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U.S. Government Seeks Forfeiture of Crypto Assets Tied to Fraud from Binance

Recently, a legal action has been initiated by the US Attorney’s Office to reclaim cryptocurrency gains from a Business Email Compromise (BEC) scam linked to Binance wallets, a popular cryptocurrency exchange. The victimized company transferred almost $900,000 to a California bank account without realizing about the scam.

About the BEC Scam

The BEC fraud scheme targeted a company based in Massachusetts, leading to the seizure of cryptocurrency from seven Binance accounts by the US government. The funds were moved through several intermediary wallet addresses, which is a common method used in money laundering cases.

In any BEC scam, the scammers begin by sending misleading emails that look like they come from reliable sources. The emails contain requests that seem legitimate. Unfortunately, a Massachusetts company was recently tricked by this scam. The criminals impersonated one of the company’s business partners and tricked the company to transfer funds from the company’s bank account to other accounts that they or their cohorts managed.

According to the press release, these funds were later moved across multiple crypto addresses. And, eventually, a portion of the money was also sent to a Binance wallet, a well-known digital currency trading platform.

Authorities Fight Back

During August and September of 2022, the authorities managed to seize the funds from that Binance wallet. However, tracing the funds proved to be difficult since they were passed through a number of different wallet addresses. This is a common pattern of transactions with cases related to money laundering. Later, Binace also released an article explaining various risks related to crypto.

The intention behind this strategy was to conceal the path of the fund transactions, making it harder for law enforcement to track their origin and destination. 

Rise of Crypto Scams

According to recent updates, fraudulent activities involving cryptocurrency have become a significant concern for individuals, businesses, and law enforcement agencies. 

The latest Chainanalysis Crypto Crime report for 2022 highlights a troubling pattern. In the initial three quarters of this year, specialists have detected more than twice the count of new malevolent miners in comparison to the corresponding phase in 2021.

Moreover, another report discloses a 79% rise in losses due to illegal activities concerning cryptocurrency in 2022. Astoundingly, the illegal addresses obtained an enormous sum of $14 billion in this one-year duration, which is nearly twice the amount they acquired in 2020.