William J. Jones

I like solving (cypherpunk) puzzles. Director of Investigations & Special Programs @HeightsLabs. Views are my own.

[Boring_Business @BoringBiz_]

Marketing, HR, Legal

[William J. Jones @W_J_Jones]

@jacobincambodia I’m in.

[William J. Jones @W_J_Jones]

The bots are out! This story is literally years old.

[StarPlatinum @StarPlatinum_]

The FBI secretly created a fake crypto token to catch wash traders 🚨

Here’s what’s happening:

The operation was called “Operation Token Mirrors.”

The FBI created a fake crypto company called NexFundAI.

It had:

- a real website
- branding
- an Ethereum token trading on Uniswap

The goal was simple:

catch market makers offering fake volume and wash trading services.

And they actually did.

The DOJ announced:

18 individuals and entities charged and over $25M in crypto seized

The biggest targets included:

- Gotbit
- CLS Global
- ZM Quant
- MyTrade MM
- Saitama executives

According to the DOJ, these firms offered services like:

- fake trading volume
- artificial price pumps
- multi-wallet self trading
- “organic looking” activity
- fake liquidity for exchange listings

One employee allegedly admitted directly:

“I know that it’s wash trading.”

Another described bots doing trades:

“ten times per minute or twenty times a minute”

just to inflate volume and pump prices.

The most insane part:

the FBI’s fake token actually attracted real market makers offering manipulation services.

NexFundAI traded on Uniswap before authorities shut it down.

The SEC later confirmed some firms manipulated the FBI-created token itself.

One of the biggest projects involved was Saitama.

According to prosecutors:

the token reached a $7.5B market cap and insiders secretly sold tokens

Gotbit later admitted it used wash trading to inflate token activity.

Its founder Aleksei Andriunin was arrested in Portugal and extradited to the US

CLS Global also pleaded guilty.

The DOJ says the schemes affected around 60 cryptocurrencies.

The hidden side of the FBI fake token

[William J. Jones @W_J_Jones]

@coinbureau Obviously haven’t ever used Gotham or any other competitors tool… this is childs play and laughable at best compared to Palantir.

[William J. Jones @W_J_Jones]

Will we still help @THORChain in recovering assets… the answer is yes. Because it’s what we do.

[William J. Jones @W_J_Jones]

@somaxbt Feel bad for users but I audibly chuckled when I saw the notification. Laughs in vacation mode 🙃

[William J. Jones @W_J_Jones]

VIBO (Vibes in, Bags out)

[William J. Jones @W_J_Jones]

@tayvano_ VIBO (Vibes in, Bags Out)

[William J. Jones @W_J_Jones]

What in the… 14 hops… through 14 exchanges… this has to be a world record in all the wrong ways.

[William J. Jones @W_J_Jones]

@osint_based Tracing through 14 exchanges is actually magic

[William J. Jones @W_J_Jones]

@tayvano_ What’s even more concerning is the amount of likes it’s getting from all kinds of people that I know and have worked with in a variety of capacities.

[William J. Jones @W_J_Jones]

@tayvano_ @laurashin Oh lawd

[William J. Jones @W_J_Jones]

@binance @cz_binance someone come get their investigator.

[William J. Jones @W_J_Jones]

@MS287g @SpecterAnalyst Misread, tether freezes first (typically via LE request), LE seizes.

[William J. Jones @W_J_Jones]

@tanuki42_ @jpthor Were*

[William J. Jones @W_J_Jones]

@tanuki42_ @jpthor I think he’s alluding that those incidents are facilitated by “deep state actors”🙄

[William J. Jones @W_J_Jones]

@tayvano_ @arjanjohan @SpecterAnalyst I personally know shit SHIT. So between us I think we got it covered 🤝

[William J. Jones @W_J_Jones]

@jerrod_lew I’m also building one! Happy to share login credentials!

[William J. Jones @W_J_Jones]

@tayvano_ @banteg Need to slide you acces to our tool and see what you think.

Needs work but promising.

[William J. Jones @W_J_Jones]

Kim: “Explain yourself.”
Hacker: “They froze the wallet.”
Kim: “How.”
Hacker: “Governance.”
Kim: “…you were beaten by a DAO vote.”
Hacker: nods
Kim: slides labor camp pamphlet across desk

[Arbitrum @arbitrum]

The Arbitrum Security Council has taken emergency action to freeze the 30,766 ETH being held in the address on Arbitrum One that is connected to the KelpDAO exploit. The Security Council acted with input from law enforcement as to the exploiter’s identity, and, at all times, weighed its commitment to the security and integrity of the Arbitrum community without impacting any Arbitrum users or applications.

After significant technical diligence and deliberation, the Security Council identified and executed a technical approach to move funds to safety without affecting any other chain state or Arbitrum users.

As of April 20 11:26pm ET the funds have been successfully transferred to an intermediary frozen wallet. They are no longer accessible to the address that originally held the funds, and can only be moved by further action by Arbitrum governance, which will be coordinated with relevant parties.