WASHINGTON, D.C. — In one of the most significant law enforcement actions against crypto-related fraud, the U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint to seize more than $225.3 million in cryptocurrency linked to a sprawling investment scam operation.
The complaint, filed in the U.S. District Court for the District of Columbia, alleges that the digital funds were tied to a blockchain-based money laundering network designed to obscure the origins of fraudulently obtained crypto. The DOJ says the scammers targeted victims through elaborate crypto investment fraud schemes—tricking hundreds into thinking they were investing in legitimate assets.
According to officials, over 400 suspected victims lost millions of dollars as part of the schemes.
Fraud Disguised as Legitimate Investment
The Justice Department outlined how criminals created sophisticated false investment platforms to lure individuals into sending cryptocurrency, often using fake identities and social engineering tactics to build trust. Once the victims transferred funds, the scammers laundered them through a complex web of blockchain addresses, erasing the trail of the stolen money.
“These schemes harm American victims, costing them billions of dollars every year, and undermine faith in the cryptocurrency ecosystem,” said Matthew R. Galeotti, head of the DOJ’s Criminal Division.
He added, “Today’s civil forfeiture complaint is the latest action taken by the Department to protect the American public from fraudsters specialising in cryptocurrency-based scams, and it will not be the last.”
Secret Service’s Largest-Ever Crypto Seizure
The multi-agency investigation was led by the U.S. Secret Service, the Federal Bureau of Investigation (FBI), and several unnamed private sector partners. It resulted in what officials say is the largest seizure of cryptocurrency in Secret Service history.
The seized funds are now the subject of a civil forfeiture process, a legal action through which the government can take possession of assets linked to criminal activity even if no criminal conviction has yet occurred.
The action, according to the DOJ, underscores an aggressive push to dismantle digital fraud networks and return ill-gotten gains to defrauded individuals where possible.
Crypto Fraud Losses Reach Record Highs in 2024
The scale of this seizure reflects a wider crisis in digital finance. In its 2024 Internet Crime Report, the FBI’s Internet Crime Complaint Centre (IC3) documented staggering losses tied to crypto-related fraud.
The report found that cryptocurrency investment fraud alone accounted for $5.8 billion in losses across 41,557 complaints last year, marking a 47% increase in losses and a 29% increase in reported incidents compared to 2023.
Overall, crypto-based crimes cost Americans at least $9.3 billion in 2024, up 66% from the previous year. These losses stemmed not only from investment scams but also from crypto-linked extortion, sextortion, and fraudulent activity involving cryptocurrency ATMs and kiosks.
The FBI warned of a sharp spike in online schemes, noting that scammers often use fictitious online personas to build rapport with victims, introduce cryptocurrency discussions, and ultimately direct them to invest via fraudulent websites or apps.
Criminal Networks Exploit Crypto’s Opacity
The case demonstrates how fraudsters have adapted quickly to digital finance, taking advantage of cryptocurrency’s decentralised and pseudonymous nature to launder money across borders with limited oversight.
Investigators said the network of blockchain addresses involved in this case was purpose-built to launder illicit gains, fragmenting transactions across thousands of wallets to obscure their true origin.
But through a mix of blockchain analysis, cross-agency coordination, and private-sector cooperation, law enforcement managed to track, trace, and intercept a substantial portion of those funds.
The Road Ahead: More Enforcement, Stronger Safeguards
The DOJ’s action signals a growing commitment by U.S. law enforcement to crack down on digital asset crime, especially as public interest and institutional adoption of cryptocurrencies continue to rise.
While this seizure marks a milestone, officials warned that crypto fraud remains an evolving threat requiring constant vigilance from regulators, platforms, and investors alike.
With billions in annual losses and thousands of victims, the call to strengthen crypto oversight and education has never been louder. For now, though, federal agencies are celebrating a rare win in the battle to reclaim stolen digital wealth and a stark warning to would-be scammers hiding behind anonymous addresses.
