The $245 million cryptocurrency theft has reached a US court: 22-year-old Singaporean citizen Malone Lam has pleaded guilty to leading a group that stole 4,100 BTC and other digital assets, then spent the money on a luxurious lifestyle.
How the Group Gained Access to Crypto Assets
According to the US Department of Justice, the scheme operated from October 2023 to May 2025. Participants hacked databases and collected personal data of crypto investors, then pressured victims through social engineering. Essentially, it was fraud with elements of phishing: people were convinced to disclose their logins, private keys, and other wallet access data themselves.
Cryptocurrency became the main target of this group because control over the private key essentially opens the way to the assets. If authentication is weak and multi-factor authentication does not protect critical accounts, a single cybersecurity vulnerability can result in loss of funds. Malware can also be used in such crimes, but in this scheme, deception, account hacking, and pressure on asset owners played the key roles.
Main Methods of Cryptocurrency Theft
- Phishing: the victim is convinced to follow a fake link or enter wallet credentials on a fraudulent website.
- Social engineering: scammers apply psychological pressure and force a person to disclose logins, private keys, or access codes themselves.
- Malware: a program can intercept data, substitute a wallet address, or gain access to a device.
- Account hacking: criminals gain control over email, cloud service, or an account linked to a crypto wallet.
- SIM swapping: attackers intercept a phone number and gain access to confirmation codes.
- Smart contract attacks: a vulnerability in the code can open the way to withdraw digital assets.
Episode With a Hardware Wallet
One of the most telling episodes occurred in New Mexico. An accomplice of Malone Lam broke into the victim’s home and took a hardware wallet, while the organizer himself tracked the owner’s movements through a hacked iCloud account. Thus, the digital attack turned into a physical intrusion, and the crime went far beyond ordinary online fraud.
“This defendant led an international network that preyed on victims through deception, invaded their private lives, and stole hundreds of millions of dollars in cryptocurrency,” said US Attorney Jeanine Ferris Pirro.
Where the Stolen Bitcoins Went
The group grew out of a circle of online gamers who met on the internet and decided to join forces for cybercrime. The stolen bitcoins were laundered and then spent on a luxurious lifestyle:
- private jet rentals;
- purchase of expensive real estate in Los Angeles;
- purchase of expensive real estate in Miami;
- parties costing up to $500,000 per night.
Malone Lam was detained in 2024 in a rented house in Miami.
Bitcoin and Ethereum are stored and moved through the blockchain, so the transfer of digital assets is different from a typical bank transaction. An online digital currency exchange service can become part of the withdrawal chain if criminals try to cover their tracks. That is why crimes in the field of information technology increasingly require investigators to understand crypto wallets, exchanges, smart contracts, and digital masking methods.
Why the Bitcoin Network Is Considered Nearly Unhackable
Bitcoin is protected not by a single server, but by a distributed network and cryptography. To alter already confirmed transactions, an attacker would have to gain control over a huge portion of the network’s computing power and rewrite the blockchain faster than the rest of the participants. In practice, such an attack requires colossal resources and immediately becomes noticeable to the network.
Therefore, it is more common to hack not bitcoin itself, but the people, devices, and services around it: crypto wallets, exchanges, email, cloud accounts, and weak authentication methods.
How to Know if Cryptocurrency Has Been Stolen
- An outgoing transaction appears in the wallet that the owner did not make.
- The balance suddenly decreases or assets are sent to an unfamiliar address.
- Notifications arrive about account login, password change, or security being disabled.
- Access to email, cloud, exchange, or wallet suddenly disappears.
What to Do First
- Immediately block or change passwords for email, exchanges, cloud services, and linked accounts.
- Disconnect compromised devices from the network and check them for malware.
- Transfer remaining assets to a new secure wallet if access is still available.
- Save transaction hashes, wallet addresses, correspondence, notifications, and other traces of the attack.
- Contact the support team of the exchange or service through which funds may have been withdrawn.
- Submit the collected data to law enforcement agencies.
Is It Possible to Recover Stolen Cryptocurrency
Recovering stolen digital assets is difficult, but there is a chance if you act quickly. Blockchain allows you to see the movement of funds, and exchanges and online digital currency exchange services can help stop the withdrawal if the assets have not yet moved further down the chain.
The likelihood of recovery depends on the speed of response, the quality of the collected evidence, the route of the funds, and whether the stolen assets ended up on a platform where transactions can be frozen. The faster transactions are recorded and data is passed to services and investigators, the higher the chance of stopping some of the funds.
How to Search for Access to a Lost Bitcoin Wallet
If the wallet was not stolen but access to it is lost, the search usually starts with backups, seed phrases, old devices, wallet files, password managers, and records where recovery data might have been stored.
The main limitation is that the private key or seed phrase essentially serves as access to the assets. If they are completely lost and there is no backup, recovering the wallet is extremely difficult: the bitcoin network does not store the user’s password and cannot issue a new key.
How to Protect Cryptocurrency From Theft
- Store large amounts on a hardware wallet, not in a constantly connected online wallet.
- Keep the seed phrase and private keys offline, separate from your phone, email, and cloud services.
- Enable two-factor authentication for exchanges, email, and other important accounts.
- Regularly update wallet, device, and browser software.
- Check the website address, links, and domains before entering your login, password, or seed phrase.
- Never give your private keys, confirmation codes, or seed phrase even to those claiming to be support staff.
The criminal laws of different countries are gradually adapting to such schemes. Russia is also facing a rise in crypto fraud: the Bank of Russia warns about the risks of digital asset transactions, and the Investigative Committee of the Russian Federation investigates crimes where the internet becomes the main attack environment. Against this background, major market crises, including FTX (company), are recalled, and discussions are held on how artificial intelligence can help both protect users and create more sophisticated fraud schemes.
Social engineering is a way to gain access to confidential information through psychological pressure and deception, rather than direct technical hacking. A hardware wallet is a physical device for storing private keys offline; it is considered one of the most reliable ways to protect crypto assets because it is not constantly connected to the internet.
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