The US Department of Justice (DoJ) recently made a significant move in the fight against cryptocurrency fraud by seizing six wallets believed to have been used to launder the proceeds of investment scams. The total amount found in these wallets was around $112 million, a fraction of the more than $3.3 billion lost to investment fraud in 2022. According to the FBI, cryptocurrency fraud accounted for the majority of these losses, totaling $2.6 billion and marking a 183% increase from the previous year.
Judges in various districts including Arizona, California, and Idaho authorized the seizures of these wallets. The funds in these wallets were linked to a type of investment fraud known as “pig butchering,” a scheme where scammers befriend victims on social media or dating platforms before introducing them to cryptocurrency trading. The victims are directed to fraudulent apps or websites that appear legitimate, showing fake profits to lure them into investing more money. When victims attempt to withdraw their funds, they discover they have been scammed and are often asked to pay additional fees or taxes to access their accounts.
Eun Young Choi, director of the Justice Department’s National Cryptocurrency Enforcement Team (NCET), emphasized the importance of seizing illicit funds to combat these schemes. The DoJ is committed to using all available tools to disrupt and deter cryptocurrency scams, including tracking the flow of funds on the blockchain and seizing assets to return them to victims. Additionally, efforts are being made to dismantle the online infrastructure used by scammers to perpetrate these frauds.
To prevent falling victim to such scams, the DoJ advises potential investors to be cautious of unsolicited offers and seek advice from trusted sources. Victims of investment fraud are encouraged to report incidents to law enforcement promptly to seek assistance.
As the DoJ continues its efforts to crack down on cryptocurrency fraud, it serves as a reminder for individuals to exercise vigilance and due diligence when engaging in investment opportunities involving digital assets. By staying informed and being cautious, investors can protect themselves from falling prey to fraudulent schemes in the ever-evolving landscape of cryptocurrency.