The United States Drug Enforcement Administration (DEA), the agency responsible for enforcing U.S. drug laws, has reportedly lost $55,000 worth of Tether (USDT) that was seized earlier this year due to the actions of a scammer.
According to information published by Forbes on August 24th, this agency had seized over $500,000 worth of USDT from two Binance accounts that they suspected were involved in money laundering from drug sales as part of a years-long investigation.
Specifically, details from the search warrant revealed that this money was placed in a Trezor cryptocurrency wallet controlled by the DEA and securely stored. As part of the standard seizure process, the DEA sent a test transaction of over 45 USDT to the United States Marshals Service.
However, a hacker discovered the transaction and executed a “address poisoning” scam to steal the money. They did this by setting up a cryptocurrency wallet with the same first five characters and last four characters as the Marshals’ account.
The scammer then airdropped a token into the DEA’s wallet to make the fake address appear as a recent transaction. This tricked the owner into transferring money to the fake address. By the time the authorities noticed the transaction and alerted the DEA, it was already too late to freeze the funds.
Afterwards, the stolen USDT was converted into Ethereum and Bitcoin, and then transferred to various different cryptocurrency wallets.
Currently, the DEA is working in conjunction with the FBI to investigate the incident, but they have not yet been able to identify the attacker. All they have found so far is that two Binance accounts paid gas fees to the attacker’s wallet, and that the attacker used two Gmail email addresses for registration. The DEA’s only hope now is that Google will have information about the account owner that could lead them to the identity of the hacker.