The U.S. Treasury Department has unveiled sanctions against two Russian citizens whom it alleges stole close to $17 million worth of digital currencies in a sophisticated phishing campaign. In a separate indictment, the Department of Justice charged the two with aggravated identity theft, money laundering and computer fraud.
Danil Potekhin, 25, and Dmitrii Karasavidi, 35, allegedly engaged in a wide range of crimes in connection with a conspiracy to defraud 3 digital currency exchanges and their users, according to the DoJ indictment. Filed in February 2020, the indictment was unsealed at the Northern District of California this week.
Beginning in July 2017, Potekhin is suspected of creating and controlling at least 13 fake domains imitating a renowned U.S. digital currency exchange. Together with other alleged co-conspirators, he reportedly induced more than 150 users of the unnamed exchange to input their login credentials. Having acquired the credentials, they allegedly accessed the victims’ accounts and stole their digital currencies.
In addition to the theft, the DoJ further claimed that the defendants engaged in digital currency market manipulation. They created a number of fictitious accounts on the same trading platform and used these accounts to purchase GAS token, which at the time was inexpensive. A few months later, they took control of three victims’ accounts on the same platform and used over $5 million in stolen funds to purchase GAS. This created an illusion of demand and drove up the price. They then quickly converted the GAS to BTC and cashed out, causing the price to plummet.
The two defendants allegedly carried out similar attacks—one on another U.S. exchange and one on a foreign exchange.
In a YouTube video, the U.S. Attorney for the Northern District of California David Anderson revealed that the two face a maximum penalty of 59 years if found guilty.
“The defendants are charged with conspiracy, computer fraud, wire fraud, identity theft and money laundering. The statutory maximum penalty for the charges against the defendants is 59 years imprisonment.”
Anderson also cautioned would-be digital currency cons against targeting U.S. citizens, stating that his office will prosecute internet frauds “regardless of where those frauds originate.”
He also reminded the public to be vigilant when dealing with digital currencies, saying, “My warning to the public is that digital currency exchanges are not like banks. The security of digital currency exchanges is only as good as your own vigilance. While law enforcement will do everything within our power to protect you, you must also protect yourself.”
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