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Uzbek man charged with stealing $11.8 million in cryptocurrency
An Uzbek man extradited from Ukraine was arraigned Wednesday in Buffalo on federal charges that he gained unauthorized control of an individual’s cryptocurrency account valued at nearly $12 million.
Nikita Sklyuev, 37, of Uzbekistan, is charged with wire fraud and fraudulent use of unauthorized access devices, according to the U.S. Attorney’s Office.
U.S. Magistrate Judge Jeremiah J. McCarthy unsealed a May 2021 indictment charging Sklyuev with deceiving a Western New York resident into purchasing a computer software application purportedly intended to serve as a cryptocurrency wallet.
Instead, the “malicious” software application was designed to steal the private key to the person’s digital account, according to Assistant U.S. Attorney Douglas AC Penrose, the prosecutor handling the case for the government.
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Once the person entered his private key, similar to a password, on his iPhone in 2018 for his cryptocurrency account, Sklyuev gained unauthorized access to the cryptocurrency wallet, according to Penrose. Sklyuev changed the wallet’s private key, which resulted in the Western New York man losing all control and access to his wallet.
In February 2019, Sklyuev moved cryptocurrency from the wallet to several other online wallets that were under his control, according to the prosecutor. At the time, the cryptocurrency was valued at about $11.8 million.
The charges against Sklyuev, also known as Valeriy Dorojkin, carry a maximum sentence of 20 years in prison and a $250,000 fine. He is being held pending a detention hearing next week.
The hearing followed his extradition from Ukraine last week. According to the U.S. Attorney’s Office, the Justice Department’s Bureau of International Affairs worked with Romanian and Ukrainian authorities to secure his arrest and extradition.
Patrick Lakamp can be contacted at plakamp@buffnews.com
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