Discussing Curative Web3 Security With Bezalel Eithan Raviv

I recently caught up with Bezalel Eithan Raviv, Founder and CEO of Lionsgate Network. In our discussion, we delved into the evolving cybersecurity threats in Web3, addressed victim challenges in combating fraud, and explored the need for enhanced security, awareness, and collaboration for a safer Web3 ecosystem.

Welcome, Bezalel. Let’s kick off with your origin story and how you got here.

Sure. Thanks for having me.

After leaving college, I served in Unit 8200 of the Israel Defence Forces from 1998 to 2001. It’s considered the elite division specializing in cybersecurity and intelligence—two main focal points for Lionsgate Network. My time there played a big role in shaping how I see security and technology for a safer world for everyone living in it. From 2001 to 2013, I pursued a full-time career in music, busy following my passion and making music. It was everything I had hoped it would be.

I signed a contract with EMI Music and took part in Eurovision, the European Broadcasting Union’s international songwriting contest that discovered Celine Dion and ABBA. It was an amazing ride, but at some point, I couldn’t make the money I needed to support myself. The numbers just never added up.

When Universal Records presented me with the opportunity to hand over 50% of my publishing catalog to them solely to secure a signing deal, I realized that this path didn't resonate with my values, as asset ownership is fundamental to my core principles.

In 2007, I decided to found my first company, TMG Music Publishing. That’s when I realized the trickle-down model in the industry and how musicians are the last to get paid for products they create with such hard work.

Realizing that Spotify paid me and every other artist only 0.003 USD per stream hit me hard. To earn a dollar, I needed 333 streams, plus a 30% tax. To cover monthly bills, you would need over 0.5 million streams every month.

Decentralized tech-enabled viable solutions to this problem. So I founded Halleluiah, introducing smart contracts to music copyrights the Fort Knox of the music industry.

All was well, except I couldn’t ignore the security lapses facing Web3 and blockchain-based environments. With hacks and scams on the rise, robust intelligence solutions have become a must. Thus, Lionsgate Network. It’s the culmination of everything I’ve learned since Unit 8200, but now, I’m learning a lot more from it—a virtuous cycle, I’d say.

Can you touch on why security remains a key concern for Web3?

Of course. I can talk about it all day.

Security has two aspects. One is preventive, where you want to stop attacks before or while they occur. This includes real-time monitoring and threat detection systems, on-chain encryption, etc.

Most Web3 security discussions revolve around preventive measures. The innovations are likewise. And this is important as more money flows into the industry and stakes get higher.

We’ve even seen significant success on the preventive security front. Around 96% less money was lost to hacks and scams in 2023 compared to 2022.

But the other, mostly underserved, aspect of security is curative. Things you can do to minimize the harm after the attack has occurred.

Let’s face it. Web3 hackers are smart, and they’re getting smarter. No matter how robust our preventive systems are, they’ll find ways to exploit platforms and protocols. The question is, how do we recover funds lost in such attacks, breaches, and collapses?

Recovering lost funds is 1000 times more complicated in Web3 than in Web2. It requires special tools and intelligence frameworks—you must respect the industry’s core principles like anonymity while tracing attackers to get your money back. That’s what we do at Lionsgate.

A common perception is that funds lost in the crypto "wild west" are irrecoverable. Lionsgate Network challenges this notion to alter the prevailing narrative. Correct?

Yes, absolutely.

Awareness is one of the biggest hurdles when it comes to solving crypto crimes and recovering lost funds. Most people don’t realize they’ve been in a scam until it’s too late. Or, they believe the lost-for-good narrative.

What’s worse, they’ve had negative experiences in the past when trying to get their lost crypto back. Scammy or futile services from so-called ‘crypto recovery’ companies is a key example. And even if the services aren’t altogether worthless, they involve much hassle for victims and take a lot of time—the majority of Mt. Gox victims still haven’t got their money back for instance.

At Lionsgate Network, we’re solving these problems end-to-end. First, we have an expert team and use cutting-edge technology to literally do everything in our capacity to resolve thefts.

Secondly, and more importantly, we make the process seamless and risk-minimized for our customers.

