Kabateck LLP attorney Shant Karnikian provided expert commentary to NTD on the Department of Justice’s landmark $5 million Bitcoin civil forfeiture case involving SIM swap attacks.
The DOJ filed a civil forfeiture action targeting Bitcoin allegedly stolen through sophisticated SIM swap attacks against five victims nationwide between October 2022 and March 2023. The stolen funds were consolidated into a wallet linked to online casino platform Stake.com.
“It’s the new frontier of cyber crime enforcement or deterrence,” Karnikian told NTD. “This is interesting because it’s Bitcoin. You don’t see civil forfeiture happening often with cryptocurrency.”
Karnikian explained the strategic advantages of civil forfeiture in cryptocurrency cases: “The plaintiff is the DOJ. In an ideal world, the DOJ prevails in this case and they take the money and give it back to the victims.”
He noted the case’s broader implications for cryptocurrency platforms: “Companies like Stake.com that accept cryptocurrency deposits might now be a little motivated to be careful who they take money from. They may now be incentivized to ensure that whoever is depositing money into Stake.com, for example, is not a criminal or that the money being deposited isn’t stolen funds.”
He emphasized that civil forfeiture is particularly effective “when the perpetrators are overseas or are hard to prosecute,” highlighting its value as a tool for international cybercrime cases.