The US government is continuing its efforts to recover stolen cryptocurrency through civil forfeiture, a legal process that allows authorities to seize assets linked to criminal activity. A recent case involves a civil complaint filed by the Department of Justice’s Computer Crime and Intellectual Property Section (CCIPS) to seize approximately $5 million in Bitcoin. This money was stolen from five different individuals between late 2022 and early 2023. These thefts were made possible through SIM swapping, a malicious technique where a criminal tricks a mobile carrier into transferring a victim’s phone number to a new SIM card they control. This gives the attacker access to critical information, like multi-factor authentication codes, enabling them to drain cryptocurrency wallets and other high-value accounts.
After the thefts, the perpetrators laundered the stolen funds through a complex series of transactions. The money was moved through multiple cryptocurrency wallets before being consolidated into a single wallet. From there, the funds were used to finance an account at Stake.com, an online casino. The Justice Department noted that many of these transactions were circular, a common tactic used in money laundering to obscure the origin of illegally obtained funds. This intricate digital trail was likely difficult to follow, but authorities were able to trace the assets and link them back to the original crimes.
This case is just one example of the Justice Department’s growing focus on seizing illicit digital assets. In recent months, the department has filed several other notable civil forfeiture actions targeting cybercriminals. In June, authorities filed a claim to seize $225 million in cryptocurrency that was stolen from Americans through romance scams originating in Asia. The same month, they also filed a complaint involving $7.7 million in crypto allegedly obtained by North Korean IT workers through an illicit scheme. These actions demonstrate the government’s commitment to disrupting financial networks that support cybercrime, and they show how law enforcement is adapting to the evolving landscape of digital currency.
The crackdown extends beyond the federal level, with agencies at various levels of government getting involved. In August, the Department of Justice announced its intent to seize $2.8 million in crypto linked to ill-gotten gains from the Zeppelin ransomware, along with over $1.9 million from various cryptocurrency investment schemes. These efforts highlight a coordinated approach to combating cybercrime. They also send a clear message to criminals that digital assets, once thought to be untraceable, are increasingly vulnerable to seizure.
Local governments and private companies are also joining the fight. For example, in late August, the Los Angeles County government, in collaboration with the blockchain intelligence company TRM Labs, successfully secured funds that were stolen from two individuals through romance scams. These partnerships are becoming more common as authorities recognize the need for specialized expertise to track and recover digital assets. The trend suggests that civil forfeiture will continue to be a powerful tool for law enforcement in the ongoing battle against cybercrime.
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