Unmasking the Crypto Thief

ZachXBT’s investigation points to an individual known as “Lick,” whose real name is John Daghita. Daghita is the son of Dean Daghita, CEO of CMDSS, a firm tasked with managing seized cryptocurrencies. The investigation links John Daghita to the illicit transfer of millions in cryptocurrency from government-controlled wallets.

According to company records, Dean Daghita leads Command Services & Support (CMDSS), a firm based in Haymarket, Virginia. CMDSS was awarded a contract in October 2024 to handle “Class 2-4” cryptocurrencies, including those not supported by major exchanges.

Tracing the Stolen Funds

The investigation gained traction following a recorded dispute in a Telegram group chat, where “Lick” engaged in a “band-for-band” argument to prove crypto ownership. During this exchange, he revealed a Tron address with $2.3 million and transferred another $6.7 million in ether.

ZachXBT traced these transactions back to a government address linked to assets seized from the infamous 2016 Bitfinex hack. This address had transferred $24.9 million to another wallet, which was involved in the theft.

Scrutiny on CMDSS

CMDSS has faced previous scrutiny regarding its government contract. Wave Digital Assets, a competitor, had protested CMDSS’s contract award, citing licensing issues and potential conflicts of interest. Despite this, the Government Accountability Office upheld the contract.

Challenges in managing seized crypto persist, as highlighted by a February 2025 CoinDesk report. The U.S. Marshals Service reportedly struggles with inventory controls, relying on spreadsheets to manage their holdings.

The ongoing investigation by ZachXBT continues to unravel the intricate details of this crypto theft case, shedding light on vulnerabilities within government systems handling digital assets.

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What are Litecoin ETFs and HBAR ETFs?

Asset manager Canary Capital has been making strides towards launching its Litecoin ETFs and HBAR exchange-traded funds. Recent filings, which include key final details, suggest that these financial products are near approval. However, the shutdown of the U.S. government has put a temporary halt on the process.

The recent amendments to the Litecoin (LTC) and Hedera (HBAR) spot ETFs introduced a fee of 0.95% and new tickers, LTCC and HBR. According to Bloomberg ETF analyst Eric Balchunas, these additions typically indicate that the funds are ready for launch.

Approval Delays Due to Government Shutdown

With the U.S. Securities and Exchange Commission (SEC) operating with limited personnel, the exact timeline for the approval of Litecoin ETFs remains uncertain. James Seyffart, another Bloomberg analyst, believes that these updates are positive signs, hinting that the ETFs are close to the “goal line.”

Crypto exchange Bitfinex had predicted in August that the authorization of altcoin-linked ETFs might ignite a new rally in altcoins, as such products would provide investors with increased access to these tokens.

Comparing Fees: A Closer Look

The fees for these ETFs are notably higher than those for spot Bitcoin ETFs, which average between 0.15% and 0.25%, according to Ledger. However, Balchunas mentioned that higher fees are typical for new and niche ETF sectors.

If the Litecoin ETFs and HBAR ETFs generate significant interest, it could lead to competition among issuers, with attempts to offer more cost-effective alternatives.

High-Leverage ETFs: The “Spaghetti Cannon” Approach

Despite the government shutdown, companies continue to file for new ETFs, with a particular focus on funds featuring 3x leverage. A 3x ETF tracks a range of assets and uses leverage to triple the daily or monthly returns.

Previous attempts to approve high-leverage crypto ETFs have been met with resistance from the SEC due to concerns over investor protection and market volatility. Tuttle Capital and other issuers have continued to file for these products, aiming to meet the demand of investors seeking high returns.

Future Prospects Amidst Uncertainty

The crypto industry had anticipated a significant influx of new crypto ETFs this October, with the SEC scheduled to make final decisions on numerous applications. Unfortunately, the government shutdown, which began on October 1, has left these plans in limbo.

While the SEC has announced that it will maintain limited operations, the approval process for Litecoin ETFs and other crypto products remains uncertain. Despite these challenges, the potential of these ETFs continues to generate significant interest in the crypto community.

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The scrutiny intensified after Senator Elizabeth Warren and other lawmakers questioned whether Sacks had surpassed the permitted number of days as a Special Advisor for AI and Crypto at the White House. In a letter, Warren, along with other senators and congress members, expressed concern about Sacks’ tenure.

David Sacks and His Role in Crypto Regulation

Appointed in December 2024, Sacks’ presence sparked optimism within the crypto community, raising expectations about his influence on upcoming crypto policies before the 2026 midterm elections. However, lawmakers allege that Sacks is “deeply invested” in the crypto and AI sectors, emphasizing the need for transparency regarding his workdays since President Trump’s inauguration.

