Strategy, the largest corporate holder of Bitcoin, did not add to its BTC treasury during its most recent reporting window. Instead, it used part of its financing machinery to repurchase shares of its preferred stock vehicle, STRC, signaling a shift toward capital structure management rather than fresh Bitcoin accumulation.

According to a Tuesday filing with the U.S. Securities and Exchange Commission, Strategy repurchased $176.3 million worth of STRC preferred shares—about 1.8 million shares—between Aug. 31 and Sept. 7. Over the same period, Strategy also increased the size of its Digital Credit Securities Repurchase Program to $2 billion. With no new Bitcoin purchases during this stretch, its treasury holdings were listed at 845,050 BTC, acquired for $63.6 billion at an average cost of $75,412 per coin.

Key takeaways

• Strategy paused Bitcoin purchases in the Aug. 31–Sept. 7 window while deploying capital to repurchase preferred stock via STRC.
• The company repurchased $176.3 million of STRC shares and raised its Digital Credit Securities Repurchase Program to $2 billion.
• Strategy’s BTC treasury remains unchanged at 845,050 BTC in the filing, with an average acquisition price of $75,412.
• STRC trading below its $100 par value can reduce Strategy’s ability to raise funds through STRC sales and may pressure dividend economics.
• Other corporate buyers—including Strive and Capital B—continued to add Bitcoin while Strategy stepped back.

Preferred-stock repurchases replace new BTC buying

Strategy’s latest SEC filing centers on STRC. The company reported that it repurchased 1.8 million STRC shares for an aggregate $176.3 million during Aug. 31 to Sept. 7, using the same preferred-stock structure that has become central to its broader Bitcoin strategy.

That pause matters for traders and investors because it highlights the operational choices behind BTC treasury growth. Even for the sector’s most prominent buyer, Bitcoin accumulation is not constant; it can be influenced by financing conditions, payout planning, and the mechanics of how Strategy converts capital markets activity into additional BTC exposure.

The filing also notes an expansion of Strategy’s Digital Credit Securities Repurchase Program to $2 billion. Repurchase programs can be used to manage outstanding securities and expected cash flows, but the practical implication for BTC holders is that not all incoming capital is being directed to new BTC purchases at any given moment.

What the SEC numbers imply for Strategy’s BTC treasury

With no new Bitcoin purchases disclosed for this interval, Strategy’s treasury remains at 845,050 BTC. The company attributes that position to $63.6 billion in total acquisition cost, equating to an average purchase price of $75,412 per BTC.

Investors often watch the timing of these disclosures closely because they help distinguish between periods of direct accumulation and periods dominated by corporate actions. In this case, the company’s reported BTC count stays flat, while capital markets activity is reflected through preferred-stock buybacks.

Strategy’s most recent prior large purchase was reported earlier in the year by Cointelegraph—its first BTC buy since mid-June, consisting of a $370 million acquisition. The contrast between that purchase period and the subsequent pause underscores that Strategy’s approach can move between “buy” and “structure” modes rather than progressing in a single uninterrupted line.

STRC trading below par raises questions about dividend funding

The filing comes alongside market pricing signals for STRC. In premarket activity on Tuesday, STRC was reported trading around $97.70—roughly 2.3% below its intended $100 par value. At the same time, Strategy’s Nasdaq-traded MSTR common stock was reported down more than 3% in Yahoo Finance’s last look.

That matters because STRC is not only a balance-sheet instrument; it’s also a funding tool. The article notes that STRC is one of Strategy’s main vehicles used to finance Bitcoin accumulation. If STRC trades below par, it can limit how much Strategy may raise through future STRC sales, potentially affecting the pace at which it can convert equity-like instruments into additional BTC exposure.

Lower pricing versus par can also complicate dividend expectations. The piece indicates that trading below par may “force the company to further increase its dividend rate,” connecting market pricing directly to payout needs. Strategy’s dividend framework is part of a broader plan: on June 29, the company unveiled a capital framework intended to allow Bitcoin sales to fund dividends, and it increased the annual dividend rate on its STRC preferred stock to 12%—a key detail for readers tracking how Strategy balances BTC exposure against shareholder returns.

While Strategy paused, other treasuries kept buying

Strategy’s decision not to purchase Bitcoin during this window coincides with continued accumulation by other corporate holders.

