The U.S. Department of Justice (DOJ) has indicted two Russian nationals for allegedly running a near $17 million cryptocurrency phishing campaign that defrauded both crypto exchanges and their customers.
According to the DOJ’s official statement both individuals, Danil Potekhin and Dimitrii Karasavidi, created numerous websites mimicking those of legitimate cryptocurrency exchanges and lured users onto these websites. Once users entered their login credentials on them, they copied them.
Using these credentials, both individuals accessed the users’ accounts on legitimate cryptocurrency exchanges and either stole their cryptoassets or manipulated cryptocurrencies with thin trading volumes to pump their price and dump the tokens on other users.
The DOJ claimed that both Russian nationals were active from July 2017 and created and controlled at least 13 different phishing websites. With these, they managed to have access to over 150 cryptocurrency exchange users’ accounts.
At one point in 2017, the Russian nationals allegedly got a hold of three customer accounts that had over $5 million worth of cryptocurrency in them. They used the funds to manipulate the price of the GAS token, driving it higher. Once the token was trading at a higher price, the individuals sold their holdings, leading to a sharp drop in the token’s price.
The defendants and their co-conspirators 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 and leaving the value of GAS that remained in the victim customer accounts worthless, causing a loss to these three victims of approximately $5 million.
Per the DOJ’s statement, cryptocurrency exchanges and their users lost about $16.8 million in total because of the phishing campaign. U.S. Attorney David Anderson was quoted in the statement, commenting that when users enter the crypto space they need to be cautious as exchanges are “not like banks.”
Anderson added that security in the space is “only as good as your own vigilance,” even though law enforcement “will do everything within our power to protect you, you must also protect yourself.”
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