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 several other tokens held there.

The FBI's use of tokens in investigations has led to accusations of fraud and market manipulation against multiple individuals and organizations.

FBI Wallet Contains a Variety of Tokens

Coinbase executive Conor Grogan identified the FBI wallet address. He discovered that it contained tokens such as EthereumMax, BONE, and several memecoins, all on the Ethereum blockchain.

“I’m not sure if the FBI realized this, but they exposed their wallets. Shortly after launch, the wallet that seeded the FBI wallet deployed capital to several other wallets, making dozens of transactions. FBI wallets own at least 75% of the token supply from what I can tell,” Conor said.

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Conor also discovered that a wallet associated with the FBI contains 1.734 billion Pornrocket tokens. Furthermore, Conor found that the FBI wallet address made several transactions to the Tokenlon, Binance, Zixipay, and HTX exchanges. Currently, this address holds over $39,600 worth of cryptocurrency.

“The FBI is long ETH,” Conor commented.

FBI ID. Source: Arkham

Additionally, on-chain analyst Cygaar discovered that the FBI used code from the OpenZeppelin library without proper attribution, which he noted as a copyright violation.

“Hello FBI, I noticed that your smart contracts are in direct violation of the MIT License, and therefore subject to copyright infringement. You clearly copied several libraries from OpenZeppelin (which use the MIT License), but you do not have a license on the code yourself. The MIT License states that ‘this permission notice must be included in all copies or substantial portions of the Software,’ which you clearly did not adhere to in your agreements,” Cygaar said.

FBI Uses NexFundAI Token in Crypto Bait Operation

According to a DOJ announcement, the FBI developed a crypto token called “NexFundAI” as part of the operation. It then hired market makers to manipulate the token’s market in an effort to gather evidence of illegal activity.

NexFundAI is an ERC-20 token created in late May 2024 with a total supply of over 98 billion. Following the token’s launch, the FBI orchestrated several transactions, mapped out in a “bubble map,” to lure suspects.

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Bubble map of NexFundAI transactions. Source: Bubblemap.

The FBI hired firms including 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 artificially inflate its price or liquidity. All three firms have since pleaded guilty.

“What the FBI uncovered in this case is essentially a new version of an old financial crime… The FBI has taken the unprecedented step of creating its own token and cryptocurrency company to identify, disrupt, and bring these alleged fraudsters to justice,” Jodi Cohe – Special Agent in Charge of the Boston Division of the Federal Bureau of Investigation – said.

Investigators also announced that investors who traded any tokens associated with this investigation can contact the FBI for more information via a notification form.

The article FBI accidentally exposes its wallets and generates criticism from the community appeared first on BeInCrypto Brasil.