Published on: September 15, 2025, 08:49h.
Updated on: September 15, 2025, 09:59h.
- DOJ aims to confiscate $5M in Bitcoin linked to SIM swap fraud
- Allegations of stolen cryptocurrency being laundered via Stake.com casino accounts
- This case reveals weaknesses in SMS-based multifactor authentication
The United States Department of Justice (DOJ) seeks to confiscate over $5 million in Bitcoin, asserting that these funds are derived from SIM-swapping schemes. Prosecutors claim that the fraudulent activities allowed the culprits to wash the funds through crypto casino platforms—including Stake.com—after siphoning the resources from victims’ cryptocurrency wallets.
Between October 29, 2022, and March 31, 2023, five individuals in the US were victims of this scam, as detailed in a civil forfeiture lawsuit. As is common with SIM-swapping fraud, the perpetrators managed to convince telecommunications firms to transfer the victims’ phone numbers to their control.
This maneuver enabled scammers to intercept authentication codes dispatched to those numbers, allowing them to access the victims’ cryptocurrency accounts.
Subsequently, they laundered the stolen Bitcoin by routing it through various intermediary addresses, ultimately gathering it into a single wallet. This wallet was then utilized to finance accounts on Stake.com and other gaming platforms, per the lawsuit.
Circular Transactions
During a brief period from March 20-22, 2023, there were over 32 circular transactions: repeated deposits and withdrawals of the same Bitcoin, designed to obscure their origins and ownership, claims the DOJ.
By executing frequent circular transactions alongside online casinos, assailants can complicate tracing efforts, as these platforms often lack the regulatory oversight and anti-money laundering (AML) protocols of conventional banking entities.
If the forfeiture request is approved, the DOJ would gain legal ownership of the seized Bitcoin and could potentially restore funds to the victims. While Stake.com has been named in the complaint as one of the platforms used for money laundering, it is not accused of any misconduct; however, its account activities are pivotal in the DOJ’s investigation of the misappropriated assets.
As cryptocurrency becomes increasingly integrated into financial frameworks, regulators are more frequently employing civil forfeiture and blockchain analysis to reclaim stolen digital currencies.
Rising Incidence of SIM Swapping
FBI statistics reveal the extent of the problem in the US. In 2024, there were over 1,000 reported complaints and nearly $26 million in financial losses. This followed a similarly alarming number of cases in 2023, with up to $50 million stolen.
The UK has experienced an even sharper increase, with fraud prevention agency Cifas documenting a staggering 1,055% rise in unauthorized SIM swaps from 2023 to 2024.
Experts warn that these figures might still underestimate the actual scale of the fraud, as many victims may not report their losses.