Home News DEA Loses $50,000 of Cryptocurrency To Scammer

DEA Loses $50,000 of Cryptocurrency To Scammer

DEA Loses $50,000 of Cryptocurrency To Scammer

The United States Drug Enforcement Administration (DEA) fell victim to a common cryptocurrency scam earlier this year, which resulted in the loss of more than $50,000 worth of digital currency. This was an unexpected turn of events that occurred earlier in this year. Despite the fact that the monies were part of a meticulous investigation that had been going on for three years into the possible laundering of illicit money using digital currencies, they were lost.

The DEA made a significant seizure of $500,000 worth of Tether in May. Tether is a cryptocurrency that is pegged to the dollar and was taken from two accounts on Binance that were suspected of being involved in illegal activity. These funds were then transferred in a safe manner to DEA accounts and kept in a Trezor hardware wallet that was kept within a secure location.

However, things took a turn for the worst when a con artist carefully monitored the DEA’s activity on the blockchain. As soon as the DEA sent a test amount of $45.36 worth of Tether to the United States Marshals Service for processing in accordance with routine forfeiture procedures, the con artist immediately went into action. They concocted a fake cryptocurrency address that looked strikingly similar to the Marshals account. This address was created with the intention of fooling those who only looked at the first five and last four characters of the address.

The con artist got into the DEA’s system by using a legitimate feature of cryptocurrencies called “airdropping.” This allowed the con artist to install the false address. The expectation was that the DEA would get confused and think that this fictitious location was indeed the correct one for the Marshals. This con artist gambled on the widespread practice of copy-pasting, which is necessary due to the lengthy nature of cryptographic addresses.

Unfortunately, the con artist was successful in his gamble. The Drug Enforcement Administration (DEA) accidentally transferred all $55,000 at once. The problem had been discovered and Tether had been notified before the funds were lost, but it was too late.

Jake Moore from ESET brought attention to the seriousness of the problem by noting, “It underscores the significance of thoroughly verifying transactions and employing multiple verification levels, especially when massive amounts are at play.” This statement brought attention to the gravity of the situation.

During the course of their joint investigation, the FBI and the DEA made the startling discovery that the con artist had converted the monies into Ether and then transferred it to a new wallet. Binance records have offered plausible clues relating to the payment of the scammer’s transaction fees; nevertheless, the wallet’s owner has not yet been identified. At this point, our best hope is that Google will be able to provide some light on the identities of the individuals responsible for the hacking of two connected Gmail accounts.

This crafty con artist, or collection of con artists, has been making significant headway. A recent search revealed that their wallet held nearly $40,000 worth of Ether, but that since June it had been the recipient of transactions totaling $425,000. In only the past three weeks, an astounding $300,000 was distributed among a number of different wallets.

The DEA and the FBI have not yet provided their responses.

This instance serves as a sobering warning of the growing sophistication of crypto frauds, and it should be avoided at all costs. Typical “airdrop” scams may tempt their victims with the promise of big sums of money in order to trick them into falling for phishing schemes. However, the predicament the DEA was in displayed an ominous turn of events.

The important takeaway from this, as pointed out by Jake Moore of ESET, is that although some people may assume that checking the final few digits of an address is adequate, this is a hazardous assumption. He stressed, “In this digital age, cybercriminals are frequently one step ahead in digital crime and fraud.” he said this several times.

This instance highlights the significance of alertness, comprehensive checks, and the use of advanced technologies, such as Chainalysis’ Address Screening, to prevent falling prey to creative scams like the ones that have been perpetrated. Those involved in the cryptocurrency industry should take note.


Please enter your comment!
Please enter your name here