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FSB officer admits using malware to steal $2m worth of crypto

A high-ranking officer at the Federal Security Service (FSB) of Russia confessed to stealing digital currency with malware a Russian hacker provided.

Dmitry Demin, a now-former lieutenant colonel of the FSB, pleaded guilty in a large-scale fraud case. Demin admitted that from April till December of 2021, he stole 68.5 bitcoins.

Using the average price of bitcoin for 2021, the amount FSB officer stole translates to over $2m. At the time of his arrest, Demin was the FSB’s deputy head for Russia’s southern region of Samara, writes Kommersant.

The officer got into stealing crypto after he arrested a hacker in the Russian town of Syzran. The cybercriminal used malware to steal crypto wallet credentials. After the arrest, the hacker gave the passwords and malware to Demin.

The FSB officer kept the passwords to himself and used the malware to steal bitcoins, taking over where the hacker he was supposed to arrest left. Russian media says that Demin’s crime cost 187.3m rubles.

According to trial material seen by journalists, Demin likely acted in tandem with other FSB officers, pointing to a large-scale cyber fraud within the agency. The FSB is the primary security agency of Russia, a successor to the KGB.

The conflation of Russia’s security service and hackers has long been suspected. For example, conversations between Conti ransomware gang members, revealed by a disgruntled insider, revealed the gang was keeping in touch with the FSB.

Experts believe that major ransomware attacks against critical infrastructure in the West might have had more than just a financial aspect to them, implying that threat actors were testing the resilience of systems responsible for the supply of food and energy.

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