The US DoJ intensifies legal actions against crypto scams

September 17, 2020
By Sam Grant

Following the rise of crypto-related crimes, the US is ramping up its enforcement action against cybercriminals and hackers

The Department of Justice announced that it had conducted investigations and secured sanctions against two Russians while arresting two Malaysians involved in different 7-figure scams.

The Department of Justice alongside the Department of Homeland Security and the Treasury’s Office of Foreign Assets Control confirmed the imposition of sanctions on the Russian pair yesterday.

The two stole funds in excess of $16.8 million by phishing customers from three crypto exchanges. The crime took place between 2017 and 2018, with two of the three exchanges being from the US.

Dmitrii Karasavidi and Danil Potekhin committed the crime by building several websites that posed as legitimate crypto exchanges to steal account credentials from unsuspecting victims. They would then use the accounts verified with stolen identities to transfer the digital assets through a network of intermediaries.

The pair would also execute artificial inflation to boost the value of the altcoins with low market cap before selling them to make profits.

“The individuals who administered this scheme defrauded American citizens, businesses, and others by deceiving them and stealing virtual currency from their accounts,” said Steven Mnuchin, the secretary of the treasury. “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.”

At the same time, the US Department of Justice also announced the arrest of two Malaysian hackers in Malaysia. The two were apprehended in connection with computer hacking campaigns targeting over 100 education, corporate and government institutions around the world.

Five Chinese nationals, including one alleged to have ties with the Ministry of State Security in China, are also on the run. The group is said to have infiltrated a computing infrastructure to get access to confidential information illegally.

Speaking on behalf of the FBI, deputy director David Bowdich said, “Today’s announcement demonstrates the ramifications faced by the hackers in China but it is also a reminder to those who continue to deploy malicious cyber tactics that we will utilise every tool we have to administer justice.”