The Department of Justice has disclosed that the FBI developed a cryptocurrency token called “NexFundAI” as part of a mission aimed at apprehending crypto criminals. Recently, the wallet address used by the FBI was exposed, uncovering a variety of other tokens stored within it.
The FBI’s involvement with tokens during investigations has resulted in charges of fraud and market manipulation against several individuals and entities.
FBI Wallet Contains Various Tokens
Conor Grogan, an executive at Coinbase, revealed the FBI’s wallet address. He discovered that it contains tokens such as EthereumMax, BONE, and a number of meme coins, all residing on the Ethereum blockchain.
“I’m not sure if the FBI was aware of this, but they essentially exposed their wallets. Shortly after the wallet was set up, the wallet that funded the FBI wallet subsequently transferred capital to various other wallets, conducting dozens of trades. From what I can see, FBI wallets hold at least 75% of the token supply,” Conor stated.
Read more: What Is a Rug Pull? A Guide to the Web3 Scam
Conor also found that a wallet linked to the FBI contains 1.734 billion Pornrocket tokens. Furthermore, Conor discovered that the FBI wallet address had executed numerous transactions on Tokenlon, Binance, Zixipay, and HTX exchanges. Currently, this address has over $39,600 worth of cryptocurrency.
“The FBI is holding a long position in ETH,” Conor commented.
In addition, on-chain analyst Cygaar highlighted that the FBI utilized code from OpenZeppelin’s library without proper credit, pointing out this as a potential copyright infringement.
“Hello FBI, I noticed that your smart contracts directly violate the MIT License, which subjects you to copyright infringement. You clearly copied several components from OpenZeppelin’s libraries (which use the MIT License), but you do not possess a license for the code. According to the MIT License, ‘this permission notice shall be included in all copies or substantial portions of the Software,’ which you clearly failed to observe in your contracts,” Cygaar remarked.
FBI Employs NexFundAI Token in Crypto Sting Operation
As per a DOJ announcement, the FBI created the crypto token “NexFundAI” as part of the operation. Subsequently, they employed market makers to influence the token market in order to gather evidence of illicit activities.
NexFundAI is an ERC-20 token initiated in late May 2024, boasting a total supply of over 98 billion. Post-launch, the FBI conducted various transactions, depicted in a “bubble map,” to draw in suspects.
Read more: Crypto Scam Projects: How To Spot Fake Tokens
The FBI enlisted companies such as Gotbit, ZM Quant, and CLS Global as market makers to participate in wash trading—a deceptive tactic where traders buy and sell the same asset to artificially inflate its price or liquidity. All three companies have since confessed to their involvement.
“What the FBI uncovered in this case introduces a new twist to traditional financial crime… The FBI took the unprecedented action of creating its own cryptocurrency token and company to identify, disrupt, and hold these alleged fraudsters accountable,” Jodi Cohe, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, stated.
The investigators further announced that individuals who have traded any tokens related to this investigation may contact the FBI for additional information through a notification form.
Disclaimer
In line with the Trust Project guidelines, BeInCrypto is dedicated to objective, transparent reporting. This news article aims to deliver precise and timely information. However, readers should independently verify information and consult a professional before making any decisions based on this content. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
