US authorities probe alleged '$40 million crypto embezzlement' involving child of government contractor employee

JH Kim

Summary

The U.S. Marshals Service said it is investigating allegations of crypto embezzlement involving about $40 million in virtual assets tied to a federal contractor that manages crypto seized by the government.
The company in question is CMDSS, which provides IT services to the Department of Defense and the Department of Justice and stores and manages virtual assets seized by law enforcement; indications were detected that the CEO’s son accessed a government crypto wallet and moved funds.
U.S. authorities are investigating the funds’ transfer route and the process of granting access permissions, and some say the matter could broaden into a security issue within the government’s seized-asset management system.

The U.S. Marshals Service (USMS) has been found to be investigating allegations of embezzlement involving about $40 million in virtual assets (cryptocurrencies) in connection with a federal contractor responsible for managing crypto seized by the government.

According to crypto-focused U.S. media outlet CoinDesk on the 26th (local time), the center of the allegations is the child of an employee at the government contractor. The firm, CMDSS, provides IT services to the Department of Defense and the Department of Justice and has been responsible for custody and management of virtual assets seized by law enforcement agencies.

On-chain analyst ZachXBT said indications were detected that the son of CMDSS CEO Dean Daghita accessed a government crypto wallet and moved funds. He added, however, that it has not yet been confirmed how access to the wallet was granted or whether the access was conveyed through his father, Dean Daghita.

U.S. authorities are currently examining the funds’ transfer path and the entire process by which access permissions were granted, and some are raising the possibility that the issue could expand into broader security weaknesses in the government’s seized-asset management system.