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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The investigation, led by crypto researcher Eye, uncovered the link in a Saturday post on X. The whale’s main wallet, known as ereignis.eth, was found to be connected to another Ethereum Name Service (ENS) name, garrettjin.eth. This link traces directly to Jin’s verified X (Twitter) account, @GarrettBullish.

The Mysterious Hyperliquid Whale

Eye’s findings suggest that the ENS name ereignis.eth (which means “event” in German) is a crucial identifier for the operations on Hyperliquid/Hyperunit. This wallet’s activities align closely with Jin’s known business endeavors, including transfers to staking contracts and addresses backed by exchanges he once associated with, such as Huobi (HTX).

Moreover, the whale’s wallet was involved in transactions linked to BitForex addresses and Binance deposits. These funds were reportedly used to execute large Bitcoin trades, including a staggering $735 million BTC short.

BitForex and Its Fraught History

Garrett Jin’s tenure at BitForex, from 2017 to 2020, was marked by controversy. The exchange faced accusations of falsifying trading volumes and was flagged by Japan’s Financial Services Agency for unregistered operations. In 2024, BitForex suffered a $57 million loss from its hot wallets, leading to withdraw freezes and its eventual shutdown following team detentions in China. Hong Kong’s Securities and Futures Commission also issued a warning for potential fraud, with users reporting millions in unrecovered funds.

After BitForex’s collapse, Jin launched several ventures, including WaveLabs VC, TanglePay, IotaBee, and GroupFi. However, many of these projects have since stalled. In 2024, he introduced XHash.com, a platform for institutional Ethereum staking, which investigators claim may have facilitated questionable fund activities. Subsequently, Jin removed XHash from his social media profiles, though it remains visible on his Telegram account.

Skepticism Surrounding the Allegations

Despite the investigation’s findings, not all are convinced. Crypto analyst Quinten François expressed doubts about the alleged connections between the Hyperliquid whale and Jin. He questioned the simplicity of the evidence, stating, “Why would you have an .eth name leading to your X handle in a wallet that directly connects to market manipulation wallets and other crime-related wallets?” François suggests that the setup might be “too simple to be true.”

This developing story highlights the complexities and potential risks within the cryptocurrency market, especially concerning large-scale operations and regulatory scrutiny.

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Pavel Durov’s Arrest: Unprecedented and Controversial

The arrest of Pavel Durov in August 2024 by French authorities marked a significant and unprecedented move. Durov described the situation as “legally and logically absurd,” emphasizing the challenges faced when holding a tech executive accountable for user-generated content. According to Durov, the investigation is “struggling” to find any evidence of wrongdoing either by him or the Telegram platform.

Telegram’s Moderation and Compliance

Durov insists that Telegram’s moderation practices are aligned with industry standards, and the platform has consistently responded to legally binding requests from France. Despite this, the investigation persists, requiring Durov to return to France every 14 days, with no appeal date in sight. He argues that this has caused irreparable damage to France’s image as a country that values freedom.

Backlash Against French Government

Durov’s arrest has ignited widespread backlash from the crypto community, human rights organizations, and free speech activists. Many accuse the French government of using the arrest to pressure Durov into censoring Telegram. The situation has sparked debates about the balance between regulation and freedom in the digital age.

Political Motivations Denied

While French President Emmanuel Macron has denied any political motivations behind the arrest, his statements have been met with skepticism. The crypto community has been vocal, with figures like Mert Mumtaz questioning the fairness of the legal proceedings and pointing out inconsistencies in the enforcement of law.

Commitment to Privacy and Freedom

Despite the pressures, Durov remains steadfast in his commitment to maintaining user privacy. He has made it clear that Telegram will not compromise by handing over encryption keys or building backdoors into the application. Durov emphasizes that the platform will exit any jurisdiction before submitting to censorship demands.

The ongoing Telegram investigation continues to be a focal point of discussion, highlighting the complex relationship between technology, privacy, and government regulation. Durov’s case serves as a reminder of the challenges faced by tech innovators in maintaining a balance between compliance and protecting user freedoms.

