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Dutch police arrest suspect in Electrum Bitcoin Wallet scam

The Dutch police detained a 39-year-old man on suspicion of laundering cryptocurrencies valued at tens of millions of euros that had been taken in phishing scams. By closely collaborating with the nation’s central cybercrime squad to track down individual bitcoin transactions, “Politie Gelderland” (Eastern) was able to locate the man in the town of Veenendaal.

On September 6, 2022, early in the morning, the police made the arrest and confiscated equipment and “data carriers” to support their ongoing inquiries.

The announcement states that the police “seized in cryptocurrencies the estimated profit that the man obtained from money laundering,” indicating that they also seized digital assets.

The culprit was freed on September 8, 2022, but he or she is still being investigated by the authorities.

According to a press release from the police, authorities were able to find the culprit by using cryptocurrency that had been taken through a malicious software update for the Electrum wallet.

With features like smart recovery, cold storage, exporting, and support for third-party plugins, Electrum is a well-known open-source Bitcoin wallet tool that enables users to safely manage their digital assets.

According to reports, criminals spread this malicious Electrum update using phishing assaults, despite the fact that they did not disclose many further specifics about the attack.

There are little facts available about this fake Electrum update, but it’s conceivable that it installed information-stealing malware that allowed infected victims to lose their cryptocurrency wallets. For instance, several information thieves currently support Electrum exfiltration, including the just-released Raccoon Stealer 2.0.

Using modified wallets or phishing scams to obtain the seeds or recovery phrases needed to restore an existing wallet on a new device has also grown in popularity among threat actors.

A threat actor can recover a victim’s wallet on their own devices and take all of the cryptocurrency it contains once they have access to the victim’s seed phrase.

For TrustWallet, Metamask, Ledger, and Trezor wallets, recovery/seed phrases have been taken numerous times using phishing, bogus updates, and modified hardware devices.

The suspect is then said to have taken the money to Bisq, a decentralised peer-to-peer exchange network that enables users to trade between different cryptocurrencies without the need for registration or KYC (know your customer) information.

To hide the money trail and allow threat actors to exchange Bitcoin for Monero without worrying about being caught, the person utilised Bisq to trade Bitcoin for the hard-to-trace privacy coin.

Bisq is an open-source initiative designed to assist bitcoin investors in safeguarding their anonymity, much as the recently approved Tornado Cash platform. Unfortunately, it can also be used maliciously and abused.

According to the Dutch police, the phishing assaults using malicious Electrum software were originally brought to their attention by “Electrum-users from the Netherlands and Italy,” who reported them to the authorities.

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