The Justice Department filed a civil forfeiture complaint Wednesday (June 18) targeting over $225.3 million in cryptocurrency that it said is connected to the theft and laundering of funds from victims of cryptocurrency investment fraud schemes.
Filed in the U.S. District Court for the District of Columbia, the complaint alleges that the cryptocurrency addresses that held the crypto were part of a blockchain-based money laundering network that dispersed proceeds of fraud schemes to conceal the source of the illegally obtained funds, the Justice Department said in a Wednesday press release.
A law enforcement investigation into the money laundering network found that more than 400 suspected victims are believed to have lost millions of dollars after being duped into believing they were making legitimate cryptocurrency investments, according to the release.
The investigation was conducted by the U.S. Secret Service, Federal Bureau of Investigation (FBI) and private partners, the release said.
The seizure of the $225.3 million in funds marks the Secret Service’s largest seizure of cryptocurrency, per the release.
“Today’s civil forfeiture complaint is the latest action taken by the Department to protect the American public from fraudsters specializing in cryptocurrency-based scams, and it will not be the last,” Matthew R. Galeotti, head of the Justice Department’s Criminal Division, said in the release. “These schemes harm American victims, costing them billions of dollars every year, and undermine faith in the cryptocurrency ecosystem.”
The FBI’s Internet Crime Complaint Center (IC3) said in April that there was a significant rise in cryptocurrency fraud, with at least $9.3 billion in losses reported in 2024 — a 66% increase over the previous year. These losses stemmed from investment scams, extortion, sextortion and fraudulent activity involving cryptocurrency ATMs and kiosks.
The FBI’s IC3 found that cryptocurrency investment fraud accounted for 41,557 complaints and $5.8 billion in losses in 2024, according to their 2024 Internet Crime Report. Compared to the previous year, the number of complaints was up 29% and the amount of losses was up 47%, according to the report.
The FBI said in a March 14, 2023, public service announcement that there had been a spike in cryptocurrency investment schemes. The agency these schemes involve criminals who target victims online, use fictitious identities to build rapport with them, introduce the topic of cryptocurrency, and convince victims to invest in crypto via fraudulent websites or apps.
