Danil Potekhin, Conspiracy to Defraud Cryptocurrency Exchanges, California 2020

A federal grand jury indicted Russian nationals Danil Potekhin a/k/a cronuswar and Dmitrii Karasavidi a/k/a Dmitriy Karasvidi, charging them with a wide range of crimes in connection with an alleged conspiracy to defraud three cryptocurrency exchanges and their customers of cryptocurrency valued at the time of the theft and manipulation at a minimum of $16.8 million in cryptocurrency.

The Superseding Indictment, filed February 18, 2020, was unsealed earlier today. According to the Superseding Indictment, Potekhin, of Voronezh, Russia, created numerous web domains that mimicked those of legitimate virtual currency exchanges. This tactic used a combination of 'phishing' and 'spoofing' to exploit Internet users' trust in known companies and organizations to fraudulently obtain their login credentials, including email addresses, password information, and other personal information.

When unwitting customers accessed the fraudulent websites and entered their login information, Potekhin and his co-conspirators stole the victims' credentials and gained access to their cryptocurrency accounts, from which they stole funds or which they used to manipulate cryptocurrency markets for their own gain.

My warning to internet fraudsters is that we will prosecute internet frauds against U.S. citizens regardless of where those frauds originate, said U.S. Attorney David L. Anderson. My warning to the public is that digital currency exchanges are not like banks. The security of digital currency exchanges is only as good as your own vigilance. While law enforcement will do everything within our power to protect you, you must also protect yourself.

The Superseding Indictment describes similar attacks perpetrated against the customers of three cryptocurrency platforms, two of which are based in the United States, and one based abroad. Victims of the attacks are alleged to have included people residing in the Northern District of California.

The Superseding Indictment describes a number of complex fraud schemes used by the defendants and their co-conspirators to maximize the value of the cryptocurrency that they stole from the customers of these digital currency exchanges. The first fraud scheme, referred to as a theft attack in the Superseding Indictment, was a scheme to steal digital currency from as many users of a U.S.-based digital currency exchange as possible in a short amount of time.

Source: https://www.justice.gov/usao-ndca/pr/russian-nationals-indicted-conspiracy-defraud-multiple-cryptocurrency-exchanges-and