A&D Forensics Manager Sewe Wycklife // Web3 Accountant Radio Ep16 Transcript
Sewe Wycklife is the Manager of A&D Forensics
A&D Forensics trace, investigate blockchain and cryptocurrency related frauds, scams, ICO frauds and exit scams. They also train and help our customers stay compliant by avoiding the murky waters of blockchain and cryptocurrency.
In this conversation, we dive into:
1. Common Crypto Scams
2. Tip to prevent against phishing and social engineering
3. What is the cost of initial assessment
4. How long does it take for victims to get back the crypto
5. Why did Sewe decide to enter the Web3 space?
6. One key finance/ compliance lesson from Sewe
7. What is Sewe looking forward to in the Web3 space?
And more!
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Connect with Sewe & A&D Forensics👇
Linkedin: / sewe-wycklife-cce-cci-ccs-62733974/
Website: https://adforensics.co.ke/
Hi everyone, welcome to the Web3 Accountant Radio, the podcast where we dive into the fascinating world of Web3 finance and compliance. I’m today’s host Diana and my partner is Wei Xiang. Hello, Wei Xiang.
Hi, Diana. Today we are very lucky to have Wyck with us to share with us what to do when you lose your crypto. Sewe Wycklife is a broad trend forensic specialist and an A&D forensics in East Africa.
East Africa’s leading broadchain intelligence service provider. They trace and investigate blockchain and cryptocurrency related frauds, scams, eco frauds and easy scams. And nice to meet you, Wei Xiang.
Thank you so much. Glad to meet you, Diana, as well. Thank you, Wei Xiang, for the introduction.
So maybe before we start with what to do when you lose your crypto, which Wyck himself is an expert in, you should definitely contact Wyck when you lose your crypto. But one thing that we should learn from Wyck is what are the common crypto scams out there that, you know, as finance or compliance people, we should be aware of as a first step. What are some common scams that you are seeing nowadays? All right.
Thank you so much, Wei and Diana, for such a lovely introduction. And based on this end, especially in East Africa, and also I’ll touch on some of the cases which we’ve been basically receiving in-house. Most of the common cases that we’ve been interacting with when we receive victims or clients who have reported, most of the cases are basically happening as a form of phishing scams or Ponzi schemes and rug pulls.
But majority of them have basically been falling under Ponzi schemes where people come disguising themselves that they are investors and they lure people to invest big money into their companies. And then all of a sudden what happens, it turns out to be a Ponzi scheme. And those people who are really invested end up losing huge money, most of which are basically being turned into cryptocurrency.
I see. But how about scamming of businesses or corporates or is scams for corporates a lot lesser? Because I think the Ponzi scheme scam is very common for retailers, but how about companies? Yes. With companies, probably the case which we are currently handling happened as a form of a phishing attack.
And also another one happened as a wallet theft or cryptocurrency theft or hacking. So mostly when it comes to institutions, you’ll notice that there is what is usually called social engineering as well, which have been more or less frequent from the ones which have been receiving. So institutions basically suffer from social engineering, phishing or hacking theft.
So those are the most common prevalent scams which we have seen happening in some of the institutions that we currently have around. Thank you. So, I mean, you have spoke about social engineering and phishing.
What should corporate finance and compliance managers do? One tip from you to prevent against phishing and social engineering. Yeah, basically notice that with phishing emails, you’ll realize that what these scammers usually do, they normally send emails, very suspicious links through emails or through mobile phones. You’ll notice that when you come to Africa and more so in the eastern part of Africa where I’m based, we use a lot of mobile money transfers.
And through mobile money transfers, we use, people normally experience a lot of phishing links which are being sent to them. What normally happens for institutions or employees who are not cautious enough, they may end up clicking these links, not realizing that these links have been sent by scammers. Once they have clicked, it will make scammers work more easier to access the company information, to access their credentials so that these scammers can be able to have access on some sensitive information from the company.
What I normally advise anytime we are having capacity building to a financial expert or compliance officers, they need to just train the employees or train their staff to become vigilant and to be aware not to be clicking any links which are usually sent to them either through phone or through email. Any suspicious link which has been sent, they should be aware not very quick to click because most of them might lead to phishing scams. Thank you Wyck.
I mean thanks for giving such an in-depth training. Now if a company has already lost its crypto, what is the first thing that the senior management or finance manager should do? You know they realize the crypto is missing from their wallet, what should they do? Thank you so much Wei for that question. What normally happens at A&E for ASICs, we normally have what is called initial assessment and this initial assessment usually happens when a case has been reported.
Let’s say an institution has reported there is a fraud which has happened and this money has found its place to a crypto ecosystem or the web3 platform. What normally happens once we have received information as A&E for ASICs, we normally do what is called the evaluation. At the evaluation phase, we normally do what is called gathering information about the incident.
