The U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint seeking to seize approximately $7.74 million in crypto allegedly linked to the North Korean government. The assets include stablecoins, Bitcoin, NFTs, and Ethereum Name Service domains.
Why Seize $7.74M Crypto?
According to DOJ officials, IT operatives posing as foreign freelancers secured remote tech positions under false identities and received crypto compensation. The payments were subsequently obscured via token swaps and other laundering techniques. The agency believes the illicit proceeds were funneled into state-backed organizations facing U.S. sanctions.
Matthew Galeotti, head of the DOJ Criminal Division, described the move as a decisive action against North Korea’s use of cyber schemes to bypass sanctions and fund its nuclear programs. He emphasized that civil forfeiture is a critical tool in disrupting these financial flows and protecting the integrity of cryptocurrency markets.
Notably, the forfeiture move is part of the DOJ’s ongoing DPRK RevGen initiative, launched in March 2024, which targets North Korea’s foreign revenue-generating operations tied to cyber and crypto activities. Recently, North Korea-linked hackers reportedly stole over $1.4 billion, highlighting a rise in crypto heists.
Interestingly, the DOJ initiative serves a dual purpose. While disrupting funding channels for North Korea’s military ambitions, it also sends a warning to employers and blockchain firms about the risks of remote hiring without robust identity verification and AML controls.
Not the First
Historically, governments have not shied away from seizing crypto linked to illicit activity. In Ireland, the Criminal Assets Bureau obtained Bitcoin valued at approximately $378 million from a drug dealer in a High Court case. However, authorities have been unable to access the funds because the wallet seed phrase went missing.
Recently, in the United States, authorities seized $31 million in crypto connected to the 2021 hack of Uranium Finance, a DeFi platform on Binance Smart Chain. The funds, stolen via a smart contract exploit, were traced through mixers like Tornado Cash. It was later reclaimed by the Southern District of New York and Homeland Security Investigations in San Diego.
Meanwhile, the U.S. government seeks to return $8.2 million in seized crypto to victims of a deceptive investment scheme. In the filed forfeiture complaint, officials noted that 33 confirmed victims lost around $6 million, with the rest still being investigated.
