Unveiling the $40M Crypto Theft Allegation

In a remarkable investigation, ZachXBT has linked the theft of over $40 million from U.S. government crypto wallets to John Daghita, son of Dean Daghita, the president of CMDSS. This company was previously contracted by the U.S. Marshals Service to manage seized cryptocurrencies.

ZachXBT’s research extends previous investigations that connected an online persona, known as ‘John’ or ‘Lick’, to suspicious crypto activities exceeding $90 million. A Telegram argument, showcasing wallet ownership through live fund movements, first brought these addresses to light.

Despite the serious allegations, no legal charges have been filed, and CMDSS has not commented on the matter. The broader implications for crypto security and governance remain significant as the industry grapples with such high-profile cases.

Kraken’s ‘DeFi Earn’ Launch

Simultaneously, Kraken has introduced ‘DeFi Earn’ to users across the EU, Canada, and most U.S. states. This new feature allows users to access onchain yields directly from Kraken’s platform, promising returns up to 8% APY.

Powered by Veda’s vault infrastructure with Chaos Labs and Sentora managing initial USDC vault strategies, Kraken’s move represents a broader trend where centralized exchanges integrate DeFi-native features. This innovation aims to attract traditional exchange users into the decentralized finance realm.

Japan’s Crypto ETF Ambitions

In related news, Japan is gearing up to approve its first crypto ETFs by 2028. Major financial players like Nomura and SBI are expected to spearhead these initiatives on the Tokyo Stock Exchange, in alignment with regional trends in crypto financial products.

This development follows the success of U.S. Bitcoin ETFs, which have amassed significant assets. Japan’s regulatory shift highlights a global push towards integrating digital assets into traditional financial markets.

Stay informed on these and other pivotal developments with The Block’s daily digest, offering actionable insights into the dynamic crypto landscape.

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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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It is alleged that the attackers drained at least $73 million from assets within the Tron network and Ethereum Virtual Machine (EVM)-compatible blockchains. However, only a segment of this amount has been confirmed as lost so far.

ZachXBT identified the attackers’ use of a “vanity address” to breach the protocol, leading to “suspicious outflows” from numerous wallets linked to Nobitex. A vanity address is a public wallet address that features a specific sequence of characters chosen by the user.

The first theft of $49 million was reportedly conducted through the address “TKFuckiRGCTerroristsNoBiTEXy2r7mNX.” The second address employed was “0xffFFfFFffFFffFfFffFFfFfFfFFFFfFfFFFFDead,” as per Tronscan.

The security breach contributes to the rising tally of crypto industry hacks in 2025. As reported by blockchain security firm CertiK, digital assets worth more than $2.1 billion have been stolen in this year alone. Hackers have now diversified their strategies from exploiting blockchain infrastructure to capitalizing on human weaknesses, says Ronghui Gu, co-founder of CertiK.

Gu explained during the Chain Reaction daily X spaces show on June 2, “The majority of this $2.1 billion was caused by wallet compromises, key mismanagement and operational issues.”

In schemes like address poisoning, hackers don’t need to employ any technical hacking techniques. Rather, they manipulate victims into transferring assets to fraudulent wallet addresses.

This is an ongoing story and will be updated as more details become available.

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Wolk first mentioned Thomas while discussing a recent speech by Murad Mahmudov, who advocated for memecoins in a controversial presentation titled the “Memecoin Supercycle” at Token 2049. Wolk argued that influencers like Thomas lack real market insights and instead exploit their followers by promoting volatile memecoins.

In response, Thomas defended his actions, pointing out the success of some of his picks, such as Dogwifhat (WIF), which skyrocketed from a $100,000 market cap to an astonishing $4.8 billion in March. Thomas suggested that these memecoins offer better returns than utility tokens like Chainlink (LINK), which has declined 90% against Bitcoin year-to-date.

Wolk accused Thomas of hyping numerous coins, including BODEN, HOBBES, ZEUS, and WYNN, as well as coins endorsed by celebrities such as Jason Derulo and Davido. However, most of these tokens have seen significant drops, with BODEN falling by 99% since its peak in April.

Memecoins have become a contentious topic in the crypto world. While proponents argue that tokens like Dogecoin (DOGE) and Pepe (PEPE) offer substantial returns, critics warn that these coins are often used to extract wealth from retail investors before vanishing from the market.

Wolk concluded by stating that memecoins may dominate the attention of crypto traders, but the risks associated with them can lead to significant financial losses for less experienced participants.

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Potential Breach Details

ZachXBT highlighted that Compound Finance’s website might have been compromised, urging users to avoid interacting with the site until further notice. The potential breach raises significant concerns, given the platform’s prominence in the DeFi space.

Community Reaction and Response

The DeFi community has reacted swiftly, with users and stakeholders expressing their concerns on social media platforms. Compound Finance has yet to release an official statement regarding the potential breach, leaving many users in a state of uncertainty.

Security Measures and Recommendations

Users are advised to monitor their accounts closely for any unusual activity. It is also recommended to avoid any transactions through the Compound Finance website until further confirmation of the site’s security status is provided.

Ongoing Investigation

ZachXBT and other cybersecurity experts are actively investigating the potential breach. Updates are expected as more information becomes available, and users are encouraged to stay informed through official channels.

Impact on DeFi Market

The news of the potential breach has caused ripples across the DeFi market, with investors closely watching the developments. The situation underscores the importance of robust security measures in the rapidly evolving cryptocurrency landscape.

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The situation escalated as BitForex’s communication channels went quiet, with admins in the Telegram group initially attributing the halt to maintenance before disappearing altogether. This lack of transparency and accountability has left users in limbo, exacerbating fears and uncertainty within the crypto sphere. The departure of the BitForex CEO a month prior to the incident, coupled with the exchange’s significant holdings in specific cryptocurrencies, adds layers of complexity and speculation regarding the future of BitForex and the safety of its users’ assets.

The unfolding BitForex saga serves as a critical lesson for the cryptocurrency community on the importance of transparency, due diligence, and the inherent risks of digital asset exchanges. It underscores the volatile nature of the crypto market and the need for robust security measures and regulatory oversight to protect investors. As the community awaits further developments, the incident is a stark reminder of the vigilance required in navigating the digital currency landscape.

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ZachXBT’s Damning Accusations and Grok’s Volatility

ZachXBT accused the Grok meme coin of being a recycled scam project. The token, which saw a staggering 13,000% increase over the past week, faced accusations of reusing social media accounts from a previous scam token project. ZachXBT’s investigation revealed that these accounts and websites were previously associated with another meme coin project, ANDY, which also experienced a significant decline from its all-time high.

Grok’s Price Collapse and Recovery Efforts

Following ZachXBT’s revelations, Grok’s value took a nosedive, dropping from its all-time high of $0.027 to a low of $0.007. Although there has been a slight recovery to $0.011, the damage to investor confidence is evident. In response, the Grok team attempted to restore faith in the token by burning a substantial amount of it, approximately $1.7 million worth, in a bid to reduce supply and stabilize the price.

The Rise and Fall of Grok Meme Coin

Grok meme coin, at its peak, was one of the largest new meme coins in the market, with a near $200 million market cap. Its launch coincided with Elon Musk’s announcement of Grok AI, leading to a surge in interest and price as enthusiasts sought to capitalize on the hype.

The Trend of Meme Coin Projects and Risks

The cryptocurrency market has seen a rise in meme coin projects, such as BALD and Pepecoin, which have attracted significant attention and market capitalization. However, these projects often carry high risks, as evidenced by sudden team actions that can drastically affect token value. Investors are advised to exercise caution and conduct thorough research before engaging in such volatile markets.

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