DOJ gets court authority over $1.2bn in Binance hack crypto

The US Justice Department says it has court authority to seize or restrain more than $1.2 billion in cryptocurrency stolen from Binance. The order covers part of the funds that authorities and private-sector partners have frozen since the theft, according to the department’s November 12 announcement.

Here is how the recovery effort works: investigators trace stolen assets across crypto transactions, then work with virtual asset service providers to block transfers or freeze assets they can reach. The Justice Department says North Korean actors have continued laundering the Binance funds through bridges, mixers and exchanges. A bridge moves assets between blockchain networks; mixers pool and redistribute crypto to make its transaction trail harder to follow.

A freeze can stop assets from moving, but it does not by itself transfer ownership to the government or decide who should receive the funds. The department says more than $2.7 billion of the stolen assets have been frozen through combined government and private-sector efforts. More than $1.2 billion of that total now has court authorization for seizure or restraint. The Associated Press reported on the announcement and noted that the government typically files a forfeiture claim with a judge, who decides who has a legitimate claim to recovered funds.

More than $2.7 billion frozen since the theft

The FBI says the theft happened on or about October 29 and involved more than $6 billion in virtual assets. The Justice Department identifies the actors as North Korean military members and says the FBI calls their activity “TraderTraitor.” The FBI had previously attributed the theft to the group, AP reported. The department’s announcement does not say that the full $1.2 billion has been transferred into government custody or returned to Binance.

Last week, the FBI, Secret Service and IRS Criminal Investigation issued an alert asking virtual asset service providers to block transactions involving addresses the group was using to launder the stolen Binance assets. Those providers include crypto businesses that can identify or halt activity on accounts and services they operate. The Justice Department says tracing, freezing, seizing and forfeiture efforts are still underway.

The legal step sets out what the government is authorized to seize or restrain; the ongoing tracing work is aimed at locating assets as they move. The announcement gives no final timetable for forfeiture or return of funds.

Source material

• November 12 announcement — justice.gov
• reported on the announcement — apnews.com