Strive, described as the fifth-largest corporate Bitcoin treasury, added 1,375 Bitcoin for $109 million, according to CEO Matt Cole’s disclosure on Monday. That purchase reportedly brought Strive’s total holdings to 24,531 BTC, with an average cost of $79,281 per Bitcoin. Ahead of Tuesday’s market open, Strive’s Nasdaq-traded ASST shares were reported down more than 2.5%, following a more than doubling in the prior month.

In France, Capital B also reported a purchase: it disclosed a $25 million Bitcoin acquisition on Monday—its largest in nearly a year—taking its holdings up to 3,521 BTC. The report also says that this move pushed Capital B ahead of H100 Group among publicly traded BTC holders.

These developments matter because corporate Bitcoin competition is increasingly about timing and financing. When Strategy pauses, it can leave space for other treasury operators to gain relative market position and momentum—both in absolute BTC holdings and in investor attention.

For readers, the next signal to watch is whether Strategy returns to BTC purchases immediately after this window, or whether it continues to prioritize repurchases and dividend mechanics through STRC and the expanded $2 billion Digital Credit Securities Repurchase Program.

Abraxas Capital has bought another 13,000 ETH worth $32.39 million in the spot market to hedge part of a 141,180 ETH short position on Hyperliquid valued at $353.27 million.

Lookonchain said on Sept. 8 that Abraxas Capital purchased the additional Ether while keeping its much larger short position open on the decentralized derivatives platform. The blockchain analytics account described the transaction as another spot purchase made specifically to hedge the short.

Sweden’s tax authority has ordered six crypto companies operating in Boden to pay nearly 540 million Swedish kronor (approx. $56 million) in additional taxes after finding that the firms used business structures to obtain tax benefits they were not entitled to.

Swedish public broadcaster SVT reported on Sept. 3 that the six companies accounted for most of the latest tax adjustments imposed on crypto businesses following a review by Skatteverket, the Swedish Tax Agency. The authority said some companies had structured their operations in ways that concealed crypto mining activity.

Patrik Lillqvist, head of intelligence at Skatteverket, said the arrangements were designed to secure tax advantages that would not have been available if the businesses had been classified as crypto miners.

“The companies that we have inspected often have a special arrangement to conceal that they are engaged in mining,” Lillqvist said, according to a translation of his remarks. “The purpose is to obtain tax advantages that the companies are not entitled to.”

The latest assessments form part of the agency’s review of the crypto industry between 2024 and 2026. Nine companies have received tax adjustments totaling more than half a billion Swedish kronor during that period, with six of them operating in Boden.

Sweden crypto tax review centers on mining operations

Boden, a city in northern Sweden, has attracted crypto miners for years because of its access to power and data center infrastructure. The region was already home to around 10 crypto mining companies by 2018, when operators were increasingly looking to Sweden as a location for mining facilities.

Tax treatment later became a source of tension between the industry and Swedish authorities. Sweden moved in 2023 to remove electricity tax relief previously available to data centers, a decision that affected Bitcoin miners operating energy-intensive facilities in the country.

The latest Skatteverket cases concern how companies described the nature of their businesses for tax purposes. According to the agency, some firms presented operations in a way that hid their role in creating new units of cryptocurrencies through mining.

SVT’s earlier investigation into Sweden’s crypto industry found in 2024 that companies had deprived the state of around 1 billion Swedish kronor in taxes, with most of the cases concentrated in Boden. The new assessments show that disputes involving the sector continued through 2026.

Lillqvist criticized companies that entered Swedish communities and used arrangements that the authority believes deprived the state of tax revenue.

“You come to a society and steal from it,” he said.

Several companies have challenged Skatteverket’s decisions in court. Sweden’s administrative court and administrative court of appeal have so far sided with the tax authority in the cases they have considered, according to SVT.

Bikupan Datacenter takes dispute to Sweden’s top administrative court

Bikupan Datacenter, which has operated in Boden and Robertsfors, is among the companies contesting the tax authority’s position.

The company has been granted corporate restructuring after becoming unable to pay its debts, while its tax dispute has reached Sweden’s Supreme Administrative Court. The case remains under consideration.

Bikupan is connected to HIVE Digital Technologies, whose Swedish operations have been caught in a longer-running disagreement over the tax treatment of its business. HIVE said in March that it was scaling down Bitcoin mining at its Boden facility as it challenged the way Swedish tax rules were being applied to the operation.

