DEA Got Duped! The Agency Lost $55k to a Common Cryptocurrency Scam

DEA fell victim to a cryptocurrency scam. The agency transferred $55k in Tether seized in a drug money laundering investigation to a swindler's account.


Even the best ones are not invulnerable to crypto scams. After seizing cryptocurrency used for illegal activity, the Drug Enforcement Agency (DEA) ended up sending money to criminals, losing over $55k in Tether. The news was revealed by Forbes, whose journalists were made privy to the details of a search warrant related to a three-year investigation into drug money laundering.

The embarrassing blunder follows the May seizure of over $500,000 in Thether, a dollar-pegged stablecoin, from two Binance accounts, allegedly used by the criminals to funnel proceeds from the drug trade. DEA transferred the assets to a Trezor cold wallet placed in a secure facility. But crime never sleeps!

A scammer monitoring the blockchain got alerted when DEA performed a test transaction, sending $45.36 in Tether to the US Marshals Service as part of the standard forfeiture procedure. The swindler quickly concocted a cryptocurrency address that mirrored the initial five and final four characters of the Marshals' account.

Then, they "airdropped" the fake address into the DEA's account by transferring a token into the agency's account to make it look like a test payment and trick officers into perceiving a fraudulent address as legitimate. The scam tactic used to target DEA is common and has long been known as "address poisoning."

The crypto-savvy crook was lucky. DEA took the bait and sent $55,000 to the wrong address in a single transaction. After becoming aware of the botch, the agency rushed to contact Tether officials and demand the freezing of the fake account, but the money had already evaporated.

At press time, no comment from DEA is available. The FBI, which filed a warrant and launched the investigation into the matter, also declined to discuss the theft.