The Justice Department said on Nov. 12 that a court had authorized it to seize or restrain more than $1.2 billion in cryptocurrency stolen from Binance in an Oct. 29 hack. Government and private-sector efforts had already frozen more than $2.7 billion of the stolen coins. The court action gives the DOJ a legal route to take control of those already-frozen assets.
The FBI attributes the theft to North Korean hackers it calls TraderTraitor. Binance put the loss at about $6.34 billion. It said it replaced affected customer assets using its own funds, its customer protection fund and part of its futures insurance fund. The court action concerns the stolen coins; Binance’s funds restored customer balances.
Circle’s earlier freeze of stolen USDC blocked transfers from affected addresses, as our account of the October theft explained. A freeze can stop coins from moving; court-authorized seizure or restraint lets the government assert legal control over assets it is pursuing. Forfeiture, the process for transferring ownership of seized property, would require a further legal step.
The DOJ credited industry partners in its Nov. 12 announcement. Assistant Attorney General A. Tysen Duva said:
The Criminal Division, specifically the Computer Crime and Intellectual Property Section (CCIPS), and our law enforcement partners played the critical role in immediately freezing billions of dollars’ worth of stolen Binance digital assets before they got beyond law enforcement reach.
A. Tysen Duva, assistant attorney general, Justice Department Criminal Division
The DOJ did not publish the underlying court papers, so its announcement does not specify how much of the $1.2 billion is authorized for seizure and how much for restraint. The larger frozen total includes assets outside the amount covered by the court authorization.
Any recovery of the stolen coins would be separate from Binance’s replacement of customer assets. The DOJ said the hackers continue to move stolen assets through exchanges, services that transfer coins between blockchains and tools that obscure transaction histories.