With 167 weekdays having passed, excluding public holidays, Sacks needed to ensure at least 37 days off to remain within the 130-day limit. This limit is crucial in preventing conflicts of interest, as SGEs often juggle private-sector roles alongside government duties.

Concerns Over Potential Conflicts of Interest

Lawmakers argue that Sacks’ ties to Craft Ventures and other crypto and AI companies could influence his regulatory decisions. The White House had waived certain ethics restrictions to allow Sacks to maintain his investments in these sectors.

Earlier this year, Sacks claimed to have liquidated his crypto holdings before Trump’s inauguration. Yet, Warren previously questioned these assertions, urging Sacks to disclose his financial interests publicly to the Office of Government Ethics.

Despite reaching out, Cointelegraph has not received a comment from David Sacks on these matters.

Warren’s Continuous Scrutiny of Sacks

Elizabeth Warren’s scrutiny of Sacks is not new. In March, she challenged Sacks to substantiate his claims of divesting from digital assets. Warren expressed concerns about the potential benefits to Trump and other individuals from the executive branch’s digital asset policies, emphasizing the necessity for financial transparency.

The debates surrounding David Sacks and his role in crypto regulation highlight the complexities of balancing private interests with public duties, especially in rapidly evolving sectors like cryptocurrency and AI.

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The New Zealand government’s decision stems from the rising concerns over potential connections between domestic criminals and international crypto operations. However, in a somewhat contradictory stance, the authorities have reassured that they will continue to support legitimate cryptocurrency businesses operating within the country.

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The heart of the scandal lies in a Bitcoin (BTC) donation worth 1 billion Czech koruna (equivalent to $45 million) given to the Ministry of Justice by Tomáš Jiřikovský. Jiřikovský, a former convict involved in drug trafficking, weapons crimes, and embezzlement, made the donation on May 27.

The motion of no-confidence initiated by Czech opposition parties ANO, SPD, and the Pirates fell short with just 94 votes, seven votes less than the required 101 to pass. This decision followed a rigorous 24-hour debate in the Parliament, as reported by České Noviny.

Prime Minister Fiala admitted that the controversial Bitcoin donation could have been avoided, and that it has indeed tarnished the public’s trust in his administration. Despite surviving the no-confidence vote, the scandal has amplified worries over government officials engaging in crypto activities that may conflict with their professional responsibilities.

Fiala also took a jab at the opposition parties, accusing them of using the debate platform to sling mud and spread falsehoods against his party. The Civic Democratic Party, he said, will “take responsibility for ethical misconduct.”

In the wake of this scandal, the former Justice Minister Pavel Blažek resigned on May 30. Finance Minister Zbyněk Stanjura is also on the hot seat, facing calls for his resignation over allegations that he was aware of the donation.

On June 10, Czech President Petr Pavel swore in Eva Decroix as the new justice minister. Decroix vowed to launch an independent investigation into the ministry’s handling of the donation. She also assured that the Ministry, under her leadership, will fully cooperate in the investigation.

The scandalous Bitcoin donation from Jiřikovský was approximately one-third of his crypto wallet, a sum of 1,561 Bitcoin. This was made possible by a court ruling that returned his previously confiscated devices.

However, Jiřikovský, who was sentenced in 2017 and released in 2021, had control over another stash of 3,855.15 Bitcoin linked to the clandestine website Nucleus Market. Jiří Berger, a tech expert present when Jiřikovský opened the wallet with the 1,561 Bitcoin, claimed that the larger stash of Bitcoin is inaccessible due to it being stored on outdated technology.

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Deputy ANO chief, Karel Havlicek, disclosed this development on Tuesday. Speaking on Czech Television, Havlicek stated, “Unless something absolutely exceptional happens, we will trigger a no-confidence vote.” He firmly added, “There is no other option.”

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In a statement, Moody’s mentioned: “With the current fiscal proposals under review, we do not foresee significant reductions in mandatory spending and deficits over multiple years. Over the coming decade, we anticipate larger deficits as government spending on entitlements increases while government revenue remains relatively stagnant.”

The downgrade is a single step in the 21-notch rating scale that Moody’s uses to assess the financial health of entities. Despite the downgrade, Moody’s remains optimistic about the long-term financial health of the United States due to its robust economy and the standing of the US dollar as the global reserve currency, implying “balanced” lending risks.

The reaction to Moody’s revised credit rating for the US sparked various responses from investors and market participants. Gabor Gurbacs, CEO and founder of Pointsville, a crypto loyalty rewards company, criticized the rating agency’s past credit assessments during financially stressful periods as unreliable, indicating that the revised outlook was overly optimistic.

