DOJ Seeks $5 Million Bitcoin Confiscation Linked to SIM-Swap Frauds
DOJ Moves to Seize $5 Million in Bitcoin Stolen via SIM-Swap Scams
The United States Department of Justice (DOJ) has initiated a civil forfeiture claim to recover approximately $5 million in Bitcoin that was allegedly stolen from cryptocurrency holders through orchestrated SIM-swap attacks nationwide.
Accused SIM-Swap Hackers Launder Cryptocurrency Through Online Gambling Platforms
Federal prosecutors state that between October 2022 and March 2023, cybercriminals compromised the mobile phone numbers of five individuals. By hijacking these numbers, the perpetrators intercepted two-factor authentication codes, gaining unauthorized access to digital wallets. The stolen Bitcoins were then shuffled through multiple accounts before being deposited into a wallet connected to Stake.com, an internet casino platform.
Documentation from the court reveals frequent transfers between digital wallets and the gambling account, a tactic used to conceal the origin of the stolen Bitcoin. Authorities describe this back-and-forth movement as a typical money laundering method aimed at obscuring illegal funds.
U.S. Attorney Jeanine Ferris Pirro highlighted the complaint, emphasizing the government’s resolve to combat fraud in the digital space. Since 2020, the DOJ’s cybercrime division has reportedly helped recover hundreds of millions of dollars for victims and secured over 180 convictions related to online theft.
Surge in Digital Asset Crime Highlighted by FBI in 2024
Legal experts note that this incident underscores persistent vulnerabilities in mobile security. Specialists advise cryptocurrency investors to use robust security practices such as hardware wallets, two-factor authentication, and PIN protections with their mobile providers to mitigate risks.
This lawsuit is part of a broader federal crackdown on cybercriminals exploiting the cryptocurrency market. Earlier this year, the Justice Department reclaimed $225 million in Tether linked to a large-scale investment fraud. Additional actions include asset seizures from ransomware outfits, prosecutions for cryptocurrency investment fraud, and sanctioning foreign entities involved in digital asset scams.
According to the FBI, SIM swapping has rapidly grown as a preferred method for criminals to breach accounts. Cryptocurrency fraud losses exceeded $9 billion in 2024, representing a 66% increase over the previous year. A significant portion of these losses stemmed from investment scams and account hacks similar to those currently under federal investigation.
The DOJ’s Computer Crime and Intellectual Property Section, in collaboration with attorneys from the U.S. Attorney’s Office in the District of Columbia, is actively pursuing this Bitcoin-related case.
