Cryptocurrency: US authorities seize loot from digital theft

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Coin symbolizing Ethereum: North Korea's hackers keep trying to capture digital currencies

Photo: DADO RUVIC / REUTERS

US authorities have seized over $30 million worth of cryptocurrency.

According to crypto intelligence firm Chainalysis, it is digital money that North Korea-affiliated hacker group Lazarus stole from the makers of the popular online game Axie Infinity.

The company explained in a blog post that it was involved in the recovery along with US law enforcement and other crypto organizations.

The seizures account for about a tenth of the total funds stolen from the blockchain game stolen in March after the market's volatility over the past few months, according to Chainalysis.

More than a billion dollars stolen

“We estimate that groups linked to North Korea have stolen approximately $1 billion in cryptocurrency from DeFi protocols so far in 2022,” the company also stated.

Chainalysis was referring to decentralized financial protocols, a generic term for financial services offered on public blockchains.

In order to hide the money from the authorities and exchange it for real currencies, the attackers are said to have used the Tornado Cash service, among other things.

Because of the connections to North Korea, US authorities imposed sanctions on the platform in August, which mixes money flows and thus encourages money laundering.

A 29-year-old developer of the service has been arrested in the Netherlands.

Crypto exchange Coinbase said Thursday it is funding a lawsuit against the US Treasury Department to block sanctions barring Americans from accessing Tornado Cash.

In the lawsuit, filed Thursday in a U.S. district court in Texas, six Tornado Cash users accused the Treasury Department of violating constitutional rights to free speech and exceeding its authority in sanctioning the cryptocurrency mixer.

The lawsuit alleges that while the US Treasury Department's Office of Foreign Assets Control (OFAC) has certain sanctioning powers, its jurisdiction does not extend to software code and smart contracts.

»Tornado Cash is not a person, entity or organization.

It is a decentralized, open-source software project that restores privacy to Ethereum users,” the lawsuit reads.

White House complains about energy consumption

Politically, however, this argument has increasingly less support.

The White House has now presented a new report that complains about the high energy consumption of cryptocurrencies, which are not opposed to any positive effects.

The authors of the report recommend restrictions if operators do not switch to techniques such as proof of stake, which use significantly less energy.

According to the Washington Post, the US Securities and Exchange Commission is also preparing several reports according to which crypto investment forms could endanger the financial stability of the USA.

The SEC also wants to focus more on investment fraud in these markets.

tmk/reuters