The U.S. government has significantly escalated its campaign against illicit cryptocurrency financing, recently seizing more than $15 million in Tether stablecoin from North Korean state-sponsored hackers and intensifying broader efforts against global cybercrime rings.
The U.S. Department of Justice (DOJ) announced civil seizures of over $15 million in USDT, a stablecoin pegged to the U.S. dollar, as part of a continued crackdown on illicit funding schemes by the Democratic People’s Republic of Korea (DPRK). These operations are specifically aimed at curbing the North Korean regime’s use of digital assets.
🚨 Departamento de Justicia de EE. UU. incauta más de 15 millones de USDT a hackers norcoreanos
Las operaciones tienen como objetivo frenar el financiamiento ilícito del régimen de Corea del Norte
Los activos provienen de robos masivos a exchanges en Europa y se lavaron…— Diario฿itcoin (@DiarioBitcoin) November 10, 2023
The seized funds are linked to the North Korean army-backed hacker group APT38. They originate from four large-scale cryptocurrency platform hacks in 2023, which collectively siphoned hundreds of millions of dollars.
John A. Eisenberg, Deputy Assistant Attorney General for National Security, stated the DOJ “uses every tool available to protect our nation from the depredations of this regime.”
These actions are part of the “DPRK RevGen: Domestic Enabler Initiative,” a collaborative effort involving the National Security Division, the Federal Bureau of Investigation (FBI), and other agencies. The initiative also secured five guilty pleas related to remote IT job frauds, which authorities claim generated millions of dollars for Pyongyang.
The North Korea offensive is one component of the DOJ’s wider strategy against cybercrime and cryptocurrency laundering. The department, alongside the FBI and Secret Service, recently launched the “Scam Center Strike Force.”
This interagency task force targets “pig butchering” scam centers, primarily located in Southeast Asia and operated by Chinese criminal organizations. These scams promise quick profits from crypto investments and have defrauded thousands of Americans, with estimated losses totaling at least $10 billion.
The Strike Force has already raided two compounds in the region, confiscating over $401 million in cryptocurrencies. An additional $80 million is being pursued through forfeiture proceedings.
The illicit funds seized from North Korean hackers, stolen from processors and exchanges in Estonia, Panama, and Seychelles, were laundered through blockchain bridges, mixers, and over-the-counter services. These laundered assets were used to finance North Korea’s nuclear weapons and missile programs, in direct violation of international sanctions.
Civil forfeiture complaints, including one for $1.15 million USDT and another for $13.98 million USDT, were filed in the District of Columbia in recent months.
The DOJ confirmed that victims of the “pig butchering” scams will receive compensation from the recovered funds. The department is also collaborating with international partners to rescue trafficked workers exploited in these scam centers.
Amid these increasing seizures, questions arise about the eventual destination of the confiscated cryptocurrencies. Portions of the crypto seized from North Korean hackers could be allocated to a Strategic Bitcoin Reserve, a concept advanced by the Trump administration.
This proposed reserve aims to hold all Bitcoin seized in criminal and civil actions, with a separate reserve for other digital assets. Treasury officials, however, have indicated that Congressional action may be required to formalize such a plan, particularly concerning budget-neutral acquisition strategies and victim restitution.
Currently, the U.S. government is the largest sovereign holder of Bitcoin globally, possessing 326,588 BTC, valued at approximately $31 billion.