The US Department of Justice brought charges in absentia against two Russian citizens: Daniil Potekhin (aka cronuswar) and Dmitry Karasavidi. The US Department of Justice accused the Russians in organizing a large-scale phishing operation against users of three cryptocurrency exchanges: Poloniex, Binance and Gemini.
The two suspects are accused of creating clone sites for the listed cryptocurrency exchanges, where they lured users and collected logins and passwords from their accounts. The stolen credentials were then used to access victims’ accounts and steal their crypto assets in Bitcoin (BTC) and Ethereum (ETH).
This phishing campaign began around June 2017, according to authorities.
“In total, attackers defrauded 313 Poloniex users, 142 Binance users and 42 Gemini users by stealing $ 16,876,000 worth of cryptocurrencies”, – says the court documents.
According to the published indictment, Potenkhin and Karasavidi were withdrawing funds stolen from other users, to intermediate accounts in various exchangers (including Poloniex, Binance, Gemini and Bittrex), created using fake documents.
In turn, the US Treasury Department reported that, despite all the efforts of hackers to launder the stolen funds on various exchanges, accounts and blockchains, experts from the US Secret Service were able to track and seize money. As a result, representatives of the Ministry of Finance wrote that they imposed sanctions on both suspects.
In addition, the Department of Justice reports that the suspects were not only involved in stealing cryptocurrencies, but also manipulated the market using cheap altcoins.
“The defendants first created several bogus accounts on the same [exchange] platform, and each of those accounts acquired a low-cost digital currency known before the manipulation as GAS”, — Justice officials said, referring to the incident that began in July 2017.
Then, on October 29, 2017, according to prosecution, the defendants took control of the accounts of the three affected [attacks] customers and used the digital currency held in their accounts, valued at more than $5,000,000 at the time, to simultaneously purchase GAS, which sharply increased demand and price. The defendants and their accomplices then quickly converted the digital currency in their fictitious accounts from GAS to Bitcoin and other digital currencies, causing the value of GAS to plummet.
Prosecutor David Anderson said that in total, two Russians face up to 59 years in prison. However, so far both suspects are not arrested, and, presumably, hide in Russia.
Let me remind you that recently the Ukrainian cyber police in cooperation with Binance detained operators of 20 cryptocurrency exchangers.