Groom Lake Founder and CEO Fernando Reyes Jr., known in crypto circles as “FDR”, has been called the “scariest man on-chain”, and for sophisticated hackers and cyber-crime groups going after high-profile protocols and VIPs, it’s probably not too far from the truth.
After all, FDR’s company is comparable to the “Delta Force” of crypto security – if you pull off a hack, and your victim calls on FDR to help, you can be sure that he’ll be coming after you. Hard and fast. And with highly-trained former US military and intelligence specializing in offensive security, forensic investigative techniques and physiological warfare capable of being deployed almost anywhere on the planet in around 24 hours, all it takes is one slip up.
FDR specializes in putting hackers, including solo operators and state-backed groups, under intense pressure from the get-go. Through a combination of military-grade expertise and ruthless determination, chances are you’ll have a team of mean-looking law enforcement officers bursting through your door, pinning you on the ground, stripping you of your ill-gotten gains, well before you manage to cash them out.
So how does he do it? We talked to the man himself and found out why, if you’re a hacker, you definitely don’t want him to be on your tail…
1: Groom Lake describes itself as the “private military corporation” for Web3, which suggests that your company operates in a way that’s comparable to the military. But why do Web3 companies/protocols/investors need military-grade security?
Groom Lake functions as both a proactive and reactive component to prevent or respond, with extreme prejudice, to exploits and hacks. When you look at the typical perpetrator, it comes down to either an insider threat or a nation-state actor – with Lazarus Group exemplifying this threat for the latter.
We conducted Operation Ural Spectre, uncovering an Advanced Persistent Threat (APT) operated by Lazarus in the Russian Far East, using on-chain forensics and OSINT (open-source intelligence) to expose their tactics and conduct a proper counteroffensive. The group exploited VPN misconfigurations and utilized OFAC-sanctioned wallets to launder assets – which highlights the central reason of why North Korean state actors continue to perpetrate crypto hacks in the face of mounting sanctions and inaccessibility to the global financial system.
You can see historically that these attacks are not isolated but represent a growing trend of state-level actors targeting protocols, exchanges, and high-net-worth individuals. As the industry moves into a bull market, the financial incentives for these groups increase, raising the stakes for their targets. In fact, there’s a direct correlation in data between highly volatile, active markets and the amount of assets exploited by nation-state threats.
When Groom Lake offers military-grade security, we are telling the industry that if you want to counteract these threats, you have to operate at the same level or higher in terms of capability – with advanced intelligence, rapid response, and offensive security tactics which we’ve proven from our time at the NSA or Army Cyber Command can neutralize groups like Lazarus.
2: How likely is it that one of your average customers is going to face some kind of critical security threat?
It’s highly likely. The likelihood is exacerbated because the security focus in Web3 historically has fully centered around smart contract risk, and the solutions have always been static, point-in-time products like audits – and what normally happens as a result is that people give up when these audits fail to catch critical vulnerabilities, and they view the likelihood of further recovery and investigation as something to leave to slow-moving bureaucrats in law enforcement.
The reality is that customers face threats across multiple angles, including phishing, SIM swaps, insider threats, and these conventional smart contract exploits. So, protocols really need to consider both sides of the spectrum – traditional security best practices and smart contract security, which Groom Lake has also spearheaded through products like Drosera.
3: Your presentation repeatedly emphasizes the need for a plan of action and rapid speed when responding to security incidents, and it claims you can have an operative on the ground, anywhere in the world in 48 hours or less. Why is this so important, and what kind of impact does this speedy response have on the success of your investigations, compared to just rolling up a few days later?
48 hours is long for us, normally it’s 24. Time is critical in incident response – the longer the victim delays actions, the more likely it is they’ll suffer permanent fund loss or collateral damage. It’s like that show ‘“The First 4*”, where you always see these detectives and law enforcement professionals racing to accomplish key milestones within the first 48 hours of a murder. Things are fresh, the perpetrator is more likely to make mistakes, and so on. The secret to this game is that psychological warfare, shock and awe, and the silent pressure of being hunted are valuable components of achieving victory.
We demonstrated this to powerful effect in London with British authorities in Operation Hidden Forge — our team led the charge to trace funds, locate the perpetrator, and surveil his movements until the arrival of authorities. If the client, or Groom Lake, hadn’t acted swiftly – who knows what would have resulted or where the perpetrator would have escaped to.
4: In your Operation Wavefront case study, it says you used OSINT to track down a developer who had freshly minted millions of new tokens and sold them on exchanges. What kind of OSINT did you rely on? What steps were taken to identify this person, how many people were involved in this process and how long did it take?
