US targets $1.2 billion in crypto stolen from Binance

U.S. authorities have court authorization to seize or restrain more than $1.2 billion in cryptocurrency stolen from Binance, while government and private-sector partners have frozen more than $2.7 billion, the Justice Department said Thursday. The funds are part of a theft of more than $6 billion from the exchange on or about Oct. 29, which the FBI attributes to North Korean actors it calls TraderTraitor, according to the Justice Department announcement.

How did authorities stop some of the stolen crypto?

After the theft, investigators traced the digital assets and worked with virtual asset service providers, or VASPs, to freeze them. Those providers can include crypto platforms that handle or hold assets. A freeze can block transactions and keep funds from moving while investigators pursue legal steps. Think of it as placing a hold on property while a court decides what can happen to it.

The Justice Department says the combined U.S. government and private-sector effort has frozen more than $2.7 billion. That is the broader pool; the department has obtained court authorization to seize or restrain more than $1.2 billion of it. The two figures describe different stages and should not be read as separate recoveries.

Who is named in the investigation, and who must act?

The Justice Department says members of the North Korean military, identified by the FBI as TraderTraitor, stole the assets. It says the group continues to launder them through cryptocurrency bridges, mixers and exchanges. A bridge moves tokens between blockchain networks; mixers and exchanges can also form part of the routes investigators trace.

That tracing creates work for VASPs. The FBI, Secret Service and IRS Criminal Investigation have urged providers to block transactions involving addresses the hackers are using, as well as transactions derived from them, according to the Justice Department. The effort involves law enforcement and private firms because tracing alone does not stop an asset from moving; a provider must be able to identify and hold the relevant funds.

Does the court authorization return the money to Binance users?

Not by itself. Authorization to seize or restrain funds allows the government to pursue control of them, but it does not settle who ultimately owns them. The Justice Department says efforts to trace, freeze, seize and forfeit the assets are ongoing. The Associated Press reports that the government typically files a forfeiture claim with a judge, who then determines who has a legitimate claim to recovered funds.

The announcement therefore marks a legal step alongside the existing freezes, not a completed return of the cryptocurrency. The authorities have not said that the full $1.2 billion has been forfeited or distributed. For Binance and its users, the immediate development is that a court-authorized process now covers a substantial portion of the stolen funds, while investigators continue to follow assets moving across crypto services.

Sources and documents

• Justice Department announcement — justice.gov