Groom Lake’s Founder & CEO Fernando Reyes On Why Web3 Needs Military-Grade Security

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. 

FDR’s company is akin to the “Delta Force” of cryptocurrency security. If you manage to pull off a hack, and your victim enlists FDR’s help, rest assured he’ll be on your trail, and he won’t be gentle. Equipped with highly skilled former U.S. military and intelligence personnel, adept in offensive security, forensic investigation, and psychological warfare, his team can be dispatched almost anywhere globally within about 24 hours, waiting for just one critical mistake from you. 

FDR excels in putting immense pressure on hackers, whether they are lone operators or state-sponsored entities. Combining military-level expertise with unwavering determination, his approach often results in law enforcement storming the hacker's premises, securing the stolen assets, and apprehending them long before they can convert their gains. 

Curious about his methods, we spoke to him directly to understand why hackers dread having him on their heels… 

1: Groom Lake calls itself the "private military corporation" of Web3, implying your operations resemble those of the military. Why do Web3 companies, protocols, and investors require military-level security?

Groom Lake acts both as a preventive and reactive force, ready to tackle exploits and hacks with extreme measures. Typically, these threats originate from insiders or are state-sponsored, like the notorious Lazarus Group. 

Through Operation Ural Spectre, we exposed an Advanced Persistent Threat (APT) led by Lazarus in the Russian Far East, utilizing blockchain forensics and OSINT to uncover their strategies and counteract them. They exploited VPN flaws and used wallets sanctioned by OFAC to launder assets, underscoring why North Korean agents continue to hack crypto despite sanctions and limited access to global finance.

These incidents are not isolated but reflect a growing trend of state actors targeting protocols, exchanges, and wealthy individuals. As the market becomes bullish, the financial incentives for these groups grow, increasing the risks for their targets. Data shows a direct correlation between active, volatile markets and the volume of assets exploited by nation-state threats.

By offering military-grade security, Groom Lake assures the industry that countering these threats demands capabilities on par with or exceeding the attackers’—using advanced intelligence, swift responses, and offensive tactics proven effective during our time with the NSA or Army Cyber Command against groups like Lazarus.

2: How probable is it that an average client of yours will encounter a significant security threat?

It's very probable. The risk is heightened because the Web3 security focus has traditionally been on smart contract risks, relying on static, one-time solutions like audits. When these audits miss critical vulnerabilities, people tend to lose hope, assuming recovery and investigation are slow processes handled by bureaucratic law enforcement.

In reality, threats come from various angles, including phishing, SIM swaps, insider threats, and typical smart contract exploits. Thus, protocols must consider both traditional security practices and smart contract security, an area where Groom Lake leads with products like Drosera.

3: Your presentation repeatedly stresses the importance of having an action plan and acting quickly during security breaches. You claim to deploy operatives globally within 48 hours or less. Why is this speed crucial, and how does it enhance the success of your investigations compared to arriving a few days later?

48 hours is actually long for us; we usually deploy within 24 hours. Timing is everything in incident response—the longer actions are delayed, the higher the risk of permanent fund loss or collateral damage. It's similar to the show “The First 48,” where detectives rush to achieve key milestones early in a murder investigation. The situation is fresh, and the perpetrator is more prone to errors. The secret lies in psychological warfare, creating shock and awe, and applying silent pressure on the target.

In London’s Operation Hidden Forge, we demonstrated this effectively by collaborating with British authorities. Our team led efforts to trace funds, track the suspect, and monitor his activities until authorities arrived. Had the client or Groom Lake not acted swiftly, the outcome could have been different or the suspect might have escaped.

4: In your Operation Wavefront case study, you mention using OSINT to track down a developer who created and sold millions of new tokens. What kind of OSINT was used? What steps were taken to identify this individual, and how many people were involved in the process? How long did it take?

Groom Lake never fully discloses its TTPs (Tactics, Techniques, and Procedures), but on the surface, we combined OSINT with blockchain forensics to identify the developer. A GitHub API leak exposed the perpetrator's email, linking it to the main suspect's Ethereum wallet. This email was associated with public business reviews that revealed the suspect's name, which we verified using LinkedIn and other social media. On-chain analysis helped us track the stolen tokens through exchanges and wallets, forming a complete profile. Our team drew key conclusions within hours of activation and deployed soon after.