Johanna Törnblad, CEO of Bikupan Datacenter and HIVE’s Sweden country manager, rejected Skatteverket’s assessment of the company’s historical operations.

“When it comes to the historical operations of the Bikupa companies, we do not share the Swedish Tax Agency’s assessment,” Törnblad told SVT by email.

She said Bikupan’s restructuring application explains the company’s position that crypto mining itself was performed by external mining pools that were independent of the HIVE group.

Under the company’s account of its business model, the Bikupa entities sold computing capacity, or computing power, which could be used for workloads including artificial intelligence.

HIVE has been moving its Boden site toward AI computing

The distinction has become more relevant to HIVE’s plans for its Swedish infrastructure as the company moves resources toward high-performance computing and artificial intelligence.

Crypto.news previously reported in June that HIVE generated record fiscal 2026 revenue of $298 million while expanding its AI computing business. Its high-performance computing operation generated $19.5 million during the fiscal year, up 94% from $10 million a year earlier, while contracted annual recurring revenue from its BUZZ HPC unit reached $35 million.

HIVE reported 440 megawatts of global power capacity across Canada, Sweden and Paraguay at the end of the fiscal year. Its installed Bitcoin mining hashrate increased from 6.5 exahashes per second to 25.1 EH/s during the same period, although the company’s Bitcoin holdings fell to 150 BTC as of March 31.

Part of its AI expansion has involved repurposing infrastructure that was originally used for crypto mining. The company has been converting its Boden facility into a Tier 3 liquid-cooled high-performance computing data center designed to support 2,000 Nvidia GPUs.

The company had already disclosed plans in November 2025 to retrofit the Boden site from a Tier I mining facility into a liquid-cooled Tier III+ high-performance computing center, while expanding GPU infrastructure in Canada.

HIVE’s dispute with Swedish authorities has continued while Bikupan deals with its tax liabilities and restructuring proceedings. The company maintains that its historical Swedish entities provided computing power while independent external mining pools carried out the actual crypto mining.

Skatteverket has maintained the opposite position in its assessments, treating the reviewed operations as mining activity and arguing that the structures used by the companies gave them tax advantages for which they did not qualify. Bikupan’s challenge to that assessment remains before the Supreme Administrative Court.

F2Pool co-founder Chun Wang criticized Zcash on Sept. 8 as ZEC traded near $1,130 following a rally that carried the privacy coin into the cryptocurrency market’s top ten.

Wang, who posts under the name Chun at @satofishi, called the move a “narrative bid.” He argued that Zcash’s funding history, optional privacy model, governance disputes and recently disclosed Orchard vulnerability did not justify its valuation.

His comments are opinions rather than evidence of wrongdoing. Several underlying events are documented, but some of Wang’s conclusions omit later changes to Zcash’s funding and privacy systems.

ZEC was trading around $1,130 when this report was prepared, down nearly 7% over 24 hours. CoinMarketCap placed its capitalization near $19 billion and ranked it tenth, while CoinGecko placed it ninth. Rankings can differ because platforms use different supply and asset-classification methods.

The token remained more than 2,300% higher than one year earlier, according to market data cited in coverage of Zcash’s move above $1,000. Its rally accelerated after Grayscale converted its Zcash Trust into a U.S.-listed spot exchange-traded fund in August.

Zcash funding criticism needs historical context

Wang said Zcash did not have a fair launch because 20% of its early block rewards went to founders, employees, advisers and investors.

The underlying percentage is correct. During Zcash’s first four years, miners received 80% of each block subsidy, while the Founders’ Reward received 20%. Because that arrangement covered only the first issuance period, it represented 2.1 million ZEC, or 10% of the planned 21 million maximum supply.

The recipients included founders, investors, employees and organizations supporting development. The 2.1 million ZEC did not go exclusively to Electric Coin Company, a distinction noted in historical community discussions.

The Founders’ Reward ended with the Canopy upgrade in November 2020. Zcash then introduced a development fund that also received 20% of block rewards between the first and second halvings.

Under that arrangement, 7% went to Electric Coin Company, 5% to the Zcash Foundation and 8% to Major Grants, later renamed Zcash Community Grants. Miners continued receiving 80%.