We just want to identify what type of the scam basically happened that made cryptocurrency to be lost. We also want to establish how did it happen so that at least when we will be creating or building capacity, we get to train these compliance officers and financial experts. These are the most common ways on how these scams are happening.
We normally just as much as we can gather that information as well, just try to understand how did this scam basically happen. Was it a social engineering or was it a wallet hack? And also what normally happens during the gathering of information, we want to understand the wallet addresses involved and we want to also identify the amount of crypto assets which was stolen or the amount of crypto assets in question. And also based on that information received, we normally evaluate everything and then from there now we are able to give the client feedback based on what is called preliminary investigation so that they can be able to understand the scope on how we are going to do the detailed investigation.
After conducting that preliminary investigation or initial assessment, we are usually able to advise the client on how best we can be able to help that institution, maybe probably do the investigation or follow the money or even help them when it comes to doing the recovery process. So how long does the initial assessment take usually? With the initial assessment, usually it doesn’t take long per se. Based on the case that’s why we normally encourage a lot of preliminary investigation because with the preliminary investigation it basically gives us just a general outlook of how the detailed investigation is going to be.
You notice most of the time based on the crypto asset in question, some preliminary investigation can even run between two to three days and then immediately after that we’ll be able to get back to the client and tell them based on the information which they have shared this and this is what we are likely to do and this is the scope of what we are going to do. Once they’re in agreement, then we can now be able to even sign a legal binding agreement within that client so that we can now start conducting. Allow me also to touch on which normally happens when you are conducting investigation.
Once I’ve received the case, my main ultimate goal as an investigation officer is to find these things, to establish the center of funds. I also want to establish the receiver of funds. Remember when it comes to cryptocurrency investigations, we are dealing with wallet addresses.
I want to establish the services this particular wallet addresses interacted with. Did it interact with the mixers? Were there any chain open elements in it? I want to identify whether there was an illicit activity which was done by these cryptocurrencies which was stolen or cryptocurrencies which were scammed. I also want to identify whether are there any other accounts or other touch points with these scammed cryptocurrencies.
My work is also to identify the cash out locations. If these cryptocurrencies were stolen from an institution, where were they taken to? Back in the lab, what you normally say as much as you can to identify is the cash out location. Through those cash out locations, we are able now to work in hand with the law enforcement officers who can be able now to request from the exchanges what is called the PII, the personal identifiable information for the culprits involved.
What is the cost of the initial assessment? The cost usually varies. The cost usually varies with the amount in question. It usually depends.
With that one, it usually depends with the amount of cryptocurrency which has been stolen or the amount of cryptocurrency which has been scammed. With the cost, that one usually varies. I see.
What is your success rate so far? How many have you successfully helped the customers? Yeah, at the moment, of course, we have been having a positive success rate in terms of trying as much as we can to follow the money. Maybe a case in point, there was one of the crypto exchanges which was hacked, and so many cryptocurrencies were stolen from that exchange rate. What happened when they came and reported, immediately we jumped into action.
And that’s why we normally also tell these institutions, whenever there is a scam which has happened, and this scam had led to money being converted into cryptocurrency, with cryptocurrencies, reporting the case on a timely manner is very much encouraged. Because again, remember, any delay that happens when you don’t report this case, then it means criminals can actually take advantage and be able to cash out those cryptocurrencies very quickly. So anytime you’re doing capacity building, we normally encourage most institutions, whenever a hack has happened, whenever a scam has happened, they need to report it very fast so that from our end as blockchain forensic specialists, we can be able to jump into it, follow the money, be able to indicate how the money has been moving within the blockchain ecosystem, be able to identify the cash out locations very quickly, be able to rope in the local law enforcement so that we can be able to obtain the information for the culprits behind.
There is an exchange rate which we really helped out, they reported very fast, and we were able to help them track down the flow of funds. The only challenge which we experienced during that is because you realize that sometimes when money has been stolen, let’s say in Kenya, for example, it is being cashed out in a different jurisdiction. Like a case in point, we had a case whereby the money which was stolen from this particular crypto exchange was cashed out in a crypto exchange which is based in Mexico.
With that now becomes a little bit challenging when it comes to having, when countries are in good terms in terms of mutual legal assistance, whereby countries cannot be able to come in and help each other when it comes to repatriating the stolen cryptocurrencies. I see. I mean, other than contacting Wyck yourself as an investigator, how about insurance or lawyers or police, you know, let’s say like a company when he lost his crypto, of course, he should contact you.
But how about contacting the other parties? How do all of you work together or do you not work together? Yes. As I mentioned earlier, we normally collaborate with the law enforcement a lot. And that’s why in our business, we work in handy with the legal experts.
