In a rarity, the US is moving to claw back $225 million that victims lost to cryptocurrency investment scams, which continue to hit unsuspecting consumers.
On Wednesday, the Justice Department filed a civil forfeiture complaint in a US district court to recover $225.3 million in Tether cryptocurrency from seven virtual currency addresses. The goal is to return the funds to the rightful owners; the list includes at least 430 victims, according to the Justice Department’s complaint.
Cryptocurrency exchange OKX contacted law enforcement about a large network of virtual currency accounts that appeared to be laundering the stolen funds. “Law enforcement interviewed approximately 60 of those victims, who collectively lost approximately $19 million in cryptocurrency to scammers,” the Justice Department’s 75-page complaint says.
The victims included US residents. In the complaint, federal agents noted that one victim in Arizona encountered the scam through a message on LinkedIn from an unknown woman. Another victim named “D.M.” was contacted through a text message from an unknown number.
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“The unknown subject eventually convinced D.M. to download an app called AI TradeMateFX6Pro from the Apple Store. D.M. invested $485,000 in virtual currency and reported receiving specific instruction for every transfer he conducted,” the complaint says. However, D.M. was never able to withdraw the funds, even after paying extra fees.
The $225 million is only a fraction of the billions US consumers have lost to cryptocurrency investment schemes, also known as pig butchering. The scams can often arrive as a text message or an online chat from a stranger, who’s seeking friendship or even a romantic relationship. The scammer will then build up a rapport with the victim before manipulating them into investing in a fake cryptocurrency investment scheme that’s actually a vehicle to steal their funds.
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“The FBI estimates that cryptocurrency investment fraud led to roughly $9.3 billion in losses in 2024 alone,” said Matthew Galeotti, the Justice Department’s head of the criminal division. “Individuals over the age of 60 were the most affected, with roughly $2.8 billion in losses.”
Despite the huge losses, the attempt to confiscate the $225 million shows the US is making some progress in fighting back. In February, the FBI also said it had proactively contacted thousands of Americans targeted by cryptocurrency investment schemes in an effort to stop the scams before any money changed hands.
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Assuming the US court grants the forfeiture request, the Justice Department hasn’t released details on how it’ll return the $225 million to victims. But in the announcement, federal investigators urged affected users to submit a formal report through the FBI’s Internet Crime Complaint Center (IC3) website.
“If you believe you may be a victim of one of the scams alleged in the government’s complaint, add the code ‘BT06182025’ in the narrative of your complaint, and if you have previously filed a related complaint, make note of the prior complaint in the narrative,” the Justice Department says.
Although the $255 million will only cover 400 plus victims, federal investigators say they’re working to trace the perpetrators behind additional scams. So affected users should consider filing a formal complaint through the IC3 website
About Michael Kan
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