Hacked Account Data Sold on Dark Web Leads to Government Seizure of $34M in Crypto

Angela Lang/CNET

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

The complaint alleges that the defendant sold the hacked information on the dark web and used money transfer services known as tumblers to hide cryptocurrency derived from illicit sales, which violates federal money laundering laws. Tumblers are services that mix and match cryptocurrency funds to hide their transactional footprint.

The forfeiture action stems from Operation TORnado, a joint investigation by drug enforcement task forces against organized crime, which includes federal, state and local law enforcement agencies. The name of the operation is a pun, referring to The Onion Router, or TOR, which is software designed to allow people to use the Internet anonymously. The South Florida resident reportedly used TOR to access dark web markets.

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

The Justice Department did not immediately respond to a request for comment.

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