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US moves to seize 280 cryptocurrency accounts tied to North Korean hacks

Hemani Sheth Mumbai | Updated on August 28, 2020

The US Department of Justice has filed a civil forfeiture complaint and has moved to seize 280 cryptocurrency accounts tied to two separate hacking incidents by North Korean actors.

The hackers have been accused of stealing millions of dollars worth of cryptocurrency.

“The Justice Department today filed a civil forfeiture complaint detailing two hacks of virtual currency exchanges by North Korean actors. These actors stole millions of dollars’ worth of cryptocurrency and ultimately laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders. The complaint follows related criminal and civil actions announced in March 2020 pertaining to the theft of $250 million in cryptocurrency through other exchange hacks by North Korean actors,” the Justice Department said in an official release.

“Today’s action publicly exposes the ongoing connections between North Korea’s cyber-hacking programme and a Chinese cryptocurrency money laundering network,” said Acting Assistant Attorney General Brian C Rabbitt of the Justice Department’s Criminal Division.

Officials further detailed the two hacking incidents, one in July 2019 and another in September 2019.

According to the complaint, the hackers stole over $2,72,000 worth of alternative cryptocurrencies and tokens, including Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens in July 2019.

The funds were then laundered over the subsequent months. In many instances, hackers used a method called “chain hopping” to launder the currency. Chain hopping is where a cryptocurrency is converted into other forms of currency such as BTC, Tether, etc.

The actors had hacked a US-based company in September 2019, the complaint alleged.

“The North Korea-associated hacker gained access to the company’s virtual currency wallets, funds held by the company on other platforms, and funds held by the company’s partners. The hacker stole nearly $2.5 million and laundered it through over 100 accounts at another virtual currency exchange,” read the release.

“The funds from both of the above hacks, as well as hacks previously detailed in a March 2020 forfeiture action, were all allegedly laundered by the same group of Chinese OTC actors. The infrastructure and communication accounts used to further the intrusions and fund transfers were also tied to North Korea,” the Justice Department said.

These accounts were frozen. The Justice Department has now moved to officially seize these 280 accounts containing stolen funds.

Published on August 28, 2020

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