A White Plains man has been arrested on charges that he hacked into hundreds of cryptocurrency accounts and transferred funds to an account he and another man controlled.
A U.S. Secret Service agent arrested Anthony Tyler Nashatka, also known as “Psycho,” Sept. 6 at an apartment in One City Place at City Center.
He did not contest his identity when he was brought before U.S. Magistrate Judge Lisa M. Smith, but he did not concede the “psycho” sobriquet.
Smith released him on $200,000 bail and ordered him to appear next month in federal court in San Francisco, where he and Elliott Gunton, also known as “Planet” and “Glubz,” were indicted in August on computer fraud charges.
The government does not say how much money they allegedly took but one victim, according to the indictment, lost $800,000.
The alleged scheme operated over seven days in December 2017, and comprised several steps. They are accused of using deceptive techniques to gain access to email accounts, the EtherDelta currency exchange and Cloudflare, a San Francisco company that operated computer servers for EtherDelta.
Here’s how the indictment describes an alleged hack on an individual identified as Z.C. The tech news site ZDNet.com reported that Z.C. could be Zachary Coburn, EtherDelta’s CEO, “as only his accounts would have allowed the hacker to do what they did next.”
Nashatka bought personal information about Z.C. and he sent the phone number and email address to Gunton.
Gunton convinced a support operator at Z.C.’s cellphone provider to forward calls to the men’s Google Voice number.
Using Z.C.’s cellphone number, they gained access to Z.C.’s email account.
They redirected the domain setting to an IP address registered to a company in the United Kingdom, where Gunton lives, enabling them to conceal emails sent to Z.C. about account intrusions.
They gained access to EtherDelta’s account with Cloudflare and changed the domain settings to a fake website resembling EtherDelta’s site.
They disabled access to Cloudflare’s servers, so when EtherDelta customers logged into the fake website, Nashatka and Gunton could get customers’ cryptocurrency addresses and private keys.
Then they withdrew cryptocurrency from Z.C.’s account and deposited it in an account they controlled.
The indictment, based on these alleged actions, accuses the men of conspiracy to commit computer fraud and abuse, transmission of information or code to cause damage to a protected computer, unauthorized access to a protected computer to obtain value, conspiracy to commit wire fraud, and aggravated identity theft.
The charges carry maximum imprisonment ranging from two to 20 years and maximum fines up to $250,000. The government is also seeking forfeiture of property used in committing the alleged crimes or derived from the crimes.
Nashatka’s San Francisco federal court appearance is scheduled for Oct. 10.
His personal recognizance bond was co-signed by Janet Leigh Tessman of Flint, Michigan, and by his father, Mel A. Nashatka of Vassar, Michigan.
Judge Smith put several conditions on Nashatka’s release.
Nashatka, 20, must reside with his father until he turns himself in at San Francisco court. He must reside in a place that has no internet access. He may not use the internet or allow anyone to use it on his behalf, except for making travel arrangements for his court appearance. He may not buy any internet-capable electronic devices.
He is subject to a curfew at his father’s home, from 6 p.m. to 8 a.m. He may not apply for a passport.
Gunton, 19, of Norfolk, England was sentenced in the U.K. in August in a similar case, according to a BBC news article, for hacking a telecommunications firm when he was 16 and stealing personal data in exchange for cryptocurrency.
He admitted charges of computer misuse and money laundering, in Norwich Crown Court, and he was sentenced to jail for 20 months and ordered to pay back 407,359 British pounds, or about $509,000.