Feds Move to Claim $5 Million in Bitcoin From SIM-Swapping Cybercriminals

The U.S. Department of Justice (DOJ) is escalating its use of civil forfeiture to claw back stolen cryptocurrency, with prosecutors now seeking $5 million in Bitcoin tied to a wave of SIM-swapping attacks that drained victims’ wallets between late 2022 and early 2023.

The case, filed by the DOJ’s Computer Crime and Intellectual Property Section (CCIPS), traces a pattern of targeted theft against five victims. Attackers successfully hijacked phone numbers by manipulating mobile carriers, rerouting them to devices under their control. Once in possession of the numbers, the criminals intercepted multifactor authentication (MFA) codes — the digital keys standing between them and high-value cryptocurrency accounts.

This allowed them to bypass protections, gain direct access to wallets, and siphon off millions in Bitcoin. Investigators say the stolen funds were funneled through a series of “hop” wallets to obscure their origin before ultimately consolidating into a single account at Stake.com, an online casino that has repeatedly been flagged as a laundering destination.

“Many of these transactions were circular in that they eventually returned funds to their original source,” prosecutors noted, describing a money-laundering pattern designed to “clean” the stolen Bitcoin and distance it from the original crime.

Civil Forfeiture as a Cybercrime Weapon

While criminal prosecutions are often slow and international extradition nearly impossible, the U.S. has increasingly relied on civil forfeiture to freeze and seize illicit crypto wherever it can be tracked. These actions don’t depend on a criminal conviction but instead target the assets themselves, arguing they are “proceeds of crime.”

The $5 million filing is just the latest in a growing string of seizures:

• June 2025: DOJ sought $225 million tied to romance scams run by organized crime groups in Asia.
• June 2025 (separate action): $7.7 million seized from North Korean operatives who posed as remote IT workers, funneling wages to the regime.
• August 2025: DOJ targeted $2.8 million in Bitcoin tied to Zeppelin ransomware profits and an additional $1.9 million stolen in fraudulent investment schemes.
• Local level: In Los Angeles, county officials and blockchain analysts at TRM Labs secured partial recoveries for romance scam victims, showing how municipal agencies are joining the fight.

SIM-Swapping: An Old Tactic With New Victims

SIM-swapping is far from new, but its effectiveness hasn’t diminished. Groups like Scattered Spider, already linked to high-profile intrusions at MGM Resorts and Caesars Entertainment, have elevated the attack from an underground nuisance to a national threat. By convincing mobile carriers to transfer a victim’s number — often through bribery, insider collusion, or social engineering — attackers gain full control of text messages, calls, and crucially, MFA codes.

The DOJ’s complaint underscores how damaging a single compromised phone number can be. Beyond crypto theft, SIM-swaps enable criminals to hijack email accounts, reset bank logins, and intercept one-time passcodes across dozens of services. In effect, the SIM becomes the skeleton key to a victim’s entire digital life.

TRJ Verdict

The DOJ’s $5 million filing is not about the money alone — it’s about signaling that the U.S. will pursue illicit crypto even when identities are murky and attackers operate across borders. But the reality is sobering: as long as mobile carriers remain vulnerable to insider abuse and weak verification processes, SIM-swapping will continue to thrive.

Civil forfeiture may help claw back some stolen assets, but it won’t stop the next round. Until telecom infrastructure is hardened against number hijacking and MFA is re-engineered to avoid over-reliance on SMS, the “SIM swap pipeline” will remain open — and every wallet, account, and identity tied to a phone number will stay exposed.

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