Ronald Spektor, a 23-year-old man from Brooklyn, New York, has been sentenced to 12 years in prison after pleading guilty to his role in a scheme that stole $16 million in cryptocurrency from users of Coinbase, America's largest crypto exchange.

Operating under the online alias "lolimfeelingevil," Spektor posed as a representative of the exchange and told victims their accounts were under threat from hackers, according to a statement from the Brooklyn District Attorney's Office. He then used social engineering — a tactic in which scammers manipulate victims into sending funds or handing over valuable information — to persuade them to transfer their holdings into what they believed was a secure new wallet.

Spektor controlled that wallet, emptied it, and laundered the proceeds through swapping and mixing services and crypto gambling sites, with some victims losing $1 million or more. Laundering methods like these are intended to obscure where stolen funds end up, yet the prosecution demonstrates that they did not stop investigators from following the money.

"Our Virtual Currency Unit painstakingly pieced together the digital proof that identified the defendant behind this sophisticated scheme, followed the money that he stole and compiled iron-clad evidence against him," District Attorney Gonzalez said in a Wednesday statement. "This case should put crypto scammers on notice: we will follow the digital trail wherever it leads and aggressively pursue those responsible."

Investigators with the DA's Virtual Currency Unit linked Spektor's home IP address to several of the victims' wallets, showing how wallet activity can be connected to a suspect's real-world identity. They also found that he recruited accomplices on online forums and bragged about his thefts on a Telegram channel under the handle "@lolimfeelingevil." In recovered messages, he claimed to have gambled away $6 million in crypto. After fraud allegations surfaced online, he disposed of a hardware wallet and bought a new one.

Spektor pleaded guilty on September 2 to all 31 counts, including first-degree money laundering and grand larceny. Justice Danny Chun imposed the promised sentence over prosecutors' objections, as they had sought a term of seven to 21 years. Spektor must also forfeit more than $500,000 in assets and pay nearly $16 million in restitution — meaning the forfeited amount covers only a fraction of what he has been ordered to repay victims.

Officials reminded the public that Coinbase will never call customers or ask them to move funds to a "safe wallet."

This article was first published by Bitcoin Magazine and is written by Mathew Di Salvo.