Two people, a Singaporean living in the United States and a US citizen, have been charged with plotting to steal and launder more than $230 million in cryptocurrency.
The pair, identified as 20-year-old Malone Lam, a Singaporean who splits his time between Miami and Los Angeles, and 21-year-old Jeandiel Serrano of Los Angeles, were arrested by the FBI on Wednesday evening.
Details of the crypto money laundering scheme
According to a press release Lam and Serrano fraudulently obtained more than 4,100 from the U.S. Department of Justice Bitcoinworth approximately $230 million during the theft, from a victim located in Washington DC
Lam, known online by the aliases “Anne Hathaway” and “$$$,” and Serrano, who uses the aliases “VersaceGod” and “@SkidStar,” made their first court appearances on Thursday.
They are accused of running a crypto theft and money laundering operation that involved fraudulently accessing victims’ crypto accounts, allowing them to transfer funds into their control. The Justice Department noted that the scheme had been active since August of this year.
The plan orchestrated by Lam and Serrano involved advanced money laundering techniques to hide the origins of the stolen assets. According to the allegations, they used cryptocurrency exchanges and mixing services to process and to obscure the movement of the stolen Bitcoin.
A key method used in this operation was “peel chains,” a technique where large sums of cryptocurrency are broken up into smaller transactions, making it difficult to trace the funds.
Additionally, virtual private networks (VPNs) and pass-through wallets have added anonymity to their operations, allowing them to avoid detection when laundering the stolen funds.
How was the scam carried out?
Blockchain researcher ZachXBT provided insight into how the scam was carried out. In a post on social media platform X, ZachXBT explained that the accused individuals used “sophisticated social engineering” tactics to defraud their victims.
2/ Incident Summary: On August 19, 2024, the threat actors targeted a single Genesis creditor by:
1) Calling as Google Support from a spoofed number to hack personal accounts
2) Calling Gemini support and claiming that the account has been hacked
3) Victims are socially manipulated… photo.twitter.com/gemvrdRLNm— ZachXBT (@zachxbt) September 19, 2024
The $230 million fraud involved targeting a creditor of the now-defunct trading firm Genesis. The group allegedly used a spoofed phone number posing as Google Support to convince the victim to reset their two-factor authentication, ultimately putting their cryptocurrency under the conspirators’ control.
According to the U.S. Department of Justice, the stolen cryptocurrency was used to fund a lavish lifestyle, with the proceeds being spent on luxury goods and experiences.
According to law enforcement, Lam and Serrano spent the laundered cryptocurrency on lavish trips, visits to exclusive nightclubs, luxury cars, expensive jewelry, designer bags and rental properties in Miami and Los Angeles.
Their extravagant spending habits, financed with stolen assets, eventually attracted the attention of authorities.
Main image created with DALL-E, graph from TradinhgView