18 Sep 2020
The U.S. Justice Department charged two Russian nationals who prosecutors say defrauded three cryptocurrency exchanges and their customers, resulting in losses of at least $16.8 million.
Danil Potekhin and Dmitrii Karasavidi were charged in the U.S. District Court in San Francisco with aggravated identity theft, conspiracy to commit computer fraud and conspiracy to commit money laundering, among other charges, for their alleged roles in a sophisticated hacking and market-manipulation scheme, prosecutors said Wednesday.
The U.S. Treasury Department on Wednesday issued sanctions against Messrs. Potekhin and Karasavidi under an executive order targeting malicious cyber activities. The actions demonstrated the role that the U.S.’s anti-money-laundering and counterterrorism financing regime plays in deterring cybercrimes, the Treasury Department said.
The cryptocurrency exchanges targeted in the attack were Poloniex, Binance and Gemini, according to court documents. As the men sought to circumvent the exchanges’ compliance controls, they created a trail of evidence that helped investigators to identify them, according to the Treasury.
Binance’s security team said in a statement that it had worked closely with the U.S. Secret Service to help the agency identify the identities of those involved in the attack. Representatives for Poloniex and Gemini didn’t immediately return a request for comment. Efforts to reach Messrs. Potekhin and Karasavidi were unsuccessful.
Authorities allege that Messrs. Potekhin and Karasavidi swindled the cryptocurrency-exchange customers by creating web domains that mimicked those of the actual exchanges to gain the login credentials of their victims.
By Dylan Tokar, The Wall Street Journal, 16 September 2020
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