Hacked Accounts Sold on Dark Web Lead to Government Seizure of $34M in Crypto

Angela Lang/CNET

US authorities in south Florida seized approximately $34 million in cryptocurrency, which was allegedly used to launder proceeds from the illicit sale on the dark web of hacked account information from popular online offerings such as streaming and ride-hailing services, the US Department of Justice said Monday. The “South Florida resident” involved in the sales wasn’t identified by the DOJ, and the press release didn’t specify whether the agency is pursuing an indictment. 

The complaint alleges that the accused sold the hacked information on the dark web and used money transfer services known as tumblers to hide cryptocurrency gained from the illicit sales, which is a violation of federal money laundering statutes. Tumblers are services that mix and combine cryptocurrency funds to obscure their transactional footprint.

The forfeiture action stems from Operation TORnado, a joint investigation by the Organized Crime Drug Enforcement Task Forces, which includes federal, state and local law enforcement agencies. The name of the operation is a play on words, referencing The Onion Router, or TOR, which is software designed to let people use the internet anonymously. The south Florida resident allegedly used TOR to access dark web marketplaces. 

Dark web marketplaces, and the centrality of cryptocurrency to their commercial activity, gained notoriety in 2013 when the FBI shut down one called Silk Road, which during the height of its popularity generated more than $1 billion in illicit transactions. In 2015, Silk Road’s founder was sentenced to life in prison in a highly publicized case that was chronicled in a 2017 documentary

The Justice Department didn’t immediately respond to a request for comment. 

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