That development fund added a maximum of approximately 1.05 million ZEC, equal to 5% of the eventual supply. Combined with the original Founders’ Reward, the two mechanisms directed up to 15% of the maximum supply toward founders, investors and different development recipients across eight years.

Wang’s description becomes less precise when applied to the present system. Since November 2024, Zcash has continued allocating 20% of block rewards for ecosystem funding, but the recipients changed.

The official Zcash network page states that 8% goes to Zcash Community Grants and 12% entered a protocol-tracked lockbox. Direct payments to Electric Coin Company and the Zcash Foundation ended under that structure.

The lockbox had no immediate withdrawal mechanism when introduced. Its purpose was to hold funds until the community agreed on a decentralized distribution process. Therefore, describing the current allocation as a direct continuing payment to “a company and its backers” would be inaccurate.

Whether any protocol-funded development mechanism is appropriate remains a policy judgment. Bitcoin generally directs its subsidy to miners, while Zcash chose to reserve part of issuance for software development and ecosystem grants.

Zcash governance dispute did not stop the network

Wang also cited the January departure of the Electric Coin Company team following a dispute with Bootstrap, the U.S. nonprofit that governed ECC.

The departure occurred on Jan. 7. Then-CEO Josh Swihart said the entire team had been “constructively discharged” after employment conditions changed. He accused a majority of Bootstrap’s board of acting against the company’s mission.

Bootstrap disputed that framing. Its board said the disagreement concerned nonprofit law, fiduciary responsibilities and plans involving the Zashi wallet and outside investment.

The board argued that assets held by a public-benefit nonprofit could not be transferred in a way that created improper private benefits. No court has ruled on either side’s description of the dispute.

The former ECC employees did not abandon Zcash development. They announced a new company, Zcash Open Development Lab, and continued working on the protocol and privacy-related products.

Zcash founder Zooko Wilcox defended the integrity of the Bootstrap directors and said the conflict did not affect the protocol. The blockchain continued operating because miners, nodes and multiple development groups did not depend on ECC’s corporate existence.

The episode still exposed a governance divide among organizations responsible for core software, funding, trademarks and wallets. Wang’s statement that the disagreement proved Zcash was “broken at the top” is his interpretation, not an established technical finding.

ZEC fell sharply when the split became public in January. That verified price reaction showed that traders considered the developer dispute material, even though the blockchain itself did not halt.

Ironwood contained the Orchard supply risk

Wang’s strongest factual criticism concerns a vulnerability in Orchard, Zcash’s main shielded pool between May 2022 and July 2026.

Security researcher Taylor Hornby discovered the flaw in May. The error involved an under-constrained element within Orchard’s cryptographic circuit. In theory, an attacker could have supplied invalid inputs and created counterfeit ZEC that ordinary verification would accept.

Developers deployed an emergency fix on June 1. They reported finding no evidence that anyone had exploited the vulnerability.

However, the privacy properties of Orchard prevent developers from cryptographically proving that no counterfeit ZEC was created before the patch. The flaw existed from Orchard’s May 2022 activation until the emergency response, according to the technical disclosure.

That limitation supports part of Wang’s criticism. Transparent ledgers allow observers to calculate visible supply directly. A shielded pool conceals transaction values, so its supply integrity depends on the soundness of its cryptographic rules.

The inability to prove non-exploitation is not evidence that counterfeiting occurred. It means the available evidence cannot eliminate that possibility with cryptographic certainty.

Zcash activated Ironwood at block 3,428,143 on July 28. The upgrade opened a separately tracked shielded pool and prevented Orchard from accepting new deposits or internal transfers. Orchard users could still withdraw funds.

Ironwood introduced an accounting checkpoint that prevents more ZEC from leaving Orchard than entered it. Any counterfeit balance remaining in the old pool therefore cannot pass freely into the new pool beyond the recorded amount.

As crypto.news reported, Ironwood replaced Orchard with a formally verified shielded design. The verification provides stronger assurance that Ironwood cannot create hidden counterfeit ZEC under its stated design assumptions.

The upgrade did not retroactively prove that Orchard was never exploited. It contained the unresolved supply risk and created a new accounting boundary for future transactions.

Optional privacy is seeing greater use

Wang argued that optional privacy had left most ZEC in transparent addresses for much of the network’s history. Zcash does allow both transparent and shielded transfers, unlike Monero, where privacy protections apply by default.