Typically, these operations are managed strategically by the Intelligence Shop during Phase 1. As we prepare to deploy, a primary operative is sent to the region to meet with additional Groom Lake assets on the ground in the host country. 

5: Besides identifying the culprit, did you assist the project in mitigating the impact of the incident (such as exchanges being flooded with tokens, causing price crashes)? If so, what actions did you take?

In similar scenarios, Groom Lake collaborates with exchanges to freeze transactions, recover funds, and halt further token sales. Additional actions may involve analyzing liquidity impacts and advising projects on recovery strategies to stabilize token prices. Essentially, Groom Lake serves as the 'shock and awe' or 'tip of the spear,' rather than acting as legal advisors or negotiators.

6: Your case studies highlight your support for protocols, but you also offer services to VIPs and whales. How do the threats these individuals face differ, and how do you protect them?

Groom Lake addresses a broader range of risks for VIPs and whales, who primarily face traditional security threats like targeted phishing, SIM swaps, and social engineering attacks. Our expertise at Groom Lake covers these areas, and we have developed proprietary tools like REAPER, a real-time threat intelligence feed, to proactively monitor and protect clients from these risks.

7: Have you assisted any whales/VIPs who were previously hacked? If so, can you share any details?

Yes, but specifics remain confidential. Groom Lake has recovered assets for high-profile clients through swift fund tracking, exchange collaboration, and leveraging global intelligence networks. Details can only be shared with client consent.

However, I can tell you that it’s all about information. We’ve assisted whales and VIPs in numerous ways, sometimes involving straightforward investigations, providing reports to authorities, and identifying exchanges where funds are offloaded. In special cases, we organize joint operations with law enforcement to apprehend suspects, leading to arrests. 

These deployments require various approaches, employing everything from psychological warfare to off-chain intelligence to gather comprehensive information on the target. We have even assisted VIPs threatened by competitors by revealing the identities of the threats and helping clients navigate the situation with this new information.

Such cases usually lead to clients retaining our proactive services to significantly reduce the likelihood of recurrence.

8: What are the most effective security best practices every protocol and whale should implement, and which ones are less useful?

Security should be integrated as you develop. High-risk platforms like Twitter, Discord, GitHub, and Google Workspace are often overlooked as teams focus on development rather than securing what exists. Essential measures include using multi-factor authentication (MFA) through authenticator apps (avoiding SMS-based MFA due to SIM swap risks), verifying links before clicking, conducting regular access audits, and enforcing the principle of least privilege (POLP) to prevent "shadow IT" — users misusing excessive permissions.

For whales, the security landscape differs. Without enterprise systems, their main vulnerability is themselves. High-profile individuals are frequent targets of vishing (voice phishing) and typical phishing attacks. To mitigate these risks, always verify the identity of anyone contacting you, as phone numbers can be spoofed. If uncertain, hang up and call back directly—outbound calls are hard to spoof unless a SIM swap has occurred. Adding extra security measures with your mobile carrier can further reduce SIM swap risks. Whales should also secure digital assets using MFA via authenticator apps instead of SMS-based methods.

The basics are vital for a reason, and if additional support is needed, Groom Lake is ready to assist with both preventive strategies and incident response.

9: Are there any scenarios where Groom Lake might struggle to investigate or catch perpetrators? If so, how are you working to overcome these challenges?

Cold cases, or those where significant time has passed since the initial attack, are always challenging and result in lower chances of recovery—funds may have been spent or off-ramped, or the perpetrator might have effectively covered their tracks. Further difficulties arise with highly anonymized attacks or state-sponsored operatives. Nevertheless, Groom Lake partners with law enforcement, international agencies like INTERPOL, and employs proprietary tools to reduce these barriers.

At Groom Lake, we employ the same analytical standards and processes used in the U.S. intelligence community, specifically ICD 203. This framework was developed after the intelligence failures regarding WMD assessments during the 2003 Iraq War, ensuring our estimates and spot reports (spotreps) meet the highest reliability standards.

Our team includes NSA-trained operatives who apply this rigorous methodology to their work, providing a level of precision and accountability that surpasses 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.

Important Links:
Website: https://groomla.ke/
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Deck: https://bit.ly/groomlakeintro

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.