U.S. Department of Justice filed charges in absentia two citizens of Russia: Daniil Potekhin (aka cronuswar) and Dmitry Karasavidi. They are suspected of 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. Court documents state that a total of 313 Poloniex users, 142 Binance users, and 42 Gemini users were defrauded by attackers, stealing $ 16,876,000 worth of cryptocurrencies.
According to the published indictment, Potenkhin and Karasavidi withdrew funds stolen from people 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, some of the funds were able to track and seize by experts from the US Secret Service. As a result, representatives of the Ministry of Finance write that imposed sanctions on both suspects.
In addition, the Justice Department reports that the suspects were not only engaged in theft of 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, the defendants took control of the accounts of three affected (from attacks) customers and used the digital currency held in their accounts, worth more than $ 5,000,000 at the time, to simultaneously purchase GAS, which sharply increased demand and the 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, but so far both suspects remain at large and, presumably, are in Russia.