DOJ busy with cryptocurrency-related crimes

Cryptocurrency fraud is keeping the Department of Justice busy these days.  Here are two press releases in my inbox today:

Two Estonian citizens arrested in $575 million cryptocurrency fraud and money laundering scheme (Western District of Washington):

Seattle – Two Estonian citizens were arrested in Tallinn, Estonia November 20, 2022, on an 18-count indictment charging conspiracy, wire fraud, and conspiracy to commit money laundering. The indictment was returned by a grand jury sitting in the Western District of Washington on October 27 and unsealed today following the arrests.

According to the indictment, Sergei Potapenko and Ivan Turõgin, both 37, are alleged to have induced hundreds of thousands of victims to purchase contracts in a cryptocurrency mining service called HashFlare and to invest in a virtual currency bank called Polybius Bank. Victims paid more than $575 million to the defendants’ companies. The defendants then used shell companies to launder the fraud proceeds and to purchase real estate and luxury cars.

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Court Authorizes the Seizure of Domains Used in Furtherance of a Cryptocurrency “Pig Butchering” Scheme (Eastern District of Virginia):

ALEXANDRIA, Va. – The U.S. Attorney’s Office for the Eastern District of Virginia announced today the seizure of seven domain names used in a recent cryptocurrency confidence crime, known as “pig butchering.”

In pig butchering schemes, scammers encounter victims on dating apps, social media websites, or even random texts masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims are then directed to other members of the scam syndicate running fraudulent cryptocurrency investment platforms, where victims are persuaded to invest money. Once the money is sent to the fake investment app, the scammer vanishes, taking all the money with them, often resulting in significant losses for the victim. And that is exactly what happened in this instance.

According to court records, from at least May through August 2022, scammers induced five victims in the United States by using the seven seized domains, which were all spoofed domains of the Singapore International Monetary Exchange.

Read more (opens externally).

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