US government recovers $3.5 million in Bitcoin to reimburse cyber fraud victims

Bitcoin’s surge to a record high of over $107,000 has boosted the US government’s efforts to reimburse victims of a business email compromise (BEC) scheme.

On Dec. 16, the US Department of Justice (DOJ) announced the recovery of 32.68 BTC, valued at over $3.5 million, stolen in a December 2023 cyber fraud case.

The recovery resulted from a collaborative investigation involving the US Secret Service and the US Attorney’s Office’s Asset Forfeiture Unit.

According to the DOJ, the BTC was obtained through a BEC scheme targeting a real estate company. Fraudsters infiltrated the company’s system and issued fraudulent wire transfer instructions, siphoning over $1 million.

The investigation further revealed that approximately ten other individuals and businesses fell prey to similar scams. These victims reported losses ranging between $75,000 and $425,000.

The authorities noted that the stolen funds were laundered through multiple bank accounts, including those managed by money mules, before being consolidated into a single crypto wallet. The wallet was traced to fraudsters operating out of Nigeria.

At the time of seizure, the 32.68 BTC was approximately $900,000. However, Bitcoin’s recent price rally has significantly increased its worth to around $3.5 million, according to CryptoSlate data, with Bitcoin trading at $107,262 at press time.

The authorities believe the surge in Bitcoin’s value will allow all ten claimants to be fully reimbursed for their losses.

The US Attorney’s Office has filed a civil forfeiture case to recover the seized assets and ensure restitution for victims.

US Attorney Tessa Gorman emphasized the importance of civil forfeiture as a key tool in supporting victims, even before the perpetrators are apprehended.

Gorman stated:

“I commend the quick work by law enforcement and the Asset Forfeiture Unit who moved to seize this Bitcoin and are working diligently to make these victims whole.”

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