TLDR
- US authorities recovered $7 million from fraudsters who created fake cryptocurrency investment websites
- Scammers used social engineering to build trust before directing victims to spoofed platforms
- Money was laundered through over 75 bank accounts under shell companies before being sent abroad
- When victims tried to withdraw funds, scammers demanded more money claiming taxes were owed
- The US Secret Service seized the funds in 2023 and reached a settlement to return money to victims
The Scam Operation
The United States government has successfully recovered $7 million that will be returned to victims of a sophisticated cryptocurrency investment scam. The funds were seized by the US Secret Service from a foreign bank account in 2023. This action follows an extensive investigation into fraudulent activities targeting cryptocurrency investors.
The scam involved perpetrators who carefully established relationships with victims. They spent time earning trust before introducing victims to what appeared to be legitimate cryptocurrency investment opportunities. These social engineering tactics created a false sense of security.
Victims were directed to websites that looked like real cryptocurrency investment platforms. However, these sites were carefully designed fakes. They were created to mimic legitimate platforms while actually funneling money to the scammers.
How the Money Moved
Once victims made deposits, their funds were quickly moved through a complex network. Court documents reveal that the scammers used more than 75 different bank accounts. These accounts were set up under various shell companies to hide the money trail.
The platforms showed victims false information about their investments. Victims were led to believe their money was growing and making substantial profits. This false reporting encouraged additional investments.
When victims attempted to withdraw their supposed earnings, they faced more demands. Scammers used coercive tactics to extract additional funds. They often claimed victims needed to pay taxes on their supposed profits before withdrawals could be processed.
The fraud operation included sophisticated money laundering techniques. Funds were transferred through multiple accounts before being sent overseas. The wire transfers were deceptively labeled as domestic transactions, even though the money was being moved to banks outside the United States.
Recovery Efforts
In June 2023, agents from the Secret Service took action. They seized funds connected to the scam from an account at a foreign bank. This seizure was a major step toward recovering victims’ money.
The United States began a civil forfeiture action against these seized funds. This legal process included filing a civil forfeiture complaint in U.S. District Court. The government provided notice to all parties who might have a claim to the money.
The foreign bank that held the account made its own claim to the funds. After negotiations, the United States reached a settlement agreement. The agreement secured $7 million to be forfeited to the United States government.
The recovered funds will now be distributed to victims. People who lost money in this scam have been urged to contact the Secret Service. They can submit petitions to recover their losses through an official process.
The announcement of the recovery was made by Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia. Matthew McCool, Special Agent in Charge for the United States Secret Service’s Washington Field Office, joined in making the statement.
Related Crypto Scams
This case is part of a growing trend in cryptocurrency-related crimes. Blockchain analytics firm Chainalysis has noted in its 2025 Crypto Crime Report that crypto crime has become more professionalized. Efficient cyber syndicates now dominate this criminal space.
Other recent crypto scams have used similar tactics. Australian federal police recently alerted 130 people about a message scam targeting crypto users. These messages spoofed the same “sender ID” as legitimate exchanges like Binance.
Another string of scam messages reported in March spoofed Coinbase and Gemini. These messages attempted to trick users into setting up new wallets using recovery phrases controlled by fraudsters. This would give scammers direct access to victims’ funds.
Cybersecurity firm Malwarebytes issued a warning about a new form of crypto-stealing malware. The malicious software was hidden inside a “cracked” version of TradingView Premium. Users downloading this pirated software unknowingly installed the malware.
Microsoft’s Incident Response Team discovered cyber scammers using a new remote access trojan. This malware specifically targets cryptocurrency held in 20 different wallet extensions for the Google Chrome browser. The trojan gives attackers remote access to victims’ wallets.
Judge Rossie D. Alston, Jr. issued the settlement order between the United States and the foreign bank. Assistant U.S. Attorneys Zoe Bedell and Kevin Hudson handled the legal proceedings for this case.
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