DEA Loses $55,000 in Seized Cryptocurrency to Scammer

The United States Drug Enforcement Administration (DEA) has suffered a significant loss of $55,000 after falling victim to a cryptocurrency scam earlier this year. The agency, responsible for enforcing drug laws in the country, seized over $500,000 worth of Tether (USDT) from two Binance accounts suspected of money laundering in connection with drug sales.

Address Poisoning Scam

According to a search warrant seen by Forbes, the funds were stored securely in DEA-controlled Trezor crypto wallets. As part of the standard forfeiture process, a test amount of just over $45 worth of USDT was sent to the U.S. Marshals Service. However, an on-chain sleuth noticed the transaction and quickly set up a crypto wallet with a similar address to the Marshals' account, using a scam tactic known as "address poisoning."

The scammer then airdropped a token to the DEA's wallet, causing the spoofed address to appear as a recent transaction. This clever tactic deceived the DEA agent into accidentally transferring funds to the wrong address, resulting in a loss of $55,000.

Investigation Underway

Upon noticing the fraudulent activity, the Marshals alerted the DEA, who, in turn, requested Tether to freeze the funds. However, the USDT had already been swapped for Ether (ETH) and Bitcoin (BTC), and subsequently transferred to different crypto wallets, making recovery impossible at this stage.

The DEA, in collaboration with the FBI, is currently investigating the incident in an attempt to identify those responsible for the attack. So far, they have discovered two Binance accounts that paid for the attacker wallet gas fees using Gmail email addresses. It is hoped that Google might have some valuable information that could aid in tracing the owner of these Gmail accounts.

At the time of reporting, the DEA had not responded to requests for comment.