Groom Lake never fully discloses its TTPs (Tactics, Techniques, and Procedures) – but at a surface level, we combined open-source intelligence (OSINT) with blockchain forensics to identify the developer. There was a GitHub API leak that revealed the email of the perpetrator that was further linked to the primary suspect’s Ethereum wallet. This email was tied to public business reviews that disclosed the name of the perpetrator, which we verified using LinkedIn and other social media. On-chain analysis allowed us to trace the movement of stolen tokens through exchanges and wallets, building a complete profile. Our team reached key conclusions within hours of being activated for the operation, and we deployed shortly thereafter.
Normally for these operations, it’s handled at the strategic level by members of the Intelligence Shop for Phase 1, then as we prepare to deploy we send a single primary operative to the region, who then meets with secondary Groom Lake assets on the ground in the host country.
5: Besides catching the culprit, did you offer the project in the above case any assistance in terms of mitigating the impact of what happened (exchanges being flooded with tokens, sending the price crashing)? If so, what did you do?
In similar cases, Groom Lake has coordinated with exchanges to freeze transactions, recover funds, and prevent further token sales. Additional measures may include analyzing liquidity impacts and advising projects on recovery strategies to stabilize token prices – overall, you’re paying Groom Lake to be your shock and awe and the ‘tip of the spear,’ not so much to be lawyers or negotiators, per se.
6: Your case studies focus on how you have assisted protocols, but you also offer services to VIPs and whales. How different is the nature of the threats faced by VIPs and whales, and how do you protect them against these threats?
Groom Lake covers an even greater scope of potential risk for VIPs and whales – they primarily face threats on the traditional security side such as targeted phishing, SIM swaps, and social engineering attacks. Our skill set at Groom Lake already caters to this in a primary way, but we’ve developed proprietary tools like REAPER (a custom threat intelligence feed for clients in real time) that proactively monitors these risks and safeguards clients.
7: Have you helped any whales/VIPs who were hacked before? If so, can you tell us about it?
Yes, though details remain confidential. Groom Lake has successfully recovered assets for high-profile clients through swift fund tracing, collaboration with exchanges, and leveraging global intelligence networks. Specific cases can only be disclosed with client consent.
But I can tell you. It’s all about information. We have helped whales and VIPs in a myriad of ways. Some end up in a more straightforward solution of conducting an investigation, providing the report to authorities and identifying exchanges that funds are being offloaded to. In special circumstances, we organize deployments to go after the individuals in joint operations with law enforcement, resulting in arrests.
These deployments require different approaches and utilize everything from psychological warfare to off-chain intelligence to find out everything possible about the target. We have even helped VIPs who have been targeted and threatened by competitors – by DOXing the targets and helping the client to maneuver accordingly with the newfound information.
These cases usually result in retaining our proactive services to make the odds of this happening again very low.
8: What are the most beneficial security best practices that every protocol and whale should employ, and which, if any, are not really that useful?
Universal security should be built in as you go. There are some fundamental, high-risk platforms like Twitter, Discord, GitHub, Google Workspace, and more that are often neglected as teams focus on development rather than securing what’s already in place. Key measures include implementing multi-factor authentication (MFA) through authenticator apps (avoiding SMS-based MFA due to the risk of SIM swapping), diligently verifying links before clicking, conducting regular access audits, and enforcing the principle of least privilege (POLP) to prevent “shadow IT” — users who misuse excessive permissions.
For whales, the security landscape differs. Without enterprise systems, their primary attack surface is themselves. High-profile individuals are common targets for vishing (voice phishing) and traditional phishing attempts. To mitigate these risks, always verify the identity of anyone contacting you, understanding that phone numbers can be spoofed. If in doubt, hang up and call the person back directly — outbound calls are difficult to spoof unless the target has been SIM swapped. Adding extra security measures with your mobile carrier can further reduce SIM swap risks. Additionally, whales should safeguard their digital assets using MFA through authenticator apps instead of SMS-based methods.
The basics remain critical for a reason, and if further support is needed, Groom Lake is available to assist with both preventative strategies and incident response.
9: Is there any kind of scenario where Groom Lake might struggle to investigate/catch the bad guys? If so, what are you trying to do to address this deficiency?
Cold-cases, or ones where that initial period of attack has significantly passed, are always more difficult and result in a lower chance of recovery – funds were likely spent, or off-ramped, or the perpetrator has sufficiently covered their tracks, for example. Challenges further arise with highly anonymized attacks or when facing state-backed operatives. However, Groom Lake collaborates with law enforcement, international agencies like INTERPOL, and leverages proprietary tools to minimize these barriers.
At Groom Lake, we utilize the same analytic standards and processes used in the U.S. intelligence community, specifically ICD 203. This framework was developed after the intelligence failures surrounding WMD assessments during the 2003 Iraq War, ensuring our estimates and spot reports (spotreps) meet the highest possible standard of reliability.
Our team includes NSA-trained operatives who apply this extremely rigorous methodology to their work, bringing a level of precision and accountability that surpasses what is typical in most civilian firms.
By adhering to these military-grade standards, we deliver security solutions capable of addressing the unique and complex threats facing Web3 ecosystems.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
