U.S. Government Takes Action Against Online Marketplaces Selling Fraudulent Identity Documents to Cybercriminals
The U.S. Attorney’s Office for the District of New Mexico announced the execution of a court-authorised seizure of two domain names and an affiliated blog linked to VerifTools, an online marketplace that sold counterfeit driver’s licences, passports, and other identity documents issued by various states and countries. Since its inception in 2020, VerifTools exploited the anonymity provided by cryptocurrency and underground DNS infrastructures to facilitate identity fraud on a global scale. The seizure of the VerifTools domains has effectively blocked approximately $6.4 million in sales of fake identification documents. The Federal Bureau of Investigation (FBI) employed DNS sinkholing and Tor forensics in this operation, which involved collaboration between U.S. and Dutch law enforcement agencies to address identity theft and money laundering charges.
Initiated in August 2022, Operation Iron Seal uncovered a conspiracy to exploit stolen Personally Identifiable Information (PII) for unauthorised access to cryptocurrency accounts and illicit blockchain transfers. VerifTools advertised counterfeit digital and physical IDs for all 50 U.S. states and various foreign jurisdictions, accepting payments in Bitcoin (BTC) and Monero (XMR) through privacy-enhanced wallets. Court filings revealed that the marketplace generated at least $6.4 million in illicit proceeds. FBI agents verified VerifTools’ backend source code through a controlled purchase of counterfeit New Mexico driver’s licences, priced at just $9 each. The operators obscured transaction trails and server locations using cryptocurrency mixing services and Tor-based hidden services. The FBI’s Albuquerque Field Office led the technical takedown, employing advanced cyber forensics techniques to dismantle the platform and protect the public from fraud and identity theft.
Categories: Cybercrime, Identity Fraud, Law Enforcement Operations
Tags: Seizure, Domain Names, VerifTools, Counterfeit, Identity Fraud, Cryptocurrency, FBI, Dark Web, Money Laundering, Operation Iron Seal