The US is seizing crypto stolen by North Korean hackers

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The US is seizing crypto stolen by North Korean hackers

By Benson Toti - min read

Authorities have pinpointed 280 BTC and ETH accounts that they believe are storing stolen funds from hacks in 2019

The government of the United States has taken their work on cryptocurrency hackers one step further as they seek to seize control of over 280 Bitcoin and Ethereum accounts. It is believed that these accounts are holding funds that hackers from North Korea stole from two cryptocurrency exchanges.

While the court documents did not name the hacked exchanges, officials revealed that the two hacks happened on two separate occasions: July 1, 2019 and September 25, 2019.

During the first hacking incident, the hackers managed to steal Bitcoin worth $272,000 of alternative cryptocurrencies and tokens. The group took off with Proton Tokens, PlayGame tokens, and IHT Real Estate Protocol tokens.

During the second hacking incident, the hackers looted multiple virtual currencies and left with more than $2.5 million.

US officials revealed that part of their investigation included the use of blockchain analysis to trace the stolen funds from two hacked exchange portals all the way back to the 280 accounts.

Court documents illustrate how the hackers utilised a technique known as “chain hopping” to launder the stolen funds. It entails taking funds from one type of cryptocurrency and exchanging it into another.

The Department of Justice (DoJ) stated that the modus operandi for the hackers involved stealing funds from one exchange, transferring the funds to another exchange, chain hopping it multiple times and eventually transferring these funds into the 280 BTC and ETH crypto accounts that they have tracked down.

As per the court documents, a significant portion of these 280 addresses have been frozen at the cryptocurrency portals where they were set up. This was done immediately after the hacks, as authorities collaborated with the crypto exchange portals to track down the funds and freeze the accounts before any of the funds were converted back into fiat currency.

The cooperation between crypto exchanges was essential in the operations, as there would have been no trace of the funds if the hackers had managed to convert it into fiat after their heists.

The US Government is working on formally taking control of these accounts so that they can return the funds to the hacked exchanges, or to users in cases where the exchanges they deposited have shut down since the hacks.

The DoJ believes that both of these hacks are connected to other North Korean schemes and money laundering operations they had previously uncovered in March 2019, where two Chinese nationals were charged for allowing the hackers to launder stolen funds through Chinese companies.