Exchange support, wallet limitations and the higher computing requirements of early shielded transactions slowed adoption. Transparent addresses remained easier for many services to support.

Recent data presents a more mixed picture. Shielded ZEC increased from about 8% of supply in early 2024 to approximately 30% by May 2026. Shielded transactions accounted for 59.3% of network activity at that point, according to data cited in reporting on growing shielded adoption.

Those figures do not prove that Zcash has developed a broad commercial economy. They do show that the claim that privacy remains almost unused is outdated when applied to current network activity.

Wang compared Zcash unfavorably with Solana and Hyperliquid, arguing that both networks process more visible economic activity. That comparison relies on different use cases. Solana supports general-purpose applications, while Hyperliquid focuses on trading. Zcash primarily offers payments with optional transaction privacy.

Market capitalization also does not measure protocol revenue, payment volume or user numbers directly. ZEC’s top-ten position records the market value assigned to circulating tokens, not a verified ranking of network utility.

BlockFi error was real but unrelated to Zcash

Wang separately referred to BlockFi’s 2021 promotional payment error. BlockFi confirmed that some customers received rewards denominated in Bitcoin instead of U.S. dollars.

Some users withdrew the unexpected payments before BlockFi reversed them. The company said fewer than 100 customers withdrew incorrect awards and initially placed its remaining exposure near $10 million.

Reports showed individual account credits involving hundreds of BTC. However, BlockFi did not publicly verify Wang’s specific example of a customer receiving 701.4 BTC instead of $701.40.

The payment mistake had no operational connection to Zcash, its developers or zk-SNARK cryptography. Wang used it as an analogy for poor attention to detail, alongside his earlier disagreement with a Zcash team member over Eastern Standard Time and Eastern Daylight Time.

His six-year-old decision to block the company was personal. Confusion over time-zone terminology does not establish that Zcash’s cryptographic work was defective.

What happens next for Zcash

Ironwood remains the main technical response to the Orchard vulnerability. Users must move funds out of Orchard for them to enter the new shielded pool, while developers can monitor the accounting checkpoint during that migration.

The ecosystem must also determine how development funding is governed and distributed. Debate over the 20% allocation is likely to continue because it affects miners, grant recipients and ZEC holders differently.

For traders, the immediate question is whether ZEC can retain its top-ten capitalization after a steep rally. The token fell from an intraday high above $1,216 to around $1,130, showing elevated volatility.

A rally driven partly by ETF access and short liquidations does not prove Chun Wang’s criticism correct or incorrect. It shows that market price, protocol security and network use remain separate measures requiring independent evidence.

FAQs

Bitmine Immersion Technologies, the largest publicly listed corporate holder of Ether, says it has added another large batch of ETH to its treasury. The purchase—announced in a Tuesday release—moves the company closer to its stated objective of acquiring 5% of Ethereum’s total supply.

According to Bitmine’s announcement, the firm bought 28,086 ETH last week. The amount was valued at roughly $69.5 million and brings Bitmine’s total holdings to 5.93 million ETH, accumulated at an average cost of $2,495 per ETH.

Key takeaways

• Bitmine purchased 28,086 ETH last week, bringing total holdings to 5.93 million ETH.
• The company says its treasury is near its target: it has completed 97% of the plan to reach 5% of total Ether supply.
• Bitmine reported $15.7 billion in total assets, including $593 million in marketable securities and 5.1 million staked ETH.
• Third-party figures cited in the report indicate Bitmine faces $5.1 billion in unrealized losses on its ETH exposure.

A steady accumulation strategy nears its stated 5% target

Bitmine’s latest buy is part of a longer accumulation program that began with the company’s goal of reaching a significant share of Ether supply over a limited timeframe. In the same Tuesday announcement, Bitmine stated that it has completed 97% of its effort to acquire 5% of the total Ether supply within 15 months.

Earlier coverage linked Bitmine’s progress to a persistent buying streak led by chairman Tom Lee. In the week preceding this announcement, Bitmine said it acquired 53,501 ETH, pushing its holdings to account for 4.9% of Ethereum’s 120.7 million circulating supply.

With the new purchase, Bitmine is effectively tightening the final gap toward the 5% benchmark. For investors, that matters because it suggests the firm is treating Ether not as a trading position but as a treasury allocation—one that will continue to draw attention to how corporate buyers balance accumulation against mark-to-market swings.

