U.S. Regulation

Brooklyn Resident Charged With Stealing $16 Million in Crypto From Coinbase Users

Prosecutors in Brooklyn said on Friday that a 23-year-old resident, Ronald Spektor, was charged with stealing $16 million in cryptocy from approximately 100 Coinbase users. The individual, who went by “lolimfeelingevil” online, was allegedly behind a phishing and social engineering scheme. Pretending to be a Coinbase representative, Spektor would convince users to send cryptocy to accounts he controlled, prosecutors said.

Prosecutors said that Spektor motivated victims by claiming that their digital assets were at risk of being stolen by a hacker. He would then allegedly try to launder the digital assets using cryptocy mixers, swapping services, and crypto gambling websites. Spektor was arraigned on 31 charges on Friday, including first-degree grand larceny, first-degree money laundering, and participating in a scheme to defraud.

The Brooklyn District Attorney Office’s investigation, which has taken place over the past year, resulted in the seizure of around $105,000 in cash and roughly $400,000 in digital assets. Authorities are in the process of trying to secure more of the stolen assets, they said. Prosecutors said that Spektor “openly bragged about his heists” within a channel on messaging platform Telegram called “Blockchain enemies.” In recovered messages, Spektor allegedly said that he lost $6 million in cryptocy through gambling.

In a blog post, Coinbase said that it worked closely with the Brooklyn District Attorney’s Office and its Virtual Currency Unit. The company said it helped identify Spektor and victims, shared associated on-chain activity, and assisted with efforts to trace stolen funds. One of Spektor’s victims contacted the pseudonymous blockchain sleuth ZachXBT, who published an investigation last year into the alleged scammer. The individual that had approached ZachXBT said that they were bilked of $6 million.
Coinbase faced blowback this year for a data breach impacting nearly 70,000 users, which was disclosed in May. At the time, the company estimated $400 million in damages. The exchange said it acted quickly, reimbursed users affected by social engineering schemes using stolen information, and tightened vendor and insider controls. Spektor lives with his father in Sheepshead Bay, Brooklyn, according to the government. A judge set Spektor’s bail at $500,000, per ABC7 New York. The judge would not let Spektor’s father post bond, citing an inability to discern the source of the funds.
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