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A formal request has been sent to Pulte, asking for a detailed explanation of his plan and its potential impact on the U.S. housing market and financial system. The request, co-signed by Senators Elizabeth Warren, Chris Van Hollen, Mazie Hirono and Bernie Sanders, asks for a response by August 7.

Pulte previously instructed mortgage purchasers Fannie Mae and Freddie Mac to develop a proposal on incorporating cryptocurrency holdings in risk assessments for single-family mortgage loans, without converting the assets into U.S. dollars. The FHFA has been supervising both organizations since 2008, following the financial crisis sparked by the subprime mortgage market collapse.

The senators have expressed concerns that this plan could expose consumers to unnecessary risks and potentially destabilize the U.S. housing and financial markets. They highlighted that under the current policy, lenders cannot factor in cryptocurrency in mortgage decisions unless it is converted to U.S. dollars.

Furthermore, they pointed out the inherent volatility and liquidity issues of cryptocurrency, suggesting that borrowers who rely on cryptocurrency may face an elevated risk of mortgage default due to potential difficulties in converting crypto assets to cash. They also highlighted the increased risk of loss due to scams, cyber-attacks, or physical theft.

The senators have also expressed worries about potential conflicts of interest within the FHFA, Fannie Mae and Freddie Mac, especially considering President Donald Trump and his family’s deep involvement in the cryptocurrency industry.

The senators pointed out Pulte’s spouse’s significant crypto holdings, raising further conflict of interest concerns. They criticized Pulte’s order for lacking clarity and providing no details on how the proposal would be developed, how risks and benefits would be assessed, and how feedback would be gathered.

The senators have asked Pulte to answer a series of questions about the order, including its approval process and his steps to avoid conflicts of interest.

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In August 2024, a single victim’s account lost approximately 4,100 BTC worth $243 million in an overnight heist. The culprits were three gamers-turned-hackers, who employed sophisticated social engineering tactics to commit the theft. The youngest among them, 19-year-old Veer Chetal, became notorious for his audacious acts.

The trio, including Chetal, Malone Lam, and Jeandiel Serrano, orchestrated a well-planned attack. They deceived the victim with fake calls from Google and Gemini support teams, convinced the victim to change their 2-factor authentication (2FA), and then transferred the funds to a compromised wallet. Moreover, they tricked the victim into sharing their screen via AnyDesk, revealing their Bitcoin private key.

Despite executing their plan successfully, their sloppy mistakes led to their downfall. Crypto investigator ZachXBT, who had been following the case closely, discovered a recording of the hackers’ live reactions as they received the stolen Bitcoin. Chetal further incriminated himself by accidentally leaking his name during the livestream and purchasing luxury items with the stolen funds.

Following the investigation, all three culprits were arrested. However, Chetal’s saga didn’t end there. After agreeing to cooperate with the authorities and pleading guilty, he was involved in yet another scam while out on bail, stealing an additional $2 million.

This case serves as a stark reminder of the need for vigilance in the digital age, especially as young, tech-savvy individuals are drawn into the world of high-stakes digital crime. Awareness, open conversations, and firm boundaries around financial access are crucial to curb such illicit activities.

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Lucas Moskowitz, Robinhood’s chief legal officer, however, refuted these allegations in a statement to Cointelegraph, insisting that the platform is upfront about its charges, providing the cheapest average cryptocurrency trading services for its users.

James Uthmeier, Florida’s Attorney General, accused Robinhood of contravening the Florida Deceptive and Unfair Practices Act in a statement released on Thursday. He also issued a subpoena requiring various documents from the platform. He emphasized that “Crypto is a pivotal component of Florida’s financial future,” and consumers should be ensured transparency in their transactions.

Robinhood has always maintained its position as the most economical option, but Uthmeier contends these claims are misleading. Robinhood’s website asserts that its traders can buy and sell cryptocurrencies at the lowest average cost in the US.

