In a report dated May 10th, Justice Timothy Kelly has decreed that the accounts must be frozen and transferred to the U.S. owing to suspected ties to North Korean cryptocurrency thefts. The precise sum implicated in the case has not been disclosed.
The ruling originates from a case filed by the U.S. government in August 2020. This case revolved around entities linked to North Korea, which were accused of transferring unlawful cryptocurrency funds “to exchanges beyond the borders of the United States or to unhosted wallets controlled by foreign conspirators.“
Initially, the case focused on 280 accounts, yet one of the virtual accounts was removed from the case two years after its initial filing.
The money laundering scheme entailed concealing the source of the pilfered cryptocurrencies and then converting them into fiat currency, thereby enabling North Korea to evade sanctions.
Dennis Desmond, a cybersecurity lecturer at the University of the Sunshine Coast, pointed out, “The United States has shown minimal achievement in deterring or recovering from cryptocurrency theft.“
Desmond stated that implementing “significant countermeasures” against North Korean operatives who operate beyond the traditional system presents considerable challenges.
The recent decision also mandated the seizure of 134 virtual wallets linked to two cryptocurrency exchange breaches in 2019. In one of these incidents, the culprits absconded with more than $270,000 from a platform, camouflaging the funds through a sequence of transactions across multiple exchanges, a tactic known as “chain hopping.“
Chain hopping is a method of laundering illicit funds by converting them into various cryptocurrencies, utilizing falsified KYC information, and employing VPNs to conceal locations. According to court records, numerous IP addresses engaged in this process overlapped with those utilized in previous heists perpetrated by North Korean attackers.
This recent development follows a ruling in March, where Justice Kelly ordered the seizure of 145 cryptocurrency accounts implicated in laundering stolen funds from four cryptocurrency exchanges between 2018 and 2019.
The attackers managed to siphon off approximately $330 million in funds. The most significant breach resulted in the theft of $250 million from a single platform.
In 2023, North Korean hackers incurred crypto losses amounting to $430 million. A report from the United Nations in March emphasized that the nation derived approximately 40% of its revenue for weapon development from these cyberattacks.
In response to these developments, the government has intensified scrutiny of the crypto sector and taken measures to clamp down on crypto mixing services.
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