$17 million crypto scam leads to charges against two Russian fraudsters
By Bob Garcia
The Department of Justice wants to hold accountable two thieves who ripped off crypto exchange users
Two Russians are expected to face the wrath of the US Department of Justice (DOJ) for having bilked users of several cryptocurrency exchanges out of millions of dollars. The federal agency has announce that it has submitted charges against Danil “cronuswar” Potekhin and Dmitrii Karasavidi for their roles in a scam that saw them steal $17 million in Bitcoin (BTC) and Ether through users of the Binance, Gemini and Poloniex exchanges, and would love to give them the maximum sentence of 59 years each behind bars.
The two fraudsters apparently conducted their activity in 2017, just as BTC was on the rise. Faking the exchanges through the use of copycat websites, they were able to steal the login credentials of over 150 exchange users, giving them access to their accounts and their money. They tried to cover their tracks by moving the digital currency around several times, but it was ultimately traced to Karasavidi’s account. The DOJ has already confiscated most of the crypto, grabbing much of it in December 2017 before continuing to seize more last year. The Secret Service is now holding the digital currency, which could ultimately be auctioned off as property assets.
In addition to being common thieves, the pair also tried to manipulate the price of the GAS token through a “sophisticated market manipulation scheme that began in July 2017 using the stolen customer credentials.” This was done by using some of the stolen crypto – around $5 million – to make large purchases of GAS in order to increase interest and cause its price to suddenly increase. They then sold all of the GAS they controlled at the higher price, causing the token’s value to almost disappear completely.