The Attorney General points out that Robinhood’s revenue model, which is based on payment for order flow (PFOF), makes the platform more costly since third parties paying Robinhood for order flow may need to quote less favorable prices to maintain profitability.

Robinhood CEO Vlad Tenev defended the practice in a 2023 CNBC interview, despite concerns about potential conflicts of interest and brokers possibly not always acting in the best interest of clients.

In December 2020, Robinhood agreed to a $65 million fine, with no admission of guilt, to settle SEC allegations, including claims that Robinhood falsely stated its customers’ orders were executed at better prices than other brokers.

Speaking to Cointelegraph, Robinhood’s General Counsel Lucas Moskowitz claims that their “disclosures are best-in-class.” He added, “We are proud to be a place where customers can trade crypto at the lowest cost on average.”

Despite the news of Florida’s investigation, Robinhood investors seemed unaffected, with the stock closing Thursday’s trading session up by 4.4% at $98.70 during a crypto market rally, just short of its all-time high of $100.88.

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This groundbreaking revelation is the culmination of an intensive 18-month probe into the world of cryptocurrency by a consortium of Australian law enforcement and intelligence agencies. Initiated in December 2023, the investigation was led by the Queensland Joint Organized Crime Taskforce (QJOCTF) and involved tracing the suspicious money flow of a ring member, leading to the unearthing of a complex and large-scale money laundering operation.

According to the authorities, the perpetrators laundered a total of $123 million using a convoluted system of front businesses and cryptocurrencies. This illicit money was then converted into cryptocurrencies.

Money laundering is a technique used by criminals to make illegally-acquired money appear legitimate. The highly structured process often involves three stages: placement (introducing the illegal money into the financial system), layering (obscuring the source of the money through a series of complicated transactions), and integration (redistributing the now “clean” money back to the criminals). This process is frequently used to purchase properties, luxury goods, and in this case, cryptocurrencies.

The Australian scam ring involved a multi-step scheme to evade Anti-Money Laundering (AML) measures. The key player was a security firm that transported illicit funds to its front businesses. These funds were then transferred to a car dealership, which served as the perfect front for money laundering due to its regular large cash transactions. Upon receipt, the dealership would mix the illegal funds with legitimate income during bank deposits, further obscuring their origin. These funds were then forwarded to a sales promotion company, which converted part of the proceeds into cryptocurrencies.

Following the revelation of this scheme, authorities swiftly acted to seize $170,000 worth of crypto assets, $30,000 cash, and business documents. Seventeen properties, cars, and funds in multiple bank accounts were also frozen, with the total value of the frozen assets amounting to around $21 million. The investigation continues with the potential for more individuals to be charged.

Despite occasional associations with illegal activities, the use of cryptocurrencies in criminal activities accounts for only a small fraction of total crypto volume. Cryptocurrency transactions are indeed anonymous, but each transaction leaves a permanent, traceable record on the public ledger, providing law enforcement agencies with a trail to follow. As this case demonstrates, the very features that may attract criminals can also lead to their downfall.

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According to a report from the French newspaper, Le Monde, Durov is allowed to travel exclusively to Dubai, where Telegram’s headquarters is located, for a period of 14 days starting from July 10. Previously, in March, he was permitted to visit Dubai for a few weeks.

Apart from business-related reasons, Durov has personal motivations for his travel to Dubai. In an interview with the conservative French newspaper, Le Point, Durov stated, “I have just become a father and I’m missing the initial months of my son’s life. He doesn’t have a passport yet because I wasn’t there during his birth in Dubai. My teenage son, who’s currently in a boarding school in Dubai, recently broke his arm and lacks parental support.”

Durov was arrested by agents of France’s National Anti-Fraud Office on August 24, 2024, concerning a substantial cybercrime investigation. Allegations against the Telegram CEO include providing cryptography tools and services, circulating minor’s pornographic materials, and money laundering, as previously reported by The Block.

Telegram, a secure messaging platform, supports the Layer 1 blockchain The Open Network (TON). TON’s native token, Toncoin, currently trades at $2.93 with a trading volume of $128.4 million in the last 24 hours, as shown by The Block’s TON Price Page. The token holds a market capitalization of $7.2 billion.

