US charges two Russians with defrauding millions in cryptocurrency scam - AML Intelligence
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US charges two Russians with defrauding millions in cryptocurrency scam

By Dan Byrne

Two Russian nationals have been charged with cryptocurrency exchange fraud in the United States, costing victims more than $16.8 million.

Danil Potekhin and Dmitrii Karasavidi, both from the Russian federation, were handed three charges – aggravated identity theft, conspiracy to commit computer fraud, and conspiracy to commit money laundering – at a District Court in San Francisco, the Wall Street Journal reports.

The two men are alleged to have scammed large sums from unsuspecting cryptocurrency users through online deception, and then laundered their profits into an account held by Mr Karasavidi.

They first created fake web domains for exchanges on multiple cryptocurrency sites to fool legitimate customers into revealing their login credentials, authorities said.

They then circumvented the cryptocurrencies’ internal exchange regulations in various ways to steal money from the victims. One instance saw them invest in a cheap cryptocurrency to increase its price and then immediately sell it to generate profit.  

The DoJ has seized more than $6 million in cash from the accused, as well as digital currency worth a further several million.  The cryptocurrencies involved were Poloniex, Gemini and Binance, authorities said.

A statement from Binance’s security team said that they halted withdrawals from the involved accounts when their risk-management system picked up on the odd transactions.

It advised that Binance had been working closely with the US Secret Service throughout the investigation to determine who was involved in the scam.

Northern California district attorney David Anderson warned that the US would prosecute anybody found to have committed internet fraud against an American citizen, regardless of where that fraud originate from.

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