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Shiba Inu: FBI Wallet Linked to SHIB and 4 Other Altcoins Exposed

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  • Wallet Activity: Over 100 transactions linked to FBI-associated wallets.
  • Token Holdings: BONE, eMax, KISHU, SANSHU, and other small-cap altcoins.
  • Exchange Usage: Binance, HTX, and other platforms have seen activity from the wallet.

Shiba Inu has surfaced in a surprising disclosure by Conor Grogan, Coinbase’s head of product business operations. Grogan revealed that the Federal Bureau of Investigation (FBI) may have unintentionally exposed one of its cryptocurrency wallets. Shockingly, the wallet contains Bone ShibaSwap (BONE), a central token in the Shiba Inu ecosystem, along with several other prominent altcoins.

Grogan’s discovery has shaken the crypto community. The FBI’s wallet, according to the Coinbase executive, doesn’t just contain Shiba Inu’s BONE. It also holds EthereumMax (eMax), Kishu Inu (KISHU), Sanshu Inu (SANSHU), and other altcoins, raising eyebrows about the agency’s crypto activity.

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Source

But it doesn’t stop there. The wallet in question was seeded by another crypto wallet that, according to Grogan, was responsible for deploying multiple wallets and executing a series of trades across various platforms. These include major crypto exchanges like Binance and HTX.

This comes on the heels of another major move by the FBI. Recently, the agency launched a sting operation aimed at catching crypto fraudsters in the act. The FBI created a fake cryptocurrency called “NexFundAI,” using it to lure a market maker into offering illegal market manipulation services. ZM Quant, a company now facing federal fraud charges, was drawn into the trap. They provided undercover agents advice on how to artificially boost the price of the fraudulent token.

Grogan isn’t sure if the FBI is aware that it may have doxxed its wallets. This uncertainty leaves the crypto community speculating on whether the bureau could be holding these tokens for investigations or had simply made an error.

Bigger than Shiba Inu: Crypto Crime & Losses

In a broader context, the FBI’s involvement in crypto comes at a time when fraud and scams are at an all-time high. In 2023 alone, Americans faced staggering losses of $5.6 billion due to crypto-related scams. Adding to the concerns, the agency has recently issued a warning about the rise of “pig butchering” scams, a growing type of crypto fraud targeting vulnerable investors.

In 2023, crypto-related scams led to staggering losses totaling $5.6 billion. The FBI has raised alarms about the growing trend of “pig butchering” fraud, warning investors to stay vigilant as these schemes continue to rise.

The FBI’s move into crypto is making waves. Whether intentional or not, its presence in the space adds another layer to the complexities of the cryptocurrency market. With wallets exposed and fraudsters under fire, it’s clear that cryptocurrency like Shiba Inu remains a wild frontier, even for national security agencies.

SEC Charges 12 in Major Crypto Market Manipulation Case

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  • The SEC charged three so-called market makers in the crypto space and nine individuals for fraud and market manipulation.
  • The investigation involved the Justice Department and FBI, which revealed the deceptive practices used to manipulate the market.
  • The SEC seeks permanent injunctions, financial penalties, and officer bans for those involved.

In one of the largest crackdowns, the SEC charged three market makers and nine individuals involved in the crypto industry for market manipulation. The SEC filed accusations in the District Court of Massachusetts, citing the defendants as running fraud schemes to deceive retail investors.

While working with the FBI and the Department of Justice, the SEC’s investigation exposes how the crypto assets have been deliberately manipulated to appear very active in trading, especially to attract investors.

According to the SEC, crypto promoters Russell Armand and Maxwell Hernandez employed firms such as ZM Quant and Gotbit to artificially inflate the trading volume of certain cryptocurrency assets. This, according to the regulators, is a scamming technique that misled investors that the assets were in active trading when, in actual sense, such trading had actually been faked.

Market Makers Accused of Artificial Trading

The “wash trading,” in which the same parties simultaneously buy and sell assets to create fake volume, was the centerpiece of these diverse schemes of market manipulation. ZM Quant, Gotbit, and CLS Global allegedly used bots to conduct billions of artificial trades every day, further distorting market activity.