Staked Ether and treasury economics

Bitmine also highlighted the role of staking in its balance-sheet setup. The company reported $15.7 billion in total assets, including $593 million in marketable securities and exposure to other crypto holdings alongside its growing ETH inventory.

Crucially, Bitmine said it holds 5.1 million staked ETH, which it expects to produce $330 million in annualized staking revenue. The claim is tied to general expectations around staking yield and is referenced alongside broader coverage of Ethereum staking-linked themes, including an SEC filing and staking revenue discussions reported by Cointelegraph.

For market participants, the key question isn’t only whether Bitmine can keep buying ETH, but also how staking cash flows may partially offset unrealized losses during price drawdowns. Staking revenue can provide a different lens on performance compared with pure spot price exposure—especially when a company’s ETH position is large enough to dominate its treasury narrative.

Unrealized losses widen as Ether weakens

The company’s accumulation continues even as Ether has remained under pressure. The report cites Dropstab data indicating Bitmine is currently facing $5.1 billion in unrealized losses on its ETH holdings.

Ether’s market price has also moved lower versus early 2026 levels. CoinMarketCap data referenced in the article shows Ether was trading around $2,469 at 1:29 pm UTC on Tuesday, after being down 16% since the start of 2026. Against Bitmine’s average acquisition price of $2,495 per ETH, the latest buy is being added at levels close to (and slightly below) that cited average, underscoring how incremental purchases can still be made even when price remains soft.

That combination—continued buying at prevailing prices while showing very large unrealized drawdowns—can be difficult for equity holders to interpret because it creates a moving gap between cost basis and current valuation. The stock reaction can therefore depend as much on expectations for staking-related earnings and future accumulation pacing as on ETH’s spot trajectory.

Shares and equity market reaction

As Bitmine’s ETH treasury expands, its publicly traded stock also draws scrutiny. The article notes that Bitmine’s NYSE-listed shares (ticker: BMNR) were down more than 2% at Tuesday’s market open, implying the stock could extend its year-to-date decline into double digits.

Yahoo Finance tracking cited in the piece provides the market snapshot for investors watching whether the equity market is treating the ETH accumulation as a value-creating thesis or as a risk factor amid broader crypto volatility.

While the company’s latest purchase reinforces its commitment to its 5% goal, the equity market’s willingness to look past mark-to-market losses appears to be shaped by near-term price direction and by whether investors believe staking revenue assumptions and operational execution will ultimately translate into stronger shareholder outcomes.

Going forward, readers should watch two things: whether Bitmine reaches its stated 5% of total Ether supply target on schedule, and how staking revenue expectations compare with realized performance as ETH prices fluctuate. The uncertainty remains straightforward—without clarity on future yield, pricing, and treasury valuation effects, the gap between long-term accumulation goals and short-term market sentiment will likely stay in focus.

A U.S. federal court has ordered the forfeiture of roughly $212,700 in stablecoins linked to wages earned by North Korean IT workers, giving the Justice Department a partial victory in its attempt to seize more than $7.74 million in digital assets tied to an alleged sanctions evasion network.

NK News reported on Sept. 7 that U.S. District Judge Rudolph Contreras ruled that funds seized from a crypto wallet beginning with “0x81c4” should be forfeited to the U.S. government. The Sept. 3 ruling granted part of the Justice Department’s request for default judgment while rejecting its attempt to immediately take control of other assets included in the case.

Prosecutors said the wallet received approximately 158,123 USDC from at least 10 addresses used to receive payments for North Korean IT workers and another 54,574 USDT from at least four worker payment addresses. The two dollar-pegged stablecoins had a combined face value of roughly $212,700.

The government argued that the funds were proceeds of a scheme in which North Korean workers obtained overseas IT jobs, concealed their identities and locations, and routed their earnings through cryptocurrency before money was ultimately sent toward North Korea.

U.S. court approves $212,700 North Korea crypto forfeiture

Contreras found that prosecutors had provided enough information to establish how the 0x81c4 wallet was connected to the alleged operation.

The court said the government’s allegations described a wire fraud and money laundering operation involving foreign entities that conducted transactions on behalf of sanctioned individuals in violation of the International Emergency Economic Powers Act.

