx, specializing in the brokerage of crypto loans with allegedly dizzying returns, wanted to list its own crypto currency Benx with Binance. Such a listing does not happen overnight, and time is money.
Yes, hello, there are helpful people who want to help speed up the listing. BlueBenx was happy to get help at the beginning of August, in the interest of the customers, of course. The middlemen set up a zoom call with none other than Binance spokesman Hillmann, who, not uncommonly, appeared on the screen as an artificially generated avatar.
Classic prepayment scam
To ensure that everything goes right, “Hillmann’s hologram” demanded the transfer of 200,000 US dollars and 25 million Benx. Money and Benx were soon transferred and back within minutes: because the supposed intermediary exchanged them on BlueBenx’s own platform for the stablecoin USDT until all deposits from BlueBenx investors, including the USDT reserve pool, were empty. Benx now has the self-created tokens back, but USDT worth $32 million less.
The problem: If the liquidity pool is empty, those who had invested in BlueBenx cannot access their book values. Payments have been on hold since the beginning of August, affecting more than 25,000 speculators. You won’t get anything any time soon.
“Hologram” invites to deepfake
Initially, BlueBenx said it was hacked and is working to start paying out next year. But then Hillmann went public with his version of the story: “Over the past month I have received several online messages thanking me for meeting about (…) possible listings on Binance.com,” he writes in the official Binance blog, “This was odd because I have no influence or insight into Binance listings, and hadn’t met with any of these people.”
“As it turns out, an advanced hacking team (sic) used interviews and TV appearances from years past to create a deepfake of me,” Hillmann continues, “Apart from the striking lack of any pounds I gained during COVID was the deepfake sophisticated enough to mislead several highly intelligent members of the crypto community.” At the same time, there are more and more scammers posing as Binance employees or managers on Twitter, Linkedin, Telegram and other platforms. The perpetrators apparently tried repeatedly, at least with BlueBenx they were successful. Hillmann advises all crypto speculators to be cautious, but shows no remorse for his hologram.
BlueBenx retracts hacking story
Following its release, BlueBenx changed the original depiction of a hack and now speaks of an identity impersonation scam. The company astounds with the statement that the prepayment used for fraud is “common security practice for validation”.
According to the announcement, eleven BlueBenx employees are now working around the clock to prepare payments to BlueBenx creditors for 2023. All other employees have been dismissed and the company headquarters have been closed. Any goodwill would be turned into crypto tokens, including software licenses and office furniture. In fact, only 2,500 of the more than 25,000 BlueBenx customers, according to their own statements, were damaged by the theft. The company is just as guilty of details as a reason for the sudden deletion of its own Instagram account.
Long administrative proceedings against BlueBenx
BlueBenx has had legal difficulties since August 2019: since then, the Brazilian capital market authority CVM has been conducting administrative criminal proceedings against the company. BlueBenx is said to have publicly offered “investments in Bitcoin” without having the required registration with the CVM. The advertisement is said to have promised a return of up to 66 percent.
In February 2020, BlueBenx promised the authority that it would cease operations. But in 2021, the authorities found BlueBenx still at work. This time the company said it was operating in accordance with all regulations. When that failed to convince the authorities, BlueBenx and its managers Roberto and Jesus Cardassi offered a settlement in early 2022: termination of the proceedings against a payment of 150 million Brazilian real, at the time the equivalent of almost 24 million euros.
The capital market supervisory authority has rejected this offer because BlueBenx has still not established a legally compliant condition. So the administrative criminal proceedings with the Az. PAS CVM SEI 19957.001908 /2021-01 cannot be discontinued. This does not help those who have been injured during the ongoing proceedings.
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