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Two individuals have been arrested in connection with a $243 million theft targeting a creditor of the now-defunct trading firm Genesis.
The arrests came after an investigation by blockchain researcher ZachXBT, who uncovered how the victim was deceived by a social engineering scam on August 19.
The fraudsters, posing as customer support agents for Gemini, orchestrated the theft by gaining access to the victim’s funds.
Blockchain investigator ZachXBT was instrumental in exposing the scheme, tracing the culprits’ activities across social media and blockchain networks.
The scam involved the theft of 4,064 Bitcoin, sparking efforts to recover the lost assets and shedding light on the growing risks in the cryptocurrency space.
1/ An investigation into how Greavys (Malone Iam), Wiz (Veer Chetal), and Box (Jeandiel Serrano) stole $243M from a single person last month in a highly sophisticated social engineering attack and my efforts which have helped lead to multiple arrests and millions frozen.
Fraudsters steal 4,064 Bitcoins
The criminals, identified as Malone Iam, Veer Chetal, and Jeandiel Serrano, moved the stolen 4,064 Bitcoins through various cryptocurrency exchanges, including Binance and Thorswap, in an attempt to cover their tracks.
They also converted the Bitcoins into other cryptocurrencies like Litecoin, Ethereum, and Monero to further obscure the funds.
The process made it increasingly difficult to trace the stolen assets.
However, the efforts of ZachXBT, in collaboration with CF Investigators and ZeroShadow, led to a partial breakthrough.
Around $9 million in assets were successfully frozen across several exchanges.
While this represents only a fraction of the total stolen, investigations are ongoing in the hopes of recovering the remaining funds.
In a brazen display of their ill-gotten gains, the scammers went on a luxury spending spree, flaunting their wealth in Los Angeles and Miami.
The group shared videos of expensive purchases, including luxury cars and wild parties at exclusive clubs.
These public celebrations shared on social media, played a key role in the investigation, providing investigators with valuable clues about their identities and whereabouts.
The fraudsters’ lavish lifestyle not only highlighted the scale of the scam but also reflected the growing audacity of criminals operating in the cryptocurrency space.
Their blatant flaunting of stolen assets ultimately led to further scrutiny by law enforcement and blockchain forensics teams.
Arrests made, one suspect still at large
On September 18, two of the fraudsters, Iam and Serrano, were arrested in Los Angeles.
The third suspect, Chetal, remains at large, with authorities actively pursuing leads to locate him.
Investigators are also looking into the possibility that additional funds were seized during the arrests, although no official amount has been confirmed.
The case remains open as law enforcement works to apprehend the remaining suspect and recover more of the stolen assets.
On-chain analysis suggests that further seizures may be possible, though much of the stolen crypto remains unaccounted for.
Latest blow to Genesis Global
This fraud is the latest blow to Genesis Global, a subsidiary of Digital Currency Group (DCG), which is already embroiled in financial difficulties.
Genesis owes $4 billion to more than 100,000 creditors, and its total liabilities stand at a staggering $10 billion.
The company was severely impacted by the collapse of major crypto giants FTX and Three Arrows Capital, both of which were linked to the failure of Do Kwon’s Terraform blockchain ecosystem.
The Genesis Global scam has only added to the lender’s growing financial strain, highlighting the vulnerabilities in the crypto lending market.
As the company struggles to navigate its liabilities, this incident underscores the importance of heightened security measures in the crypto industry.
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