US makes arrests for two seperate crypto cases in crackdown

Two Russians and two Malaysians have been taken into custody by US authorities for orchestrating crypto schemes

Image of the Department of Justice building in the US
The US Department of Justice made arrests in two seperate crypto cases, indicating a potential crack down on crypto-related crime

The US is ramping up their work in taking down international hackers behind the theft of millions of dollars in cryptocurrency.

The US Department of Justice, with the US Department of Homeland Security and the US Department of the Treasury’s Office of Foreign Assets Control, revealed on Wednesday that they had imposed sanctions on two Russian nationals who were responsible for launching a complex phishing campaign. They managed to take off with at least $16.8 million from the customers of three digital currency exchanges in 2017 and 2018.

Two out of the three exchanges were based in the US.

The two individuals, Danil Potekhin and Dmitrii Karasavidi, set up several websites that impersonated cryptocurrency exchanges. They used these sites to steal login information from unsuspecting victims. Once they gained control, they used the accounts that were verified with stolen identities to move the assets through several different intermediaries and carry out pump and dump schemes targeting altcoins with low market capitalisation.

Steven Mnuchin, the Secretary of the Treasury, stated that the people behind the operation “defrauded American citizens, businesses, and others by deceiving them and stealing virtual currency from their accounts”.

“The Treasury Department will continue to use our authorities to target cyber criminals and remains committed to the safe and secure use of emerging technologies in the financial sector,” he continued.

Following this announcement, the US Department of Justice announced on the same day that two hackers had been located in Malaysia. They appear to be connected to computer hacking campaigns that have targeted more than 100 companies, universities, governments and non-profit organisations internationally.

The two individuals are each facing charges that could cost them 77 years in prison. Give other individuals, who have been identified as Chinese nationals, are still at large — including one particular person who claims that he or she has ties to the Ministry of State Security in China.

The group managed to hack into computing infrastructure to steal source code, business information, data on customer accounts. They also used their access to launch ransomware and crypto jacking schemes.

The Deputy Director of the FBI, David Bowdich, said that these announcements “serve as a reminder to those who continue to deploy malicious cyber tactics that we will utilise every tool we have to administer justice”.

The indictment for the Malaysians was unsealed last month, while the indictments for the hackers from China were unsealed in August 2019 and August 2020.

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