U.S. Targets Crypto Assets Linked to Fraud on Binance for Forfeiture

U.S. Targets Crypto Assets Linked to Fraud on Binance for Forfeiture


US government initiates civil forfeiture action to recover cryptocurrency proceeds related to a business email compromise fraud scheme targeting a Massachusetts-based company and focuses on seizing crypto assets from seven accounts held at Binance.

In a press release on Tuesday evening, the United States Attorney’s Office announced its initiation of a civil forfeiture action to reclaim digital currency proceeds related to a business email compromise (BEC) fraud scheme. The scheme in particular  targeted a Massachusetts-based company.

The Government concentrates on seizing cryptocurrency assets from 7 accounts held at Binance Crypto exchange, a trending digital currency exchange.

In the previous few years, the  United States has experienced a notable boost in crypto-related phishing scams. These fraudulent activities have become whole lot of national concerns for individuals, enterprises, and law enforcement agencies.

Along with crypto-related phishing scams, another alarming tendency has emerged: pig butchering schemes. These schemes primarily target individuals or enterprises involved in the livestock industry, particularly pig farming.

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Investigators were alerted to the BEC fraud incident in March 2022, triggered by an elaborate scheme that manipulated the Massachusetts company through a fraudulent email.

In doing so, the unsuspecting company transferred a substantial sum of almost $900,000 to a bank account situated in California.

Funds Were Redirected To The Cryptocurrency Exchange

In its ongoing effort, the Government intends to seize and forfeit digital currency confiscated from plenty of accounts held at Binance Crypto exchange. These accounts encompass a range of digital assets, including Bitcoin, Tether (USDT) (USDT), APE (ApeCoin), JASMY (an ERC-20 token), OGN (Origin Protocol), SHIB (Shiba Inu), XEC (eCash), TLM, and BNB ( Binance Crypto exchange coin).

The scammers employed effective strategies, deceiving the company into transferring a whole lot of amount from their local bank account to another account. Following the funds were wired from the victimized company, they were routed through an extra bank account before being converted to Bitcoin (BTC) on a digital currency exchange.

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Following that, the Bitcoin (BTC) was transferred through numerous cryptocurrency addresses, aligning with techniques commonly observed in money laundering transactions, as stated in the news release. In due course, a fraction of the funds went to Binance Crypto exchange, a prominent digital currency exchange.

Nonetheless, in a notable turn  of events, authorities successfully confiscated these funds from Binance Crypto exchange in August and September 2022. To complicate the tracing of funds, the money was routed through numerous intermediary wallet addresses, adhering to a pattern frequently observed in money laundering transactions.

This strategy attempted to obscure the trail of the funds, making it more challenging for investigators to track their origin and destination. Engaging in wire communications as part of a fraudulent scheme to obtain money or property is considered a violation under federal law.

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The complaint presented by the United States Attorney’s Office firmly claims that the confiscated digital currency represents the ill-gotten proceeds from the wire fraud and serves as evidence of property involved in money laundering.

This emphasizes the gravity of the charges against the individuals involved in the scheme, as they face legal consequences for their actions.

In the context of a civil forfeiture action, it is necessary to address any states made by third parties regarding the property. These states must be examined and resolved before the property can be forfeited to the  United States and returned to the victims.

Featured Image From, Chart From TradingView.com

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