We work in handy with the law enforcement. So anytime we have received a case, let’s say an institution has contacted us, at one point, we will have to involve the law enforcement, because according to them, they have the authority to be able to request for information from the cryptocurrency exchanges involved. What normally happens, we have a team of law enforcement officers, which we are currently working together with.
We also have a team of legal experts whom we are currently working with also as well. It’s an ecosystem where we collaborate with these professionals to ensure that we help the victims or the institutions where the scam or the theft has happened. So usually, how long does it take for the victim to get back the crypto? Because, you know, after the initial assessment is the enforcement, how long is the enforcement? So it usually depends, again, with the crypto, where, for example, let’s say we have followed the funds and funds have landed into one of the crypto exchanges.
Remember, again, every exchange, they have got their rules, they have got their policies, they have got their way of operation. All right. You will see most exchanges, they will tell you, you will have to give them 15 days in order for them to also work out on the report which they have received from you people.
Some of the exchanges will tell you to wait for that days. It depends with where the funds have been traced and have landed into. The days will vary depending on the exchange.
Some exchanges usually take a little bit longer, but some usually take a little bit shorter. But it can range between 15 days, 30 days, depending with the exchange where that particular crypto asset which is being investigated landed into. Where do you see most of the scams happening in terms of geography? So where are most of your clients coming from? I can say given that Web3 is a new ecosystem altogether, I wouldn’t be able to pinpoint like there is a specific region per se.
The main reason why I’m saying so is because when you look at even the cases which we are currently handling in-house, institutions which have reported these cases, they are based in different regions altogether. For example, A&E Forensics, we operate across Africa. We have branches in Kenya, we have branches in Ghana, we have a branch in Nigeria.
So right now we are basically subbing the entire African market. So most of the cases we have been receiving from Kenya institutions based in Kenya, for example, there is a bank which we are currently helping out with an investigation. A fraud happened and then most of the money which was stolen landed into the crypto ecosystem.
There is also another bank which we are trying to investigate, helping them when it comes to tracing their funds. They also experienced a fraud which happened. And this bank is also based in Nigeria.
There is an exchange which is based in Ghana. So most of the clients or most of the institutions are basically reporting these cases. They are based in different locations.
We don’t have like a specific area which is basically reporting these cases. It covers a very large area. Yeah.
Thank you. Thank you, Wyck. I think other than your professional knowledge with regards to what to do during a scam and what to do when you lose your crypto, I think in this podcast itself, we would like to know more about you, Wyck, as a person.
Diana, please. OK, let’s move to today’s free talk session. And in this session, I have a few questions about the inspiration that you entered the Web3 space.
The first question is, why did you decide to enter the Web3 space? Well, thank you so much, Diana, for that lovely question. Ideally, what basically motivated me to enter the Web3 industry? I have a background in criminology and security studies. And having that background, I’ve always been somebody who wants to be in a world which is more safer, where people can be able to do their errands without criminal interference.
That has actually been my motivating factor. And again, you see, during my learning, especially as a criminology and security study professional, I came to notice that there is emerging technology, especially with blockchain technology. And I also decided to dive deep to see with this emerging technology, especially with the Web3, how far can criminals decide to enter this space and exploit it in order to probably scam victims out of it.
I think with blockchain technology, it’s been fascinating so far. And it really also pushed me just to come into the space and also be able to learn and also find out ways of how I can be able to protect institutions and also protect individuals from unnecessary scams. And also with the Web3 space, the main reason, some of the reasons why I entered into it, I also want to see how, I also want to develop my forensic skills and especially see how I can be able to probably build my forensic skills, especially within the blockchain technology or Web3 ecosystem.
Those are some of the reasons which pushed me to the Web3 industry. So far, so good. I’m really loving it with the new challenges and especially also with criminals trying as much as they can to take advantage because of that knowledge gap.
But we are also trying as much as we can to make sure that our institutions are educated. We are making sure that individuals get the needed education and information so that they can be able to be safe and also try as much as they can to protect their crypto assets. Okay.
And during your career that you’re chasing the crime problems and protecting some institutions and the association themselves with your love. And can you share maybe one key lessons that you have learned in this journey and it will be very valuable for our listeners? Yeah. So far, of course, in this field, as I’ve mentioned earlier, we are also experiencing some challenges.
And one of the key challenges, key challenge is remember cryptocurrency is trust border. It basically moves very fast. Cryptocurrency, which an individual or an institution which has been scammed in Kenya within a blink of an eye, this crypto will actually be is being cast out in a place in Asia or a place in Europe.
With that trust border, we normally receive a lot of challenges because now we have to involve so many professionals who can be able to help us when it comes to getting information from that other country where the cryptocurrency finally landed. So those are some of the challenges we are currently experiencing as a whole is because there is that jurisdictional boundaries. And again, remember, we have got different laws, laws which are applying in Kenya, probably might not be necessary laws which are applying in a country like Mexico.