During the summer of 2024, TON and Toncoin experienced a significant growth, primarily due to blockchain-based mini apps like Hamster Kombat and Notcoin on the messaging platform. The Block’s Data Dashboard reveals that the number of active TON addresses peaked at 1.44 million on October 2, 2024, and now stands at 130,000 as of June 17.

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The court filings were part of the prosecution’s request for a two-year sentence for Council Jr. for his role in the SEC hack. The hack led to a false announcement about Bitcoin’s exchange-traded fund approval, causing a significant market shakeup. Investigations revealed that Council Jr. had also searched ‘How long does it take to delete a Telegram account’ on his devices, which were seized last June following a search warrant.

Despite setting his Telegram chats to auto-delete after two weeks, the prosecutors were able to retrieve messages where Council Jr. discussed SIM swapping with other individuals, believed to be located overseas. Council Jr. had confessed that he earned around $50,000 from offering SIM swap services between January and June 2024.

He had executed the SEC hack by creating false identity documents to impersonate an individual who had access to the SEC’s X account. These documents were used to deceive a staff member at AT&T into reassigning the victim’s phone number to Council Jr.’s SIM card. He then bought a new iPhone, inserted the new SIM card, and shared the SEC’s X account access codes with his accomplices, who then posted the fraudulent Bitcoin ETF approval news.

The prosecutors stated that Council Jr. was paid in Bitcoin and other cryptocurrencies for the SEC hack. However, his luck ran out in June 2024 when law enforcement agents caught him while attempting another SIM swap. A subsequent search warrant led to the discovery of templates for fake ID cards on his laptop. He pleaded guilty on Feb. 10, following an indictment for Conspiracy to Commit Aggravated Identity Theft and Access Device Fraud in October.

The fake news post on the SEC’s X account garnered over a million views before the SEC confirmed the hack 15 minutes later. The incident led to a $1,000 rise in Bitcoin’s price, followed by a nearly $2,000 drop, wiping out tens of millions of dollars in market positions. The SEC’s X account did not have two-factor authentication installed at the time of the incident, a security oversight that the SEC blamed on erroneous removal by X Support.

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The El Dorado Task Force, established in 1992, primarily investigates “transnational money laundering” and financial crimes committed by organizations. Thus, the reported investigation into Anchorage could indicate international financial operations. Anchorage was co-founded by Portuguese-American businessman Diogo Mónica and Nathan McCauley. Apart from its US operations, Anchorage also operates in Singapore and Portugal, with investors such as Andreessen Horowitz, Goldman Sachs, and Visa.

As the only federally chartered crypto bank in the United States, Anchorage Digital secured its national trust bank charter from the Office of the Comptroller of the Currency (OCC) in January 2021. Despite its solid regulatory standing, the company has faced regulatory hurdles in the US. In April 2022, the OCC issued a consent order against the bank for inadequacies in its Bank Secrecy Act and Anti-Money Laundering compliance programs. Anchorage Digital was then directed to form a committee to address these alleged issues under OCC oversight.

Since its inception in 2017, Anchorage has been augmenting its cryptocurrency offerings, providing services for institutional clients. Anchorage is one of the custodians of BlackRock’s Bitcoin exchange-traded funds (ETFs), along with Coinbase and BitGo. BlackRock’s BTC funds have seen more than $35.5 billion in total inflows since their January 2024 launch. Anchorage also serves Cantor Fitzgerald, providing custody and collateral management for the company’s Bitcoin holdings since March 2025. The company reported more than $50 billion in assets under management in 2024.

Competing with Anchorage in the digital asset custody space are companies like Ripple, Kraken, Taurus, and Fireblocks. Nevertheless, traditional financial institutions such as HSBC, Citi, and BNY Mellon are also entering the crypto space. A 2025 EY survey revealed that 59% of institutional investors plan to dedicate over 5% of their assets under management to cryptocurrencies, signaling increasing demand for institutional-grade custody services.

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