Officials have seized more than $225 million in cryptocurrency that prosecutors say was stolen from Americans as part of a global scam targeting hundreds, according to the Justice Department.
Dozens of Americans — and an estimated 400 people worldwide — were targeted by so-called “cryptocurrency confidence” scams, where victims are tricked into making fraudulent investments, according to prosecutors. Now, the FBI and the Secret Service are working to identify the victims and ensure their funds are returned.
These schemes, also referred to as “pig butchering” scams, skyrocketed last year, MSNBC reports. Scammers are also relying heavily on AI to impersonate others or to generate realistic content, according to the outlet.
This marks the “largest ever seizure of funds” related to crypto scams, federal officials say.
FBI Special Agent in Charge Sanjay Virmani said “hundreds of victims lost millions of dollars” to this “elaborate scheme.”
“Cryptocurrency investment schemes can have devastating and long-lasting consequences for victims, far beyond just financial losses,” Virmani added.
Prosecutors say the scammers used a “sophisticated blockchain-based money laundering network that executed hundreds of thousands of transactions.” The scammers then dispersed the stolen funds across several cryptocurrency accounts to conceal their origin, prosecutors allege.
Officials claim the stolen funds were linked to a “scam compound” in the Philippines, but they did not name any alleged perpetrators. Prosecutors described a “scam compound” as a “location operating for the sole purpose of perpetrating cryptocurrency confidence scams and laundering proceeds.”
Trafficking victims are often forced to carry out these scams, officials say.
“Victims are trafficked into countries that include Myanmar, Philippines, Laos and Cambodia and are forced to conduct these scams via text messages, dating websites, and other online platforms inside scam compounds in these countries,” prosecutors wrote in their complaint.
These cryptocurrency investment fraud scams resulted in more than $5.8 billion in reported losses last year, according to the FBI.
The schemes typically originate from large scam compounds in Southeast Asia, though officials are identifying them across the globe. Nigerian officials arrested nearly 800 people in December in connection with crypto-romance scams, Reuters reports.