This case only scratches the surface of many concerns about how easily crypto markets can be manipulated-with market makers making money at the expense of unsuspecting retail investors. Sanjay Wadhwa, Deputy Director of the SEC’s Division of Enforcement, said:

With purported promoters and self-anointed market makers teaming up to target the investing public with false promises of profits in the crypto markets, investors should be mindful that the deck may be stacked against them.

SEC Seeks Strong Legal Action

The SEC has filed the complaint for five violations of anti-fraud and market manipulation laws. It seeks a permanent injunction against all defendants’ financial penalties, and bars against certain individuals serving as officers or directors. Some of them have agreed to the settlement of the case by consenting to comply with the regulations of SEC pending court approval.

Armand and Hernandez are among those who have agreed to this. However, the case does epitomize increased regulatory focus on the crypto market in a bid to ensure no more manipulation occurs and that investors are protected from fraud.

Related Reading | XRP Consolidation: Will Key Support Level Trigger The Next Big Move?

FBI Warns Crypto Firms of Rising North Korean Social Engineering Attacks

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North Korеа posеs а rеnеwеd thrеаt to thе cryptocurrеncy industry, аccording to а rеcеnt wаrning from thе US Fеdеrаl Burеаu of Invеstigаtion (FBI). On Sеptеmbеr 3rd, thе FBI highlightеd “complеx аnd еlаborаtе” sociаl еnginееring schеmеs tаrgеting еmployееs in dеcеntrаlizеd finаncе (DеFi) аnd cryptocurrеncy compаniеs.

Thе аdvisory outlinеs how North Korеаn cybеrcriminаls аrе using thorough tаctics to stеаl digital аssеts. Thеsе mеthods involvе comprеhеnsivе rеsеаrch bеforе lаunching аttаcks, аllowing pеrpеtrаtors to pinpoint аnd focus on spеcific individuаls in thе DеFi аnd crypto sеctors. Sociаl mеdiа plаtforms sеrvе аs cruciаl sourcеs whеrе аttаckеrs collеct informаtion on potеntiаl victims’ profеssionаl historiеs аnd intеrеsts.

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Source: FBI

Oncе а tаrgеt is idеntifiеd, thе аttаck progrеssеs with а cаrеfully constructеd sociаl еnginееring strаtеgy. Attаckеrs crеаtе bеliеvаblе scеnаrios tаilorеd to еxploit thе victim’s pеrsonаl informаtion аnd cаrееr goаls. By building а rаpport аnd gаining thе victim’s trust ovеr timе, thеsе аttаckеrs lеаd victims to unwittingly downloаd mаlwаrе or еngаgе in аctions thаt jеopаrdizе thеir systеms. Thе FBI notеs thаt thе аttаckеrs аrе proficiеnt in English аnd possеss а dееp undеrstаnding of cryptocurrеncy, еnhаncing thеir dеcеitful tаctics.

Impеrsonаtion is аnothеr kеy tаctic usеd by North Korеаn cybеrcriminаls. Thеsе аttаckеrs oftеn posе аs known contаcts or rеputаblе figurеs in thе tеchnology аnd cryptocurrеncy sеctors. Thе FBI hаs rеportеd thаt thеsе criminаls usе stolеn sociаl mеdiа photos аnd crеаtе convincing fаkе wеbsitеs to аppеаr crеdiblе. This strаtеgy mislеаds victims into tаking risky аctions.

Cybersecurity Measures for Cryptocurrencies

To hеlp idеntify thеsе dеcеptivе prаcticеs, thе FBI providеs sеvеrаl wаrning signs. Thеsе includе unsolicitеd rеquеsts to run unfаmiliаr codе or downloаd unknown аpps, unеxpеctеd job offеrs with unrеаlistic pаy аnd unusuаl invеstmеnt opportunitiеs. Businеssеs should аlso bе cаutious if profеssionаl discussions аrе movеd to lеss sеcurе plаtforms or if custom softwаrе is usеd for simplе tаsks.

