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The US government sends confiscated cryptocurrencies to scammers

The US government sends confiscated cryptocurrencies to scammers

The Drug Enforcement Agency (DEA) has recently been the target of a common scam. The DEA unknowingly sent a large portion of the confiscated cryptocurrencies to a scammer’s address.

Half a million stablecoin tethers confiscated

Up to $500,000 of stablecoin Tether (USDT) was seized in a DEA raid earlier this year, according to a Forbes report. According to the report, this massive amount of USDT came from drug cases.

In total, two suspicious accounts on Binance’s trading platform were involved in the seizure. The criminals were probably trying to launder their illicit proceeds through the crypto exchange.

The large number of stablecoins were held in controlled accounts by the DEA. These accounts were managed by the DEA and stored on a secure Trezor hardware wallet. For added protection, this hardware wallet has been stored in a secure vault.

DEA target of crypto scams

As standard procedure for a confiscation order, the DEA forwarded a small portion of the USDT amount seized to the digital wallet of the United States Marshals Service (USMS), a US law enforcement organization.

However, one vigilant scammer kept an eye on the blockchain and mistook the DEA for an ordinary scam. The scammer quickly generated a wallet address that matched the first five and last four characters of the USMS address. Then, using the fake address, the scammer made a transaction in the DEA’s ledger that closely resembled the earlier test payment to the USMS.

So the address seemed to come from the USMS and the DEA had apparently fallen for it. The US government agency sent a whopping $55,000 worth of USDT to the fake address. By the time the marshals realized something was wrong, it was already too late. After a request to block the fake account, Tether reported that the funds had already disappeared from the wallet. Working with the FBI, it was discovered that the missing funds were quickly converted to Ethereum (ETH).

It is still unknown who the scammer is. However, a search revealed that the scammer has received up to $425.00 in ETH since June. The search also revealed that more than $300,000 in ETH was transferred to seven different digital wallets over the past three weeks. The FBI hopes Google can help track down the scammer as two Gmail addresses were used to create accounts on Binance.

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