U.S Prosecutors Charge Hackers in $11M Crypto Scheme

Jimmy Aki
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U.S. prosecutors have charged five individuals accused of participating in a crypto scheme that allegedly stole $11 million from businesses and individuals. The group targeted 45 companies in the United States, Canada, India, and the United Kingdom from September 2021 to April 2023.

Hackers Face Charges in $11M Crypto Scheme

According to the California US Attorney’s Office on November 20, the defendants linked to the Scattered Spider hacking group reportedly used sophisticated phishing and SIM-swapping methods to gain unauthorized access to crypto wallets and sensitive data.

Their methods included sending fake SMS messages with phishing links and tricking victims into sharing login credentials. Once accessed, hackers drained cryptocurrency wallets and compromised company systems.

Court documents identified at least 29 victims, with one person losing over $6.3 million in cryptocurrency. Prosecutors allege that the group also stole intellectual property worth millions of dollars and personal information from hundreds of thousands of individuals.

The defendants – Ahmed Elbadawy (23), Noah Urban (20), Evans Osiebo (20), Joel Evans (25), and Tyler Buchanan (22) – face charges of conspiracy, wire fraud, and aggravated identity theft.

Prosecutors said Buchanan, a resident of Scotland, faces an additional wire fraud charge. If convicted, the fraud-related charges alone could lead to sentences of up to 20 years in prison.

The Federal Bureau of Investigation (FBI) and Police Scotland tracked Buchanan using details from phishing websites registered in his name. Evidence found on his devices included data from a US-based crypto exchange and a telecom company.

Martin Estrada, the U.S. Attorney in Los Angeles, said, “We allege that this group of cybercriminals perpetrated a sophisticated scheme to steal intellectual property and proprietary information worth tens of millions of dollars and steal personal information belonging to hundreds of thousands of individuals.”

Growing Threat of Cybercriminals

This case underscores the increasing threat posed by cybercriminals like Scattered Spider, who exploit digital and telecom systems vulnerabilities.

SIM-swapping, a method used to hijack phone numbers, has become a popular tool for hackers targeting crypto wallets and accounts.

Investigators have also uncovered connections between the Scattered Spider hacking group and a broader network of crypto scams.

A recent case linked them to the fake Rabby Wallet app, which deceived users into entering their seed phrases, resulting in stolen funds. One victim reported losing $5,000, while others have suffered significant losses to the fraudulent app, which remained on the Apple App Store despite multiple user reports.

Similar schemes have been tied to a suspicious entity known as Konpyl, whose activities included draining $1.6 million through fake wallets.

Authorities have frozen several wallets linked to this entity, and investigations reveal ties to other cybercrime operations.

Authorities are intensifying their efforts to combat such crimes, as demonstrated by the collaboration between the FBI and international law enforcement agencies like Police Scotland.

The FBI has also issued a warning about unregistered cryptocurrency money transmitters, urging individuals to ensure that the services they use comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) laws.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.