DEA Erroneously Transfers $55K in Crypto to a Scammer
- The DEA lost $55,000 in a crypto scam implemented using a method called “airdropping.”
- The agency had seized $500K worth of USDT from two Binance addresses earlier.
- The money was suspected to be a part of an illicit narcotics operation, as per an FBI search warrant.
- The scammer created a fake address with similar details as that of the US Marshals and duped the agency.
The Drug Enforcement Administration (DEA), a law enforcement agency under the United States Department of Justice (DoJ) that is responsible for bringing down the Silk Road marketplace, has made a mistake and sent close to $55,000 in cryptocurrency to a scammer. This blunder was a part of a tactic known as “airdropping.”
According to the series of events explained by Forbes, the DEA confirmed that it had seized around $500,000 worth of USDT, the largest stablecoin by market capitalization, from two Binance accounts that were suspected to be a part of an illicit narcotics operation. The FBI search warrant was also reviewed by Forbes, which confirmed the above details.
More importantly, the funds were stored by the DEA in a Trezor hardware wallet that was controlled by the law enforcement agency in a secure place. However, a scammer was observing the agency’s blockchain activities, and as a result, they mimicked a test transaction the DEA had made with the US Marshals Service, another law enforcement agency in the US.
It is also crucial to note that the scammer created a wallet with an address that closely resembled the one that the Marshals Service had. A crypto wallet address is generally very long, and therefore, it is a standard practice to check the first few and last few characters that the scammer had, which are the same as those of the federal agency. As a result, the Drug Enforcement Administration was tricked into sending money to the scammer.
The scammer used the method called “airdropping” and sent a small amount of USDT to the DEA so it matched the test transaction amount. They hoped that the agency would simply copy the address that sent them the small amount during the test transaction, which was a success. Airdropping is a legitimate cryptocurrency feature, but in the hands of a scammer, it turns into a weapon, as seen in this case.
As reported earlier by BitcoinWisdom, European regulators have set up crypto investigations to reduce the rate of cross-border crypto crimes such as hacks, rug pulls, and online scams. More than $1 billion was lost to crypto crimes in 2022, and EU law enforcement agents made it a priority to curb that trend.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
