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DOJ Targets $5M Stolen Bitcoin in SIM Swap Crackdown Across U.S

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The U.S. Department of Justice has filed a civil forfeiture grievance in search of to grab greater than $5 million in Bitcoin allegedly stolen by means of SIM swap assaults that focused victims throughout the nation.

U.S. Attorney Jeanine Ferris Pirro introduced the motion, joined by Acting Assistant Attorney General Matthew R. Galeotti of the Criminal Division and FBI Special Agent in Charge Brett D. Skiles of the Miami Field Office.

Stolen Funds from SIM Swap Scams Traced to Online Casino Wallets

According to the complaint, the funds are straight traceable to cryptocurrency thefts from 5 victims whose wallets have been compromised between October 29, 2022, and March 21, 2023.

The perpetrators allegedly used SIM swapping, a way that exploits weaknesses in cellular authentication techniques to realize management of a sufferer’s cellphone quantity.

Once in management, the attackers intercepted two-factor authentication codes, posed because the sufferer, and transferred funds into accounts they managed.

Investigators mentioned that after every theft, the stolen belongings have been moved by means of a number of cryptocurrency wallets earlier than being consolidated into one pockets that funded an account at Stake.com, a web based on line casino.

Prosecutors allege that the perpetrators engaged in round transactions, repeatedly transferring Bitcoin in and out of accounts to disguise the supply of funds.

Between March 20 and March 22, 2023, the Stake.com account and a linked pockets allegedly carried out not less than 32 such transactions, in line with efforts to launder felony proceeds.

SIM swapping has turn out to be a recurring menace in the cryptocurrency sector. Just this June, two customers of the trade OKX reported losses in a SIM swap hack that adopted a fraudulent SMS notification claiming to be from the platform.

According to SlowMist founder Yu Xian, the attackers tricked victims into producing new API keys with withdrawal and buying and selling permissions, permitting unauthorized entry. The incident got here solely every week after cybercriminals used deepfake movies to focus on the trade’s safety checks.

OKX confirmed the hack in a press release on X, saying it had contacted the affected customers and launched an investigation.

The firm pledged to take accountability if it was discovered to be at fault and to publish findings when obtainable. The trade has not but disclosed the quantity stolen or the exact methodology of compromise.

Similar incidents have hit the broader crypto business. In October 2023, Friend.tech users suffered roughly $400,000 in losses from SIM swap scams, prompting the platform so as to add a two-factor password safeguard for patrons.

A SIM swap assault happens when fraudsters persuade cellular carriers to switch a sufferer’s cellphone quantity to a brand new SIM card underneath their management.

With entry to the quantity, hackers can intercept delicate codes despatched through textual content, bypassing protections on e mail, monetary, and cryptocurrency accounts.

Law enforcement officers say the strategy has turn out to be a most well-liked instrument for cybercriminals in search of to take advantage of gaps in cellular safety for high-value digital thefts.

Wider DOJ Crackdown on Crypto Crime Networks as Crypto Fraud Losses Surge 66% Year-on-Year

Recently, the DOJ seized $225.3 million worth of Tether’s USDT, representing the biggest cryptocurrency seizure tied to an alleged “pig butchering” funding rip-off. Officials say the operation is a part of a widening crackdown on crypto fraud that has already price victims billions.

According to the DOJ, investigators traced the funds by means of a sequence of blockchain transactions connecting them to a global confidence scheme. The stolen belongings have been laundered by means of the trade OKX earlier than being consolidated into wallets holding USDT.

Additionally, authorities say cryptocurrency fraud is rising at an alarming price. The FBI’s Internet Crime Complaint Center reported a 66% increase in losses from 2023 to 2024. The FBI estimates that greater than $9.3 billion in crypto-related losses have been reported in 2024, with $5.8 billion tied to fraudulent funding schemes.

Victims have been drawn in by what seemed to be legit crypto alternatives however in the end misplaced financial savings to organized fraud rings. Many officers famous that they have been older adults focused on-line. The DOJ mentioned the dimensions of losses “compounds the devastating influence” on folks and households.

The DOJ emphasised that the seizure is a part of a wider push to disrupt transnational felony teams exploiting digital belongings. Federal prosecutors introduced guilty pleas in a $36 million laundering case linked to Cambodia-based scams and secured forfeitures in separate circumstances price thousands and thousands of {dollars}.

Other current DOJ crackdowns embody costs towards blockchain entrepreneur Jeremy Jordan-Jones, accused of defrauding investors of $1 million; Russian national Rustam Gallyamov, allegedly behind the Qakbot malware and linked to $24 million in seized crypto; and Charles Parks III, sentenced for a $3.5 million “cryptojacking” scheme.

In July, U.S. officers filed a forfeiture grievance seeking $2.4 million in Bitcoin tied to the Chaos ransomware group. Also, earlier this 12 months, the DOJ seized $31 million from the Uranium Finance hack.

The put up DOJ Targets $5M Stolen Bitcoin in SIM Swap Crackdown Across U.S appeared first on Cryptonews.

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