U.S. law enforcement officials announced on Wednesday the seizure of over $225 million in cryptocurrency believed to have been fraudulently obtained from numerous American victims through a complex investment scam. This operation marks the largest confiscation of funds linked to so-called “crypto confidence” scams, which mislead individuals into investing in bogus cryptocurrency projects.
The scheme impacted over 400 individuals globally, including many from the United States, resulting in substantial financial losses as outlined in a recently unsealed complaint. Authorities reported that the criminals executed “hundreds of thousands” of transactions to launder the stolen cryptocurrency.
Shawn Bradstreet, a special agent with the Secret Service, confirmed during a press briefing that the government now holds the seized cryptocurrency and is committed to returning as much of it as possible to the victims.
Recent years have seen a significant rise in losses associated with crypto investment fraud, with victims reportedly losing nearly $4 billion in 2023, up from $2.57 billion in the previous year. Projections for 2024 suggest these losses will escalate to approximately $5.8 billion.
The FBI and Secret Service are intensifying efforts to raise awareness about the potential life-altering consequences of these scams. A tragic case highlighted by CNN involved an elderly American man who took his own life after losing all his savings to fraudsters.
A significant portion of these “crypto confidence” scams, also known as “pig butchering,” is attributed to organized networks operating out of Southeast Asia. Investigators have linked some fraudulent activities to large operational hubs along the Myanmar-Thailand border, with certain incidents traced back to the Philippines.
“These scams prey on trust, often resulting in extreme financial hardship for the victims,” Bradstreet commented in a statement, emphasizing the serious impact of such criminal activities.
For some U.S. law enforcement officials, the recent crackdown signals an ongoing commitment from the Trump administration to target prolific networks of cryptocurrency scammers. A memo released in April by Deputy Attorney General Todd Blanche had raised concerns that the Biden administration was favoring regulatory measures over aggressive prosecutions, particularly after the disbanding of the Justice Department’s National Cryptocurrency Enforcement Team.
However, Jeanine Pirro, the interim U.S. attorney for the District of Columbia, assured the public that prosecutors remain dedicated to pursuing such criminals. “This is an unregulated Wild West,” Pirro remarked regarding crypto-related offenses, adding, “But it’s not just an unregulated Wild West. It’s the Wild North, East and South.”