This wаrning comеs in thе wаkе of numеrous succеssful cybеrаttаcks by North Korеа tаrgеting cryptocurrеncy аssеts. Sincе 2017, it is еstimаtеd thаt North Korеаn hаckеrs hаvе stolеn аbout $3 billion in cryptocurrеncy through sociаl еnginееring tаctics. Thе Lаzаrus Group, а notorious hаcking collеctivе аssociаtеd with North Korеа, is bеliеvеd to bе bеhind mаny of thеsе аttаcks.

Thе FBI’s аdvisory undеrscorеs thе importаncе of cybеrsеcurity in thе cryptocurrеncy sеctor. Compаniеs аrе аdvisеd to rеmаin vigilаnt аgаinst unеxpеctеd communicаtions аnd to implеmеnt strong sеcurity mеаsurеs to protеct sеnsitivе dаtа аnd dеfеnd аgаinst thеsе sophisticаtеd sociаl еnginееring schеmеs.

Related Readings | Ripple’s Partnership with Futurеvеrsе Spurs XRP’s 12% Surge

Tether Faces Seizure & Burn In Unprecedented Legal Twist

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Tether has come under intense scrutiny from regulators, but beneath the public eye lies a notable FBI investigation involving a fraudulent scheme. The Federal Agency is currently pursuing a case where criminals masquerade as employees of major tech corporations like Microsoft or Apple and the victim’s bank, convincing the latter that they are targets of a hacking incident. Jayna Kadel, a Special Agent at the Federal Bureau of Investigation, has applied for a combined criminal and civil forfeiture seizure warrant for the blacklisted assets allegedly siphoned by the hackers from the victims, including USDT.

In her submission, Kadel argues that the assets in question are likely the proceeds of wire fraud offenses and were involved in money laundering activities. The cryptocurrency amounts associated with these assets are believed to be linked to a wire fraud scheme and were transferred in small batches through intermediary addresses, possibly indicating an attempt to launder the proceeds through these addresses for concealment.

Acknowledging Tether’s cooperation in freezing or blacklisting the USDT tied to the subject assets, Kadel emphasizes the need for the seizure warrant. However, crypto enthusiasts have raised concerns about the unprecedented nature of the legal action, as the FBI aims not merely to freeze but to initiate a burn-and-reissue strategy for Tether held in an Externally Owned Account [EOA].

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Tether Faces Seizure & Burn In Unprecedented Legal Twist 4

This move has ruffled a few vigilant crypto communities, marking the first instance where law enforcement seeks to incinerate blacklisted funds directly on the Ethereum blockchain. The unique legal approach has sparked debates among experts, questioning its implications for decentralized finance and the broader crypto ecosystem.

Tether and Regulators’ Evolving Dynamics

Addressing the legal intricacies, they highlighted the unusual justification for seizing USDT due to flight risk and the government’s preference for Tether reminting to its address. Another user slammed the aggressive nature of forcing a payout compared to traditional finance’s approach of freezing foreign bank accounts.

This ongoing discussion reveals the shifting dynamics between regulators and the crypto industry. The outcome of this case could set the ball rolling for future engagements, emphasizing the need for continued vigilance and adaptation within the crypto community.

ZachXBT Reveals $13.3M Crypto Heist Via 54 SIM Swap

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ZachXBT, known as a detective for cryptocurrency transactions, has uncovered a series of digital thefts that have shocked the crypto community. In just four months, a massive $13.3 million has been boldly taken by hackers who tricked their way through 54 cases of SIM card swapping. These focused attacks have seriously shaken up the safety of people who own cryptocurrencies.

ZachXBT, renowned for uncovering crypto scams, has brought the concerning information to light. The approach is both malicious and triumphant: hackers capitalize on account vulnerabilities, rapidly immersing victims in a manufactured state of urgency. This compels victims to believe their assets will vanish, coercing hasty and anxious actions.

To thwart such insidious attacks, ZachXBT issues a solemn warning against using SMS two-factor authentication. Instead, he champions the utilization of foolproof security measures like authenticator applications and security keys. Vigilance in safeguarding accounts has become paramount in the face of mounting threats.

