US institutions are working on specific crimes committed by crypto scammers, even though necessary steps have not been taken regarding cryptocurrency regulations. There is no need for legal regulation for theft, and operations are being organized for crypto scammers within the scope of crimes committed over the internet. Today, the FBI announced its latest operation.
US Attorney Damian Williams announced today that three individuals attempted to defraud banks in the New York area by over $10 million and convert it into crypto. According to law enforcement, Zhong Shi Gao, Naifeng Xu, and Fei Jiang stole nearly $10 million from approximately a dozen financial institutions in the New York metropolitan area. The perpetrators of the crimes committed between 2018 and 2022 were arrested today.
Williams’ statement included the following:
“These charges should serve as a warning to fraudsters and cybercriminals who think they can turn to cryptocurrency to hide their identities. Our agencies will find you and hold you accountable for your crimes.”
So how did they commit the fraud? The announcement from the Department of Justice states the following:
“GAO, XU, JIANG, and other members of the network would recruit others to open bank accounts at various bank branches in the New York metropolitan area and elsewhere. The control of these bank accounts would then be handed over to GAO, XU, JIANG, and other members of the network.
Secondly, GAO, XU, JIANG, and other members of the network would arrange for funds to be deposited and transferred between bank accounts controlled by members of the network. They would then cause the banks to be presented with false reports claiming that these bank transfers were unauthorized.
This resulted in the banks – both the sending and receiving banks of the wire transfers – temporarily crediting the accounts with the amount of funds transferred. GAO, XU, JIANG, and the other criminals would thus double their balances.
Finally, GAO, XU, JIANG, and other members of the network would arrange for the deposited funds to be quickly withdrawn in cash or converted into cryptocurrency and transferred to foreign cryptocurrency exchanges before the banks realized that the unauthorized transfer reports were fraudulent.
This left the bank accounts of GAO, XU, JIANG, and other members of the network with negative balances while allowing them to withdraw nearly twice the amount of funds initially deposited.”
100 Years Imprisonment
In the US Southern District of New York, the three fraudsters are facing a total of 4 charges. If they are convicted on all charges, they will face a maximum sentence of 100 years in prison. However, despite such major operations, the increase in crimes related to cryptocurrencies continues.
In terms of transparency, it is a fact that cryptocurrencies facilitate the work of law enforcement agencies. When any wallet interacts with centralized exchanges, the mandatory KYC rules allow the identities of attackers to be identified. When on-chain traceable movements are combined with blockchain intelligence, today’s criminals should be very concerned about being caught in the future.
