This week marked another significant round-up of incidents in the cryptocurrency sector, as reported by ISMG. Within the realm of cybersecurity incidents, several notable events unfolded, including the conviction of a cybersecurity consultant for a massive $54 million exploit, a federal court ruling that imposed a $30 million penalty in the Fundsz fraud case, and the halting of services by Near Intents after a shocking $3.8 million hack.

Cybersecurity Consultant Convicted in $54M Crypto Hack

In a pivotal case, a Maryland cybersecurity consultant, Jonathan Spalletta, faced conviction by a U.S. federal jury on multiple charges, including computer fraud and money laundering. Spalletta was found guilty of stealing over $54 million from the cryptocurrency exchange Uranium Finance during two separate attacks in April 2021. Utilizing vulnerabilities in the exchange’s smart contracts—which are programs designed to autonomously execute cryptocurrency transactions—Spalletta inappropriately withdrew funds he was not entitled to, securing approximately $1.4 million in the first attack and an astounding $53.3 million in the second, ultimately leading to the exchange’s closure.

To obscure the stolen funds, Spalletta engaged in a series of cryptocurrency transactions, funneling the proceeds through Tornado Cash, a platform built to mask transaction paths. Interestingly, his spending habits post-theft included investments in collectibles such as rare Pokémon and Magic: The Gathering cards, antique Roman coins, and even a piece of the Wright brothers’ airplane. Authorities later seized $31 million in cryptocurrency from him in February 2025. Prosecutors indicated that Spalletta could face maximum sentences of 10 years for the computer fraud conviction and 20 years for money laundering.

US Court Orders $30M Penalty in Fundsz Fraud Case

In similar news, a federal court in Florida imposed penalties exceeding $30 million on two defendants for their involvement in a fraudulent investment scheme that engaged with digital assets and precious metals. Brian Early and Alisha Ann Kingrey, who served in significant capacities for the investment group Fundsz, misled investors regarding the potential profitability of their investments and the risks involved while purportedly possessing an algorithm capable of generating substantial returns. Following the announcement of the Commodity Futures Trading Commission (CFTC) investigation, both defendants sought to retract earlier profit claims and eliminate Fundsz’s social media presence to mitigate fallout.

Settlements were also approved for two additional defendants, Rene Larralde and Juan Pablo Valcarce. Tragically, Larralde passed away in 2023, whereas Valcarce received a lifetime ban from participating in trades of digital assets or precious metals under any circumstances.

Near Intents Halts Services After $3.8M Exploit

A significant breach occurred at Near Intents, a platform allowing users to exchange cryptocurrencies across various blockchain networks. The company temporarily suspended operations after a security flaw led to an astonishing loss of approximately $3.8 million. The firm attributed this incident to an issue within its deposit and withdrawal framework, alongside a smart contract vulnerability. Notably, Near Intents vowed to rectify the weakness, ensuring to reimburse affected users fully. The organization is collaborating with law enforcement and blockchain investigators to trace the stolen assets while also preparing to release a comprehensive report detailing the incident.

Abstract Blockchain to Shut Down in December

In a concerning development for blockchain enthusiasts, Abstract Blockchain announced its plans to cease operations on December 15 due to ongoing struggles with sluggish growth, limited trading activity, and insufficient institutional interest. Despite attracting over 400,000 users and hosting a variety of more than 144 applications bolstered by partnerships with major brands like Disney and Red Bull Racing, the network declared that its consumer-oriented business model had become financially unfeasible.

Users are now urged to transfer their assets to alternative networks ahead of the shutdown to avoid losing access to their funds. Luca Netz, CEO of Igloo Inc., which funded Abstract for a substantial period, lamented the financial losses faced in sustaining the project. As a response to these challenges, Igloo will now reprioritize its efforts towards the Pudgy Penguins project instead.

Velocity Opens Claims for Victims of $295M Hack

Velocity, a decentralized cryptocurrency exchange previously known as Drift, has initiated a claim process for customers impacted by an April cyberattack that saw about $295 million lost. Users can claim one DFX recovery token for every dollar lost, with the option to exchange these for USDT, sell them, or hold until additional recovery funds are made available. However, current payouts are limited, with users receiving merely a cent for every dollar they lost. Investors have been reminded that the recovery pool stands at approximately $3.11 million, with future funding expected from platform revenues and commitments by Tether and other strategic partners.

US Treasury Withdraws 2 Cryptocurrency Surveillance Proposals

Underlining the ongoing debate regarding financial privacy, the U.S. Department of the Treasury announced the withdrawal of two proposed regulations aimed at enhancing cryptocurrency surveillance. The Financial Crimes Enforcement Network (FinCEN) abandoned a proposal requiring financial institutions to report transactions involving cryptocurrency mixers, acknowledging that while these services could potentially conceal illegal activities, they also protect individual financial privacy. Additionally, they revoked a previous requirement for financial institutions to verify identities and maintain records for certain transactions involving self-hosted cryptocurrency wallets, which users manage independently.

Investigator Infiltrates Network Laundering Funds for North Korea

Blockchain investigator ZachXBT disclosed that he managed to infiltrate a Chinese criminal organization responsible for laundering over $1 billion in stolen cryptocurrency associated with North Korea’s Lazarus Group. Following the substantial hack of the cryptocurrency exchange Bybit earlier in 2025, which precipitated losses of around $1.5 billion, ZachXBT posed as a potential customer intending to engage in transactions. His efforts uncovered connections to illicit activities and provided critical insights into the laundering operations, subsequently shared with law enforcement agencies for further investigation.

Chainalysis Confirms Crypto Wallets in Ransomware Gang Leak

In a significant revelation, the blockchain analytics firm Chainalysis confirmed the authenticity of cryptocurrency addresses disclosed in leaked chats affiliated with the Silent Ransom Group, a criminal operation linked to Russia. The leak contained messages chronicling ransom payments, along with laundering techniques utilized by the group, which reportedly extorted over $207 million from numerous firms. Chainalysis traced several leaked wallet transactions back to vast sums accumulated from extortion, effectively highlighting the extensive operations of this criminal network.