Federal Court Orders Crypto Operators to Enforce U.S. Sanctions on North Korean Hackers, Hydra Market, and Other Blockchain Accounts

First of its kind federal judicial order interfaces with next generation, legally-compliant blockchain

CHICAGO, IL – A federal court today issued a restraining order to freeze accounts on the JuratBTC blockchain containing the cryptocurrency JTC.  The accounts subject to today’s court order are controlled by 16 individuals and criminal organizations who have been sanctioned by the U.S. Treasury Department for crimes ranging from ransomware extortion to proliferating weapons of mass destruction.

The defendants include Hydra Market, North Korean hackers, CHATEX – a Russian ransomware extortion operation, and a top South Sudanese official involved in human rights violations, among others. Other defendants include Blender.IO, the cryptocurrency mixer used by the notorious, cyber-crime organization, Lazarus Group; Anton Andreyez, a Russian hacker who worked to interfere in American elections; and Jiadong Lee, aka “Blackjack1987,” a member of a crime ring that laundered over $100mm in cryptocurrency stolen by North Korean hackers.

The order was made possible by a next-generation blockchain technology called “Jurat” which connects blockchain nodes with court dockets to enforce court orders. The suit was filed by the JuratBTC blockchain miners, seeking to prevent their network from being misused by criminals.

“This is a first, precedent-setting step for bringing blockchains into compliance with regulatory requirements and criminal laws” said Mike Kanovitz, an attorney who mines JTC and is CEO of Jurat LLC, the company that designed the technology.

“As miners, we operate the blockchain and want to protect our users from blockchain crimes. It is also important to us to be in full compliance with laws like sanctions issued by the Treasury Department’s Office of Financial Assets Controls. That’s why we created this blockchain and the Jurat technology.”

JTC is designed as a consumer protection version of bitcoin. It is held by all bitcoin blockchain accounts as of January 8, 2022, meaning everyone who owned bitcoin on that date also owns a corresponding amount of JTC coins. JTC was created by a fork of the bitcoin blockchain that updated the bitcoin software with court connection technology.

The Jurat technology is unique in that it allows blockchains to remain decentralized while still complying with court orders. The nodes reach consensus about the meaning of court orders so that they can continue to operate autonomously.

By incorporating the due process restrictions of court procedures, the Jurat technology offers regulators and law enforcement a means to govern blockchain transactions while ensuring that no government official has control over the blockchain. Similarly, the technology allows users to enforce their own legal rights.

“With Jurat technology, users can take steps in court to recover coins that have been stolen or which they can no longer access because they lost their private keys,” Kanovitz noted. “These are hard problems that the blockchain community and government officials have struggled with since the early days of blockchain. We hope that this innovation can become part of the solution for protecting consumers and help make blockchain technology and Web3 friendly for a new generation of everyday users.”

Industry estimates of crypto currency crimes range above $20 billion annually. The Plaintiff, The JuratBTC Blockchain, is represented by its attorney, Jon Loevy, of Loevy & Loevy Attorneys at Law. A copy of the suit, The JuratBTC Blockchain v. Andreyev et al., case no. 1:23-cv-00779 in the U.S. District Court for the Northern District of Illinois, is available here.

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