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UJ DOJ Indicted Two Russians For Duping $17M From Crypto Exchanges and Customers



The US Department of Justice (DOJ) has indicted two Russian nationals for allegedly defrauding nearly $17 million worth of digital assets from cryptocurrency exchanges and their customers.

Two Russians Allegedly Steal $17M In Crypto

According to the DOJ’s official statement, the two Russians, Danil Potekhin (going under the username cronuswar) and Dimitrii Karasavidi (Dmitriy Karasvidi),  used phishing and spoofing to dupe the exchanges and their users.

They created numerous web domains that mimicked those of legitimate cryptocurrency trading platforms. Users who failed to notice the small differences between the original and copycat websites provided personal information, credit card details, and cryptocurrency addresses.

By gaining access to the victims’ accounts, Potekhin and Karasavidi entered the virtual asset exchanges and stole funds, or they “manipulated cryptocurrency markets for their own gain.”

The DOJ claimed that the two Russian nationals were active from July 2017 and had created and controlled at least 13 separate fake web domains. They duped over 150 customers of several undisclosed exchanges.

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Later in 2017, the perpetrators took control over three customer accounts that contained over $5 million at the time. They used the massive amount to purchase the GAS token, which drove its price higher.

As soon as that happened, they converted their GAS coins for Bitcoin and other cryptocurrencies, causing the price of GAS to plummet and leaving the remaining GAS tokens in the victims’ accounts worthless.

The DOJ estimated that the total loss for cryptocurrency exchanges and their customers to be $16.8 million.

It’s worth noting that the indictment merely alleges that the crimes were committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. As such, Potekhin and Karasavidi remain at large.

Cryptocurrency Security Is Your Own Vigilance

US Attorney David Anderson commented that when users enter the cryptocurrency field, they need to be more cautious as exchanges are “not like banks.” He added that the security on such platforms “is only as good as your own vigilance.”

However, he warned digital scammers and thieves that “we will prosecute internet frauds against US citizens regardless of where those frauds originate.” He also reassured the public that “law enforcement will do everything within our power to protect you.”

“The Secret Service mission has evolved to combat cyber fraud by tracing and seizing fraudulently obtained virtual currencies. These recent actions highlight the efforts of law enforcement to provide attribution to cyber criminals wherever they may reside.” – said Special Agent in Charge David Smith.

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