U.S. Seizes $1.2bn in Binance Crypto, Freezes $2.7bn of $6bn Stolen

The U.S. Department of Justice said Thursday it has seized about $1.2 billion in virtual assets stolen from Binance last month. It said it obtained court authorisation to seize or restrain more than $1.2 billion in cryptocurrency stolen from the exchange.

More than $6 billion was stolen from Binance on Oct. 29. The DOJ attributed the attack to actors linked to the North Korean military. U.S. government and private-sector efforts have frozen more than $2.7 billion of the stolen amount.

FBI links attack to TraderTraitor

The FBI blames the attack, which shook confidence in crypto market security, on members of the North Korean military it refers to as “TraderTraitor.” The DOJ said it was taking coordinated action against what it called the North Korean government’s “schemes to fund its regime through the massive theft of cryptocurrency.”

That includes “the court-authorized seizure and restraint of more than $1.2 billion worth of cryptocurrency recently stolen from Binance,” the DOJ said.

DOJ units, law enforcement partners and virtual asset service providers have been working to intercept the stolen assets. But tracking and freezing efforts are ongoing, as TraderTraitor actors continue to launder them through various cryptocurrency channels.

FaceStealer scam disrupted

Authorities also seized cloud-based infrastructure used in a massive identity impersonation scam known as “FaceStealer.” The DOJ said more than $400 million worth of cryptocurrency has been stolen through the scheme over 18 months.

In the scheme, hackers set up fake video meetings using stolen accounts and recordings of people known to the target by using AI-generated deepfakes. The hackers then say a technical problem requires a fix, install malware on a computer and take over the victim’s communications, steal their cryptocurrency and target their contacts. This can happen sometimes months or more than a year after the initial compromise.

Individuals working in the cryptocurrency and web3 industries are prime targets.

FBI warns on social engineering

Assistant Director in Charge Patrick Grandy, of the FBI’s Los Angeles Field Office, called FaceStealer “a highly effective social engineering scheme capable of deceiving even the most experienced technical and security conscious computer user.”

“It exploits our trust in ubiquitous video conference platforms and valued personal relationships. If you can’t imagine a scenario where you might fall prey to it, you are not thinking creatively enough,” Grandy added.

Principal Deputy Assistant Attorney General for National Security M. Scott Proctor said: “North Korea’s government bankrolls its rogue regime and illicit weapons program through cryptocurrency theft.” He added: “America will fight back against that corrupt regime’s effort to profit through cybercrime. The National Security Division will use every tool at its disposal to seize and return North Korea’s ill-gotten gains.”