For the purpose of the default judgment, the allegations were sufficient to establish that the seized funds constituted or were derived from proceeds traceable to those violations. Contreras therefore entered judgment in favor of the United States for the assets seized from the wallet.

The ruling covered only part of a substantially larger pool of assets targeted by federal prosecutors.

The Justice Department filed its civil forfeiture complaint in June 2025 seeking more than $7.74 million in cryptocurrency and other digital property allegedly generated and laundered through North Korean overseas IT employment schemes.

As crypto.news previously reported, the assets had initially been restrained in connection with an April 2023 indictment of Sim Hyon Sop, a representative of North Korea’s Foreign Trade Bank accused of working with IT workers to move crypto earnings back toward the country.

The complaint covered cryptocurrency, non-fungible tokens and Ethereum Name Service domains. Prosecutors said some of the funds had been frozen or seized while North Korean workers and their associates were attempting to launder the proceeds.

Contreras did not grant forfeiture of the remaining property. The judge found that the government had not adequately identified the other assets in its public forfeiture notice and denied that part of the request without prejudice, leaving prosecutors able to return with another request.

North Korean IT workers allegedly used stablecoins for salaries

The Justice Department has accused North Korea of deploying IT workers around the world to obtain employment at technology and blockchain companies, sometimes using fraudulent identification documents and other methods to hide their nationality and physical location.

Employers who were unaware of their identities then paid the workers for legitimate IT work, often using stablecoins such as USDC and USDT, according to the department.

Prosecutors said the workers used several methods to obscure where their crypto came from before sending funds toward North Korea. The alleged techniques included moving money in smaller amounts, using accounts opened under false identities, swapping tokens, moving assets between blockchains, buying NFTs and mixing employment proceeds with other funds.

U.S. authorities have continued targeting the people and infrastructure accused of supporting those operations. In March, the Treasury Department sanctioned a network that it said helped North Korean workers obtain overseas jobs using false personas and stolen identities before cryptocurrency was used to transfer or launder their earnings.

Investigators have separately traced the employment strategy into crypto development teams. An Ethereum Foundation-backed investigation disclosed in April identified 100 suspected DPRK operatives working within crypto companies, while the Ketman Project alerted 53 teams after examining developer identities and GitHub activity.

Security researcher and MetaMask developer Taylor Monahan said in a separate investigation that North Korean-linked developers had worked inside DeFi projects over several years, with the activity extending back to the early period of decentralized finance.

The risk has continued into 2026. Consensys temporarily halted product releases in July after discovering that a consultant linked to North Korea had gained access to its systems for roughly one month. The company’s investigation found no evidence that assets or data had been stolen or that malicious code had been introduced.

Sim Hyon Sop and Kim Sang Man remain tied to U.S. case

The forfeiture complaint identified Sim and Kim Sang Man as intermediaries who allegedly helped move earnings generated by overseas workers.

Sim served as a representative of North Korea’s Foreign Trade Bank, which has been sanctioned by the United States over its links to the country’s weapons programs. The Treasury Department placed Sim on its Specially Designated Nationals list in April 2023.

According to the Justice Department, North Korean IT workers sent funds to Sim after laundering their earnings. Prosecutors have accused him of participating in schemes involving workers who obtained employment at companies in the United States and elsewhere and of working with over-the-counter cryptocurrency traders to use illicit funds to acquire goods for North Korea.

Kim was sanctioned the following month along with Chinyong, also known as Jinyong IT Cooperation Company. U.S. authorities identify him as the chief executive of Chinyong, which is subordinate to North Korea’s Ministry of Defense and employs delegations of IT workers operating overseas.

Prosecutors said Kim served as an intermediary between those workers and the Foreign Trade Bank by transferring funds from workers to Sim. Chinyong delegations have operated in countries including Russia and Laos, according to the Justice Department.

U.S. authorities have previously linked Kim to crypto transactions involving overseas workers. An earlier investigation found that a suspected North Korean IT worker operating under the alias “Light Fury” transferred more than $300,000 from a public Ethereum Name Service address to Kim.

The Justice Department’s June 2025 complaint said the property targeted for forfeiture consisted of funds generated by North Korean IT workers, including people who had been unknowingly employed by U.S.-based companies, before proceeds were sent to Kim or Sim for the benefit of the North Korean government.