Scams are ever present in the crypto space, however very rarely are those in authority the ones being exploited.
In a recent case involving the DEA however, things took a change, as it’s been revealed that the enforcement agency accidentally sent $50,000 worth of USDT Tether ($USDT) to an opportunist scammer.
BREAKING:
— Whale (@WhaleChart) August 24, 2023
The United States Drug Enforcement Administration (DEA) accidentally sent $50,000 of seized crypto to a scammer.
A Conniving Crypto Scam
The scam’s narrative began three-years back, when the DEA first began investigating a crypto-fuelled money laundering and drugs operation.
Being successful on this occasion, the organisation was able to seize $500,000 worth of USDT from the culprits back in May. These funds were then funnelled to DEA-controlled crypto accounts that used a Trezor hardware wallet as storage (which was kept in a secure storage facility).
In the meantime- and probably with knowledge of the seized assets- a pesky scammer had been tracking the DEA’s blockchain activity, and therefore noticed when it had sent a test transaction (worth $45.36 in USDT) to the US Marshals Service. Such procedure was done as part of the standard forfeiture process.
In what we can assume was nothing more than a hopeful attempt to dupe the DEA, the scammer then created a custom crypto address that matched the first five and last four characters of those of the Marshals account.
To eventually catch the DEA hook, line, and sinker, the scammer then airdropped a token to its wallet. This was done in an effort to appear like the rightful wallet had been the recipient of the funds, and that they could use this address for future transactions.
With the scammer’s wallet matching the beginning and end sequences of the US Marshals Service’s, the DEA then made the almighty mistake of assuming that they were the same. In turn, it proceeded to send the wallet $50,000 worth of USDT via a single transaction.
Taking From One Criminal and Giving to Another
Once both the DEA and Marshals Service had realised there had been a mishap, an attempt was made to freeze the scammer’s wallet… however Tether operators could do nothing, as the money had already been withdrawn.
Through working alongside the FBI, the DEA discovered that the scammer had converted the USDT into Ethereum ($ETH), before moving it to a different wallet. Predictably, the second wallet was also governed by an anonymous user, meaning the only evidence the FBI- now leading the case- has to work with are the KYC details of two associated Binance accounts.
Such details are said to be as little as two gmail accounts, meaning there’s perhaps a high likelihood that the scammer (or perhaps scammers) will get off scot-free.
In addition, data from Etherscan showed the scammer(s) in question had received over $425,000 in crypto since June, with the wallet currently holding almost $40,000 worth of ETH. For the remaining $385,000, the majority of this had been dispersed across seven other wallets.
In conclusion then, this case is a reminder that even those in absolute authority can fall victim to the space’s wild-west ways.
However, in making things even worse, it also demonstrates how crypto scams don’t necessarily have to be thorough operations that require a lot of technical know-how, as instead, they can simply be opportunist attempts to bypass a user’s due diligence.
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This article is intended for educational purposes and is not financial advice
