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Multiple Tokens, Meme Coins Found in FBI-Linked Wallet
The Department of Justice reports that the FBI created a crypto token, “NexFundAI,” as part of an operation targeting crypto criminals. Recently, the FBI’s wallet address was leaked, revealing various other tokens held in it.
The FBI’s use of tokens in investigations has led to charges of fraud and market manipulation against multiple individuals and organizations.
FBI Wallet Holds a Range of Tokens
Coinbase executive Conor Grogan identified the FBI’s wallet address. He found it holds tokens like EthereumMax, BONE, and several meme coins, all on the Ethereum blockchain.
“Not sure if the FBI realized this, but they doxxed their wallets.Shortly after deployment, the wallet that seeded the FBI wallet deployed capital to multiple other wallets, making dozens of trades. FBI wallets own at least 75% of the token supply from what I can tell.” Conor said.
Read more: What Is a Rug Pull? A Guide to the Web3 Scam
Conor also discovered that a wallet associated with the FBI contains 1.734 billion Pornrocket tokens. Additionally, Conor found that the FBI wallet address had made multiple transactions to Tokenlon, Binance, Zixipay, and HTX exchanges. Currently, this address holds over $39,600 worth of cryptocurrency
“The FBI is long ETH,” Conor remarked.
Moreover, on-chain analyst Cygaar found that the FBI used code from OpenZeppelin’s library without proper attribution, which he noted as a copyright violation.
“Hi FBI, I noticed that your smart contracts are in direct violation of the MIT License, and thus are subject to copyright infringement. You clearly copy pasted several of OpenZeppelin’s libraries (which use the MIT License), but don’t have a license on the code yourself. The MIT License states “this permission notice shall be included in all copies or substantial portions of the Software”, which you clearly did not adhere to in your contracts.” Cygaar said.
FBI Uses NexFundAI Token in Crypto Sting Operation
According to a DOJ announcement, the FBI developed a crypto token named “NexFundAI” as part of the operation. It then hired market makers to manipulate the token market in an effort to gather evidence of illegal activities.
NexFundAI is an ERC-20 token created in late May 2024, with a total supply exceeding 98 billion. After launching the token, the FBI orchestrated multiple transactions, mapped out in a “bubble map,” to entice suspects.
Read more: Crypto Scam Projects: How To Spot Fake Tokens
The FBI engaged firms like Gotbit, ZM Quant, and CLS Global as market makers to engage in wash trading, a manipulative practice where traders buy and sell the same asset to inflate its price or liquidity artificially. All three companies have since admitted guilt.
“What the FBI uncovered in this case is essentially a new twist to old-school financial crime… The FBI took the unprecedented step of creating its very own cryptocurrency token and company to identify, disrupt, and bring these alleged fraudsters to justice,” Jodi Cohe – Special Agent in Charge of the Federal Bureau of Investigation, Boston Division – said
The investigators also announced that investors who have traded any tokens associated with this investigation may reach out to the FBI for more information via a notification form.
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