Delving into the patterns that underscore these 54 SIM swaps, ZachXBT sheds light on the disturbing geographical concentration of victims. A vast majority find themselves entangled within the United States, their vulnerability exploited by cunning hackers. Noteworthy carriers like T-Mobile, Verizon, and AT&T are unwittingly implicated in facilitating these breaches.

John Deaton’s Response to ZachXBT’s Tweet

John Deaton, a prominent figure in the crypto legal domain and the visionary behind Crypto Law, highlights the immense seriousness of this circumstance. Furthermore, Deaton’s personal experience with a SIM swap attack in March underscores these cybercriminals’ alarming level of expertise. Their adeptness in assuming false identities and manipulating situations is remarkably persuasive.

The narrative gains traction as Deaton recounts the treacherous path that led to his account freeze on Uphold, a prominent digital wallet and trading platform. The attacker’s calculated maneuver involved a duplicitous call after a seemingly innocent verification email. The attacker, masquerading as “Uphold Verification,” cunningly coerced Deaton into divulging sensitive information.

The mechanics behind these SIM swap attacks are elucidated by law enforcement. The FBI has outlined the intricate process by which these criminals “socially engineer” customer service representatives of mobile carriers, ensuring a seamless switch of the victim’s phone number to a SIM card under the attacker’s control. This sinister shift grants unrestricted access to confidential codes and texts, providing a direct gateway into victims’ financial coffers.

The crypto realm is now left grappling with the problem of how to fortify its defenses against a rapidly evolving breed of cybercriminals. As the shockwaves of ZachXBT’s revelations reverberate, stakeholders must reevaluate their security protocols and brace for a new wave of digital onslaughts.

Related Reading:| Tennessee’s Crypto Scam: Blessings Turned To Sham

Kraken Boss Jesse Powell Now Has the FBI Knocking At His Door

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Kraken’s co-founder Jesse Powell became a person of interest as the FBI [Federal Bureau of Investigation] searched his Brentwood residence in Los Angeles’ Westside, seizing electronic devices. 

On July 6, The New York Times reported that Powell is under investigation for alleged hacking and cyberstalking of a non-profit that he founded.

FBI and the U.S. Attorney’s office for the Northern District of California launched the criminal investigation following Verge Center for Art’s allegations that the former Kraken CEO interfered with its computer accounts, preventing access to emails and other information, the report stated quoting three unnamed individuals.

Powell, according to the prosecutors, has been on their radar since last September. He hasn’t yet been charged with any offenses, though.

In a statement provided by his lawyer Brandon Fox, Verge “provided a one-sided account that did not provide the government with the full picture, showing that Powell “did nothing wrong.”

Adding that the matter is not related to “Mr. Powell’s employment or his conduct in the cryptocurrency arena.”

Mr. Fox said the investigation was focused on the allegations by the arts group, Verge Center for the Arts, and “in no way related to Mr. Powell’s employment or his conduct in the cryptocurrency arena.” He also said Mr. Powell “did nothing wrong.”

A Kraken official confirmed the same, stating that the Verge investigation had nothing to do with the trading company and that Kraken had no reason to suspect that law enforcement was looking into any other potential problems.

Kraken’s Showdown With The IRS and SEC

The US cryptocurrency exchange suffered a severe setback when a federal judge decided that it must turn up customers’ account and transaction data in response to a petition filed by the Internal Revenue Service [IR]) earlier this year.

The IRS wanted the data to look into potential tax underreporting by Kraken users. The court’s outcome was viewed as a kind of model for future proceedings by tax authorities looking to find unreported tax liabilities among cryptocurrency users.

Several months back, Kraken found itself in the eye of a regulatory maelstrom after striking a settlement with the U.S. Securities and Exchange Commission in February that required it to pay $30 million and stop providing staking services to clients in the United States.

Former FTX Legal Head Reportedly Assists U.S. Prosecutors In Investigation: Report

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Daniel Friedberg, the former head of FTX’s legal department, has reportedly provided assistance to U.S. prosecutors in their investigation into the failure of the cryptocurrency firm, as reported by Reuters, citing a source familiar with the situation told.

