(Ken Silva, Headline USA) The Drug Enforcement Administration was tricked earlier this year into giving a $50,000 of cryptocurrency to a scam artist posing as someone with the U.S. Marshals Service, according to a report from Forbes.
Citing an FBI search warrant it obtained, Forbes reported Thursday that the DEA seized in May over $500,000 in the dollar-linked cryptocurrency Tether from two Binance accounts it suspected were being used to funnel illegal narcotics proceeds. The funds were placed in DEA-controlled accounts, Forbes said.
Because the funds were cryptocurrency, an online scammer was able to watch the DEA’s movements on the blockchain—a decentralized ledger that records all the transactions of a given cryptocurrency.
According to Forbes, the scammer quickly set up a cryptocurrency address that matched the first five and last four characters of the Marshals account. The swindler tehn “airdropped” the fake address into the DEA’s account by dropping a token into the DEA account so it looked like the test payment made to the Marshals.
“The idea here was to basically trick the DEA into thinking the scammer’s address was actually the Marshal’s service’s address. Crypto addresses are so long that people usually just copy and paste instead of typing them fresh each time,” explained Forbes reporter Thomas Brewster.
“The scammer in the DEA case got lucky, as the agency sent just over $55,000 to the scammer in a single transaction,” Brewster said.
“When the Marshals noticed what happened and alerted the DEA, the latter contacted Tether operators to freeze the fake account so the scammer couldn’t withdraw the crypto. But Tether officials said the money had already gone.”
The FBI is now reportedly hot on the scammer’s trail.
Forbes said investigators haven’t identified the person, but they have found two Gmail accounts he used. They’re hoping Google will have more information on the crypto robber.
“Whoever is behind the hack, they’ve been shifting large sums of Ether in recent months,” Forbes added.
“A search on Etherscan Ethereum blockchain explorer showed the scammer’s wallet currently contained nearly $40,000 in the currency, but that it had received $425,000 since June. In the last three weeks, over $300,000 of that has been moved to seven different wallets.”
The DEA declined to comment, as did the FBI, which filed the warrant and is leading the investigation into the theft.
Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.