The U.S. Department of Justice (DOJ) has taken bold action against cybercriminals who allegedly stole more than $5 million in bitcoin through a sophisticated scheme involving SIM swapping and online casinos. Authorities say the thefts targeted multiple victims, and the stolen funds are now subject to a civil forfeiture complaint as the government works to recover the cryptocurrency.
How the Hackers Pulled Off the Digital Theft
According to the DOJ, the attackers exploited weaknesses in mobile phone systems to hijack the victims’ phone numbers. This method, known as SIM swapping, allowed the criminals to bypass security protections and gain direct access to the victims’ digital wallets.
SIM swapping is a type of cybercrime where hackers trick mobile providers into transferring a victim’s phone number to a new SIM card. Once the hackers control the number, they can reset passwords and access online accounts tied to the phone, including cryptocurrency wallets.
Authorities say the thefts occurred between October 29, 2022, and March 21, 2023. The DOJ complaint claims that the hackers moved the stolen bitcoin through multiple digital wallets to hide the source of the funds. Investigators describe these movements as “circular transactions,” where the money was repeatedly transferred in ways that made it difficult to trace.
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The complaint specifies that the stolen funds came from cryptocurrency wallets owned by five separate victims. Each victim’s wallet was targeted individually, and attackers used the hijacked phone numbers to authenticate transactions without the owners’ consent. This approach allowed the perpetrators to drain funds directly from the accounts, highlighting the dangers of mobile-based security systems.
Money Laundering Through Online Casinos
Once the bitcoin was removed from the victims’ wallets, the criminals attempted to launder it. According to the DOJ, they funneled the stolen funds into an account on Stake.com, an online casino platform. Investigators say this step was meant to obscure the origin of the money and make it appear legitimate.
By sending bitcoin through a casino, the hackers could mix the funds with other transactions, making it harder for authorities to track the money. The DOJ noted dozens of transfers between March 20 and March 22, 2023, which appeared to be circular and intended to hide the true source of the funds.
The case shows how cybercriminals combine advanced digital theft methods with online platforms to try to launder stolen cryptocurrency. Authorities are now seeking to seize the bitcoin and return it to the victims.
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DOJ’s Efforts Against Cybercrime
The investigation is being led by trial attorneys in the DOJ’s Computer Crime and Intellectual Property Section, alongside federal prosecutors in Washington D.C. The FBI’s Miami Field Office is also assisting with the case.
The DOJ emphasized that this action is part of a broader effort to combat cybercrime. Since 2020, the department has secured more than 180 cybercrime convictions and facilitated the return of over $350 million to victims. Officials warned that SIM swapping continues to be a serious threat, especially to individuals and organizations that rely on mobile authentication to secure digital accounts, including cryptocurrency wallets.
While these attacks highlight serious risks, advocates note that cryptocurrency itself is widely used in legitimate finance and remains a powerful tool for innovation and economic access. The DOJ’s civil forfeiture complaint now seeks to take control of the stolen bitcoin, demonstrating that digital theft and laundering schemes will face serious legal consequences.
As authorities pursue the recovery of these funds, the case highlights the importance of strong security measures and vigilance for anyone managing cryptocurrency assets. It also serves as a clear reminder that law enforcement agencies are actively targeting cybercriminals who exploit technology for illegal gains.