Overall, we begin by helping victims become problem-aware. They’re invited to a safe space where they can report the incident through a friendly, non-judgemental questionnaire. Then, our in-house analyst gets on a call with them to discuss the issue further.

Over 2000 entities from the US, UK, Australia, and elsewhere have requested our services in 2023 alone. We’ve helped most of them who were eligible, thanks to our team’s prowess in data analytics and cyber intelligence.

Web3 security is improving, but as you said, attackers are also becoming smarter. Did you notice any novel attack types recently?

Yes. They aren’t entirely novel, but romance scams have been very prevalent. Especially since 2021, when people increasingly sought companionship during the pandemic.

Pig Butchering scams, as they’re commonly known, drained over $53.5 billion in 2023, though over 70% of attacks went unreported. Victims were emotionally manipulated and exploited in the name of love and romance—mostly men and women in the 48-60 age group.

We call these attackers Financial Predators. They scrap the victim’s personal data from social media and online dating apps. They precisely analyze such data sets using advanced AI algorithms to discover and exploit emotional vulnerabilities.

What’s worse is that these models work in real-time, so it becomes very difficult for victims to call the bluff and free themselves from the attacker’s grip.

Romance scam victims are susceptible to rampant gaslighting and brainwashing to the point where they question their sanity and become emotionally dependent on the predator. When they realize the situation, if at all, it’s usually too late.

Unlike ordinary hacks or scams, the love and relationship angle involved in these attacks means victims go through severe psychological trauma. Suicides, marital breakdowns, intense guilt, and shame are the most common outcomes here.

Long story short, Web3 attacks have expanded way beyond financial loss. It’s time we approach the matter accordingly, especially when innovating solutions.

Looking at romance scams in particular, what challenges do these victims face when seeking respite? Is there a proper way out for them?

Yes, we’ve built a solution. But the challenges first—they’re based on the notion that crypto lost to scams is irrecoverable.

For context, less than 0.1% of romance scam victims could recover their stolen digital assets. Lionsgate helped with over 95% of these recoveries.

It’s like this because enforcement agencies still don’t consider crypto as “real money,” and they strongly believe there’s no way to get funds back. It’s true, in fact, from their point of view, given the lack of proper infrastructure and tools. For example, they don’t have the specialized knowledge to trace funds, perform on-chain analysis, etc.

Besides low awareness, legacy enforcement frameworks are mired in bureaucracy, which leads to delays and gives attackers the chance to liquidate funds and hide their tracks. Ironically, this actually makes stolen funds irrecoverable.

One way to solve this is to improve enforcement frameworks and capabilities. But that’s time-consuming as well.

We’ve thus built a solution to bypass traditional enforcement. Instead, we work directly with exchanges and wallet platforms to ensure proactive action. For example, the custodial or non-custodial platform can swiftly freeze funds and stop Financial Predators in their tracks.

Coupled with sophisticated on-chain analytics and attack tracing methods, we aim to provide holistic means to tackle threats and risks at multiple levels.

It’s literally only the beginning. There’s a long way to go for Web3 to reach the maturity and security levels necessary for sustained long-term adoption.

Why is fraud so prevalent in the US, Canada, Australia, and the UK right now? What is the biggest problem crypto victims in these territories have to face?

Well, fraud appears to be on the rise in regions like the US, Canada, Australia, and the UK due to a multitude of factors. The increasing reliance on digital platforms and online transactions has expanded the playing field for cybercriminals, who can exploit vulnerabilities with greater ease.

Moreover, the sophistication of modern scams poses challenges even for the most cautious individuals. Additionally, the global nature of technology enables fraudsters to operate across borders, complicating efforts to track them down.

Economic pressures, particularly during uncertain times marked by inflation, can drive individuals to seek higher returns, thereby increasing susceptibility to overpromised investments and scams. Just like how hungry fish are drawn to bait, financial difficulties can make people more vulnerable to scams. The promise of a quick meal can cloud their judgment.

To fight fraud effectively, we must stay alert and take proactive steps to avoid falling for deceptive schemes. Quick returns, zero risk, free bonuses, etc. are all huge red flags.