In summary
- The FBI seized more than $6 million in Cryptocurrency from Southeast Asia-based scammers targeting U.S. citizens.
- The scam resulted in significant financial losses for victims, who were tricked into investing in fraudulent opportunities.
- The FBI was able to trace the victim’s funds on the Blockchain and identify multiple cryptocurrency wallet addresses containing more than $6 million.
The Federal Bureau of Investigation (FBI) has seized more than $6 million in cryptocurrency from Southeast Asia-based scammers who targeted U.S. citizens.
According to a September 26 FBI announcement, the scam resulted in significant financial losses for victims who were deceived into believing they were investing in legitimate opportunities. Assistant Director Chad Yarbrough of the FBI’s Criminal Investigations Division highlighted the impact of these schemes on Americans.
“These types of schemes are devastating and are affecting thousands of Americans every day,” he said in a news release. “The FBI has seen victims lose millions of dollars, taking out second and third mortgages on their homes, all in hopes of finding the next big investment opportunity.”
Victims were guided to transfer funds from their bank accounts to cryptocurrency accounts and then move the assets to fraudulent platforms abroad. Initially, some victims were allowed to withdraw funds to build trust. But eventually they were blocked and lost their investments.
United States Attorney Matthew M. Graves for the District of Columbia wrote in a September 26 announcement that “the fact that these scammers and their accounts are generally located outside the United States will not stop us or our FBI partners to do everything possible to recover proceeds from these scams.”
Data submitted to the FBI’s Internet Crime Complaint Center (IC3) in 2022 showed that such schemes targeted tens of thousands of victims in the United States, resulting in more than $2 billion stolen. The amount of losses reported in IC3 complaints involving cryptocurrencies increased 45% from 2022, from more than $3.8 billion to more than $5.6 billion in 2023.
Special Agent in Charge Joseph E. Carrico of the FBI Knoxville Division said, “the best defense is to educate yourself before making any investment.”
In this case, the FBI was able to trace the victim’s funds on the blockchain and identify multiple cryptocurrency wallet addresses containing more than $6 million. The Justice Department’s Office of International Affairs and the FBI’s Virtual Assets Unit assisted in the investigation. The press release also credited Tether for its role in facilitating the transfer of the seized assets.
Seizing cryptocurrency is significantly more difficult than freezing a bank account, largely due to the decentralized and permissionless nature of the blockchain.
Law enforcement agencies are looking for new instruments to make it easier to seize cryptocurrencies, with UK police and the National Crime Agency recently gaining powers to “seize, freeze and destroy” cryptocurrencies used by criminals.
The development follows Brazilian police’s seizure of $28.7 million in cryptocurrency, according to reports from late August.
Edited by Stacy Elliott.
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