According to a source, Daniel Friedberg met with U.S. prosecutors on November 22nd to provide information about the cryptocurrency firm. Officials from the Justice Department, the FBI, and the SEC attended the meeting, which was conducted at the Southern District of New York’s U.S. Attorney’s office.

Friedberg received a call from two FBI agents on November 14th, following FTX’s bankruptcy filing on November 11th. He told the agents he was willing to share information with them but needed FTX to waive his attorney-client privilege. 

He requested the waiver in a letter to FTX the following day, but FTX did not grant the request. However, the company did agree on the points that he could disclose to investigators, according to a source and emails viewed by Reuters.

He then informed the FBI agents of his willingness to cooperate in all respects. The U.S. Attorney’s Office arranged a meeting where Friedberg signed proffer letters, which typically outline a potential agreement between authorities and individuals involved in an investigation.

Friedberg discussed Sam Bankman-Fried’s alleged use of customer funds to finance his business empire and provided information on how Bankman-Fried’s hedge fund, Alameda Research, operated. 

His involvement in the matter has not been previously disclosed. When contacted for comment on his cooperation, Friedberg, the FBI, and FTX did not respond to Reuters.

FTX Ex-CEO Pleads Not Guilty

Last month, Manhattan U.S. Attorney Damian Williams, who is in charge of the criminal case against the now-bankrupt FTX, told SBF that if he had been involved in any misconduct at the exchange or Alameda, it would be in his best interest to confess before it is too late.

But, As TronWeekly reported on January 4th, In Manhattan federal court in New York, SBF denied the accusations, and “the judge in the case set a trial date of October 2nd.”

Whereas Gary Wang, the former chief technology officer of FTX, and Caroline Ellison, the former CEO of Alameda, two of his closest allies, both admitted to fraud and agreed to collaborate.

Nevertheless, Friedberg is expected to be called as a witness in Bankman-Fried’s October trial, during which SBF will face accusations of diverting billions of dollars in FTX of client funds to Alameda for personal use.

Related Reading |  A Stablecoin Version of the Hong Kong Dollar May Soon Be Available On DeFi Platforms

Crypto Fraudsters Have Now Crept Into LinkedIn; One User Lost $288K

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Scammers are now infiltrating leading job portals LinkedIn and targeting users through cryptocurrency investment schemes. In a recent interview FBI’s special agent Sean Ragan called it a “significant threat” to the platform and consumers.

Fraudsters usually get in touch with victims by posing as a professional, luring the user with attractive returns through a crypto investment. They then steer the latter to drop funds in a site controlled by them. And the funds are promptly drained from the account.

One Florida native Mei Mei Soe revealed how she lost her entire life savings to the tune of $288,000 to a scammer on LinkedIn. “It began with the person asking me if I’m on LinkedIn for professional networking or if I’m looking for a job,” Soe said.

The conversation eventually shifted to investment, Soe continued. “He showed me how he’s profiting from his investments and told me I should start investing with crypto.com which I know is a legitimate website. I started with $400.”

The fraudster directed her to move her holdings to a site he controlled. Over the course of several months, Soe made a total of nine transactions. Soon, she found out that the person isn’t the one he claims to be. And before she could do anything, Soe lost all of her funds.

Crypto Scammers Often Use Social Media As Their Launchpad

Acknowledging that there has been a rise in fraud cases on its platform, LinkedIn released a statement,

“We work every day to keep our members safe, and this includes investing in automated and manual defenses to detect and address fake accounts, false information, and suspected fraud. If a member encounters or is the victim of a scam we ask that they report it to us and to local law enforcement.”

Crypto.com said it immediately takes down accounts that it finds are linked to a scam.

According to research conducted by US Federal Trade Commission on June 3, scammers took away $1 billion in cryptocurrency last year, an increase of more than five times from 2020 and over a sixty-fold jump from 2018.

The majority of these attacks exploited social media platforms, TronWeekly reported.

FBI plans to form a new team dedicated to cryptocurrency

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According to the Department of Justice, the FBI is developing a new squad dedicated to cryptocurrencies (DOJ). The Department of Justice stated Thursday that the new squad would collaborate closely with the National Cryptocurrency Enforcement Team.