On the other hand, macroeconomic investor Jim Bianco dismissed the recent Moody’s credit outlook as not truly reflecting a downgrade in the perceived creditworthiness of the US government, referring to the announcement as a “nothing burger.”

In January 2025, the US government debt exceeded $36 trillion and continues to rise, despite recent attempts by influencers like Elon Musk to reduce federal spending and control the national debt. As debt increases and investors’ confidence in US government securities dwindles, bond yields will rise, leading to higher debt service payments and further bloating the national debt. This could lead to a vicious cycle where the government has to offer higher yields to attract investors to buy government debt.

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Retailleau assured that measures including regular police checks at the residences of cryptocurrency investors, exclusive police briefings for family members of crypto holders, and a dedicated helpline for investors feeling threatened, are soon to be implemented. He pledged the government’s resolve to curtail these heinous acts, akin to its successful efforts in the past to halt bank and jewellery thefts.

The French government’s actions come in the wake of disturbing events where family members of affluent cryptocurrency investors were targeted by criminals. The authorities will now provide a suite of new protective measures to ensure the safety of investors. The rising threat of violence against crypto investors has raised concerns among French authorities about potential brain drain from the country if entrepreneurs are unable to operate their businesses without fearing for their personal safety.

Among the measures to be introduced, Retailleau mentioned a new training program for law enforcement officials, focusing on “anti-crypto asset laundering”, to tackle the growing menace of crypto abductions.

In a shocking incident, a crypto entrepreneur’s daughter was seen being forcefully pulled into a van by masked men. The entrepreneur, Pierre Noizat, the CEO and founder of Bitcoin exchange Paymium, reported that his son-in-law sustained serious injuries during the incident. Noizat criticised the government’s current efforts, expressing fear that without immediate action, similar incidents will continue to plague the crypto community.

The attempted abduction took place in a wealthy neighborhood in the 11th arrondissement of Paris. Noizat hailed his daughter’s husband for his resistance and a shopkeeper who bravely chased the kidnappers away. Despite the traumatic incident, Noizat expressed gratitude for the courage shown by bystanders.

In another incident, a wealthy cryptocurrency investor was freed from a car trunk after being tortured and soaked in gasoline. The victim was abducted in broad daylight and his finger was severed by the kidnappers to pressure his family into paying a $4 million ransom. These incidents seem to follow a similar pattern, prompting French authorities to ramp up efforts to curb the escalating situation.

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Currently, one of these wallets possesses 600 BTC, equivalent to roughly $53 million at the time of reportage. Since 2019, Bhutan has been utilizing its plentiful hydroelectric power resources to mine Bitcoin. In September 2024, Arkham Intelligence identified the first wallet associated with Druk Holdings, the investment arm of the Bhutan government. Following the recent transfers, this wallet now contains Bitcoin investments totaling $889.9 million.

These figures suggest that Bhutan’s cryptocurrency holdings account for 30.7% of its GDP, which was reported to be $2.9 billion in 2023 by the World Bank. Despite Bitcoin being the Bhutan government’s primary holding, the nation doesn’t seem to be solely focusing on a Bitcoin-based strategic reserve. Druk Holdings’ wallet also holds other cryptocurrencies including Ether (ETH), LinqAI (LNQ), Phil (PHIL), and Apu Apustaja (APU), among others.

In October 2024, Bhutan transferred $66 million worth of its BTC holdings to Binance. Over the past couple of months, the government has been distributing smaller fractions of Bitcoin and Ether from its main wallet to different addresses.

Adoption of cryptocurrencies is not limited to just the national government of Bhutan. This trend has also percolated down to the city level. For instance, in January 2025, the Gelephu Special Administrative Region of Bhutan announced plans to include diverse digital assets in its strategic reserve.

Governments adopting Bitcoin strategic reserves have seen their holdings grow significantly during the ongoing bull run from 2024. El Salvador’s Bitcoin holdings swelled to $100 million in November 2024, and the US government now controls more than $17 billion in Bitcoin.

While national governments are in the spotlight, several state governments, particularly in the US, are also considering creating Bitcoin reserves. Texas has passed its Bitcoin reserve bill, pending the governor’s signature. Bitcoin reserve bills in states like Arizona are nearing enactment, although a few states have dismissed their Bitcoin bills for various reasons.

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Implications of the Blockchain Platform The implementation of a blockchain-based identity verification system in China could have far-reaching implications. It demonstrates the practical application of blockchain technology in large-scale government projects and could serve as a model for other countries looking to modernize their identity verification systems.

Potential Impact on Blockchain Technology Adoption China’s move could accelerate the adoption of blockchain technology in various sectors, highlighting its versatility beyond cryptocurrency. It also underscores the growing importance of blockchain in enhancing data security and streamlining administrative processes.

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