So anytime we have these cryptocurrencies moving from a country in Kenya and maybe probably finding their way to another jurisdiction where their laws are totally different, then it becomes a total difficult process when it comes to initiating matters of recovery. I think those are some of the hurdles which we have been currently experiencing. And also another key challenge is that with Web3, it’s a new technology altogether.
Most institutions, most people still do not understand how the Web3 ecosystem works. So anytime a crime has happened or any time a scam has happened, most institutions usually take time to report these cases. By the time they’re reporting, all the cryptocurrency has already been moved and it has already left the blockchain ecosystem.
Those are some of the key challenges which we are trying to deal with here and now. But we are also trying to educate most of our members. We are also trying to educate this institution so that when such kind of a scam happens, how they can be able to go about it so that we can be able to act in a very swift format and also be in a position to help them more effectively.
Okay. And in this area, so what are you looking forward to in the future? Thank you so much, Diana. Of course, I know as the adoption of Web3 application continues, we are also likely to see a potential increase in criminal activity in this space, given that with the criminals, they’re always ahead of the game, trying to learn new technologies on how they can be able to do their criminal activities.
What I’m basically seeing also as the world continues to adopt Web3 applications, Web3 uses, then we are also likely to see potential criminals trying to find ways on how they can be able to commit crime. Also, another thing which I’m basically looking forward to, especially the space, I’m also looking forward to seeing improved regulations and clarity, both at local level and global level. And we have been seeing most countries have already started initiating discussions around regulating Web3 and more so cryptocurrency.
The other day we saw from analysis when they released out their report, especially in Africa. And from the report, it indicated that Nigeria is currently being ranked as number two globally in terms of cryptocurrency transactions. And then in that list, we had Kenya also coming in handy.
We had South Africa, we had Ethiopia. With this kind of adoption, most countries I’m seeing working very fast in order to put regulations in place so that they can be able also to protect institutions and investors. Also, another thing I’m also seeing, I’m looking forward to, is that most institutions will start looking at ways on how they can be able to integrate blockchain and traditional finance.
And that’s the conversation which most financial institutions have already started having. They’ve already started having that discussion on how they can be able to integrate Web3 into their already existing traditional way of operation. And also, even as the Web3 continues to evolve, I’m also looking forward to see new methods of how for us as blockchain forensic specialists, we can be able to help in mitigating crimes that happen within the space.
I know we are going to have new tools which are going to come in. We are going to have new techniques which will be able to help us, especially when it comes to fighting financial crimes within the Web3 ecosystem. So those are some of the things which I’m basically looking forward to, especially when it comes to the Web3 space.
Wyck, so a question from me. You tell people how to avoid social engineering, how to avoid phishing scams, and you are asking for more regulation when I hear you saying what you are looking forward to in the future. Just one question from me.
If everybody is not being scammed, I think you know you will not have a job, right? Yes. Are you afraid for your job if everybody, you know, they know how to do and then the police know, the enforcement, they know what to do. So Wyck will have no more job.
Yeah. Actually, this is the question I’m also very curious. Okay.
You see, thank you so much for that question. One thing I need to tell you in response to that is maybe probably, I know even from the country which you are coming from, you have the law enforcement and the work of the law enforcement is to make sure that there is law and order and also to be able to control the kind of crimes that happen. You cannot be able to completely eradicate crime.
That is a fact. Crime is there to stay. In as much as I know, as blockchain forensic specialists, we may want probably to see crime is not happening.
What normally happens, we are basically, what we really want from our end is just to see the rate of crimes reduce or how we can be able to mitigate but not to completely eradicate. We cannot completely eradicate crime because the moment we eradicate crime, and of course I don’t think if there is any country in the world which can completely eradicate crime, it’s something which I think it’s totally difficult to do or to achieve. So mostly what usually happens is we just start on thinking ways on how best can we be able to mitigate.
And through this mitigation, people like us as a blockchain forensic specialist, we sit on the table, we say, okay, crime is happening within the cryptocurrency ecosystem. How do we ensure that we mitigate so that it doesn’t increase? Instead of increasing, let it decrease. But ideally, as you’re saying, if crime completely disappears, then of course I will run out of job.
And if I run out of job, then where will I be? I’m basically just praying that, I’m not even praying for them to increase, but I’m just praying how we can be able to find ways and how we can be able to mitigate the rate of crime. Yes. Thank you, Wyck from A&D Forensics, spending his precious time here sharing with us today.
So many tips. Yeah. So any last words from you, Diana or Wyck? No, thank you.
All right. Thank you so much, Wei and Diana. It has been a really wonderful podcast.
So for all the viewers out there, I’ll be very thankful if you can like and subscribe. Till next time.