U.S. Court Orders Forfeiture of $125,000 in Stolen Cryptocurrency Traced to Nigerian Nationals
By Folashade Ogunrinde
May 22, 2025
In a significant legal ruling, a U.S. district court has mandated the forfeiture of $125,000 in cryptocurrency that was stolen from an American citizen and traced back to three Nigerian nationals. The decision, announced by the Eastern District of Tennessee in Chattanooga on April 30, comes after a lengthy period during which the Nigerians attempted to avoid any claims related to the assets.
Background of the Case
The stolen cryptocurrency was linked to a fraud case involving Matthew McNulty, a Tennessee resident who was duped in 2021. According to court documents, McNulty was tricked into providing his login information on a counterfeit website that posed as a legitimate service. The fraudulent website, which was reportedly managed from Nigeria, led to the swift transfer of McNulty’s assets out of his digital wallet.
FBI Agent Jordan Foreman played a crucial role in tracing the stolen funds. In an affidavit submitted to support the U.S. government’s forfeiture request, Foreman detailed how he tracked the movement of the assets using open-source methods, revealing a trail of conversions into various cryptocurrencies and multiple wallet transfers, ultimately leading to three Binance accounts linked to Nigerians Martins Eromosele Iyere, Moses Olumide Sokale, and Olawumi Stephen Adewale.
Court Findings
The court found compelling evidence pointing to wire fraud and money laundering in the transactions connected to the seized assets. Agent Foreman stated that the intricate patterns of withdrawals and transfers aligned with common tactics used to launder money and conceal the proceeds of criminal activity. Consequently, U.S. District Judge Travis McDonough ruled in favor of the government, ordering the forfeiture of the cryptocurrency to prevent the defendants from benefitting from their alleged crimes.
Details of the Fraud Scheme
The fraudulent scheme commenced on February 12, 2021, when McNulty sought assistance on a Telegram channel dedicated to cryptocurrency trading. His plea attracted the attention of an impersonator masquerading as a community manager. This fraudulent account directed him to a bogus website where he entered sensitive information. After submitting his login credentials, the scammer prompted McNulty to generate a QR code and share it. The scammer then executed the theft, transferring funds out of McNulty’s wallet almost immediately.
The laundered funds subsequently reached Binance accounts associated with Iyere, Sokale, and Adewale, drawing scrutiny from law enforcement agencies investigating the intricate web of cryptocurrency fraud. Binance, a prominent cryptocurrency exchange, has been popular among users in Nigeria despite facing regulatory pressures from the Nigerian government, which has intensified since President Bola Tinubu’s administration took office.
U.S. Government’s Efforts to Notify Defendants
The U.S. government seized the cryptocurrency assets on April 18, 2022, but efforts to reach the Nigerians about the proceedings fell flat. They attempted to contact the defendants via email and even published a notice of forfeiture on the government’s official website for a duration of 30 days. Due to the lack of response or challenges to the government’s claims, the court ruled for a summary judgment in favor of the U.S. government.
Broader Implications of Cryptocurrency Fraud
The rise of cryptocurrency offers both opportunities and vulnerabilities, unfortunately making it a favored medium for fraudsters. The irreversible nature of the transactions and the ability to swiftly transfer value globally further compound the risks. According to a report from the FBI’s Internet Crime Complaint Center (IC3) in 2024, losses from cryptocurrency fraud soared to over $5.6 billion in 2023—a staggering 45% increase from the previous year. In a related incident, a recent scam in Nigeria involving the Crypto Bridge Exchange (CBEX) reportedly defrauded investors of over 1.3 trillion naira.
As authorities continue to battle the increasing wave of cryptocurrency-related fraud, this case serves as a reminder of the vulnerabilities inherent in the digital economy and the ongoing global effort to combat financial crimes.
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