The U.S. Department of Justice (DOJ) announced on June 12 that it has seized and is in the process of returning over $680,000 in misappropriated cryptocurrency to a crypto and blockchain firm impacted by a scheme involving smart contract manipulation. The case centers around a vulnerability in Safemoon’s liquidity pool mechanism, which was exploited in March 2023 in an attempt to artificially inflate token prices.

The United States pursued civil asset forfeiture due to the absence of criminal charges, recovering a significant portion of the diverted funds. The DOJ affirmed:

The United States has recovered and cleared title to over $680,000 worth of stolen cryptocurrency using civil asset forfeiture and is in the process of returning those funds to the victim.

The attempted theft hinged on a programming flaw in Safemoon’s smart contract that allowed token burning, an operation that distorted market value, the Justice Department explained. A separate trading bot intercepted this action and rerouted the profit to its own operator, who then contacted Safemoon and negotiated to keep 20 percent of the funds. The FBI later stepped in.

The DOJ detailed:

On May 15, 2023, the FBI seized $680,467.92 and 480.996 BNB from accounts at OKX, a cryptocurrency exchange platform, representing approximately half of the 20 percent extorted from Safemoon.

“Safemoon has since filed for bankruptcy, but the funds are being returned to the bankruptcy trustee for Safemoon,” the DOJ clarified.

Neither the initial attacker nor the bot operator has been located or charged, prompting the use of civil proceedings to reclaim the assets. The forfeiture process permitted any interested parties to contest the claim before a federal judge.

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