🧵1/Ω
i found a pretty fascinating trove of documents that detail one man's long and arduous 𝘬𝘢𝘮𝘱𝘧 to force #Tether to seize ~$3 million USDT that he lost to an address poisoning scam a few years back.
🧵2/Ω
Asif Ayub Patel was innocently attempting to purchase $3 million worth of gold bars from Northern Lights, a precious metals dealer based in Hong Kong that prefers to be paid in Tether, as any freedom loving Dubai resident is wont to do.
TTNRRr9jJ4sKAYExY9UryfxApFXJH2t2SJ
🧵3/Ω
Unfortunately he was careless & got pwned by an address poisoning attack: scammer sends you some crypto from an address that starts/ends w/the same characters as the address you are trying to transact with and hopes you copy/paste from recent txns w/out checking.
🧵4/Ω
He ended up serving legal papers against a bunch of crypto companies:
- #Binance (of course)
- #Pexpay (I guess a broker that works w/binance?)
- #KuCoin (chinese crypto exchange)
- #WhiteBit (ukrainian/lithuanian crypto exchange)
- #Tether
🧵5/Ω
Eventually KuCoin coughed up the Russian ID used to open an account involved in the theft w/an email "arteeeemnikol@gmail.com"
Elliptic confirmed that wallets that received stolen USDT had transacted with #Nobitex, an Iranian exchange (pretty normal for russian criming).
🧵6/Ω
But investigations of the criminals inside, our boy's main goal was to get #Tether et al. to revoke the stolen tokens/give him back his money. His initial attempts didn't go great.
Tether's response was basically "lol can't do anything bc open source kthxbai".
🧵7/Ω
WhiteBIT tried the "these are not the droids you are looking for" approach.
"Our (intentionally useless) anti-money laundering software detected no problems here therefore there is no problem here, but also defi lol."
🧵8/Ω
Binance's tack was more "this is not the Binance you are looking for".
🧵9/Ω
Also while I have long been aware that Binance serves as the backend / clearing house for anyone who wants to run their own branded crypto exchange, I guess I wasn't aware of the explicitness of the arrangement between something like #Pexpay and Binance.
🧵10/Ω
Unsurprisingly Pexpay kind of just up and disappeared altogether, which conveniently meant none of this was Binance's problem, though "as a courtesy" they agreed to freeze arteemnikol@gmail.com's account.
🧵11/Ω
The scammer's defense was actually pretty ingenious - he claimed that the $3 million USDT lost by Asif Ayub Patel was actually payment for $3 mil worth of Monero / $XMR.
Monero is a) untraceable and b) on another blockchain, so this is kind of hard to disprove.
🧵12/Ω
Side note: the crypto industry's anti-money laundering detection tools like #Chainalysis and #AMLBot are a total joke.
IMHO they are intentionally useless, intended only to create a smoke screen for lawyers to use in cases like this.
🧵13/Ω
Our boy hired a consultant to tell him that chinese crypto exchanges like Binance, Bybit, and HTX (owned by Justin Sun, a current business partner of the president of the united States) are popular with money launderers.
Shocker.
🧵13/Ω
He also sued an NFT company for airdropping NFTs into the wallets that robbed him, which is not super relevant/important but IMHO is kind of hilarious.
🧵14/Ω
$0.02: the gold dealer in HK was probably complicit. Most address poisoning attacks involve sending fractions of a penny, whereas this crim thought it was worth risking $100 to match the guy's test payment. Implies they knew a large followup payment was coming.
🧵15/Ω
That's not really addressed in the court filings and I'm sure all the other gold dealers in hong kong who prefer to send and receive cash on the blockchain preferred by money launderers would never dream of breaking any kind of law, but to me it's very sus.
🧵16/Ω
In the end, after Patel's lawyers chased scammers and the crypto co's through a bewildering list of jurisdictions, #Tether froze a bunch of scam wallets.
But by then there was only ~$410k left of what was potentially his $3 million...
🧵17/Ω
...and realistically speaking, seeing as how the criminal wallets that Tether finally froze had moved well over $2.5 *billion* worth of USDT in their lifetime, most of that $410k probably belonged to other people.
Couldn't verify how much Patel did or didn't recover.
@Bitfinexed @OccamiCrypto @SilvermanJacob @molly0xFFF @MikeBurgersburg @Holmes_Crypto_ @JustinElliott @AABerwick @_tom_wilson_ @BenFoldy
🧵18/Ω
Remember kids, if this guy had just done a normal bank transfer instead he could've just called his bank and reversed the xfer the next day instead of having to pay lawyers to chase crypto scumbags all over the world, only to in the end still lose most or all of his money.
🧵19/Ω
All 319 pages of court filings and communications between Mr. Patel, Tether, Binance, etc. etc. can be viewed here:
scribd.com/embeds/8034612…
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