The National Cryptocurrency Enforcement Team’s first director will be prosecutor Eun Young Choi, who has a history in cyber-related offenses.

“The department has been at the forefront of investigating and prosecuting crimes involving digital currencies since their inception,” said Director Choi. “The NCET will play a pivotal role in ensuring that as the technology surrounding digital assets grows and evolves, the department in turn accelerates and expands its efforts to combat their illicit abuse by criminals of all kinds. I am excited to lead the NCET’s incredible and talented team of attorneys and to get to work on this critical priority for the department.

Choi will resume her full-time duties on Thursday.

FBI’s decision to control rising crypto crimes

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division stated that criminals had increased their illicit use with the rapid innovation of digital assets and distributed ledger technologies. They use them to fund cyberattacks, ransomware, and extortion operations, as well as to trade in drugs, hacking tools, and illicit items online, perpetrate thefts and frauds, and launder the proceeds of their crimes, according to him.

He mentioned that NCET would be the focal point for the department’s efforts to combat the rise in technology-related crime.

The enforcement team will concentrate on the problems that arise from the illicit usage of cryptocurrencies and digital assets. The group will also include prosecutors with expertise in cryptocurrencies, cybercrime, money laundering, and forfeiture from throughout the agency.

The squad will collaborate with others throughout the department, along with the FBI’s new cryptocurrency task force.

The FBI’s new unit will be comprised of crypto professionals who will aid the bureau with analysis, support, and training. According to the department, the team will also reinvent its cryptocurrency technologies to remain ahead of new threats.

With the growing popularity of crypto, crimes are also on the rise. A dedicated team to investigate cryptocurrency crimes ensure that the culprits will be caught on time and also it will help to reduce the crimes from happening.

FBI traced embezzled $150 million to Bitcoin

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FBI’s investigation of the theft of the $150 million from a subsidiary of Tokyo-based Sony Group Corporation has been traced to Bitcoin(BTC).

The Department of Justice(DoJ), US Attorney’s Office, Southern District of California issued a press release on 20 December 2021 stating that Rei Ishii, an emplyee of Sony LIfe Insurance Company Ltd., allegedly embezzled the $154 million when the company attempted to transfer funds between its financial accounts.

After acquiring certain insurance companies, Sony Life was to transfer funds from its Citibank account in Bermuda to its Japanese accounts.

Ishii managed to embezzle these funds by distorting the transaction instructions, which caused the funds to transfer into an account controlled by him at the Silvergate bank in La Jolla, California. the money from these funds was immediately used to buy 3,879 Bitcoins on Coinbase. He tried to cloak this theft by transferring the bought Bitcoins into a hardware wallet, in an attempt to ensure that the essence and ownership of the funds were unknown.

Like stealing wasn’t bad enough, Ishii tried to coerce Sony Life into an arrangement. He asserted that it would not be possible for the company to recover any part of the stolen money. Ishii even alleged that the company would go down with him if they filed criminal charges against him.

However, the FBI tracked down the funds and seized them on 1 December 2021. The stolen money in the form of Bitcoins was then transferred to the FBI San Diego’s Bitcoin wallet.

Stolen money accounts to $180 million in Bitcoin cryptocurrency: FBI

Acting U.S. Attorney Randy Grossman said, “It is our intent to return the stolen money to the victim of this audacious theft, and today’s action helps us do that.” He further went on to thank the prosecution team, the FBI, and Japanese authorities for their impeccable work on the case.

FBI Special Agent in Charge Suzanne Turner said,

“The FBI was able to recover these stolen funds for two very important reasons, first, Sony and Citibank immediately contacted and cooperated with law enforcement as soon as the theft was detected, and the FBI worked in partnership with both to locate the funds. Second, the FBI’s footprint internationally through our Legal Attaché offices and the pre-existing relationships we have established in foreign countries – in this instance with Japan – enabled law enforcement to coordinate and identify the subject. The FBI’s technical expertise was able to trace the money to the subject’s crypto wallet and seize those funds.”

All the Bitcoins that are worth $180 million, traceable to the theft, have been recovered and fully preserved, according to the press release.