The order, issued by U.S. District Court Judge Amir H. Ali, seeks to recoup funds stolen through cryptocurrency confidence schemes and return them to the United States.
The scammers gain a potential victim’s trust over time by using various manipulative tactics. Eventually, a crypto investment is introduced with the scammers touting their own supposed success or the successes of associates.
People who fall for such claims are directed to a fake investment platform that mimics a legitimate website. After accounts are opened and funds transferred, the criminals typically toy with the victims by allowing them to withdraw fake “profits” to convince them of the platform’s legitimacy.
After investors transfer a sizable amount into the account, the platform blocks withdrawals, locks the account, and disappears.
The United States uses asset forfeiture to recover assets from scammers that may be then used to compensate victims.
Federal law enforcement and agencies cooperate with other nations under whose jurisdiction the stolen funds are parked.
“Whether they are in our district’s streets or hiding behind a computer screen abroad, the United States will continue to hold fraudsters and grifters responsible, seize money they scam from hardworking Americans, and use our authority to compensate victims,” said U.S. Attorney Jeanine Pirro.
Stacey Moy, FBI special agent in charge of the San Diego Field Office, said cryptocurrency confidence schemes “defraud and manipulate vulnerable victims into losing devastating amounts of money.”
“We hope today’s announcement brings a measure of justice to the victims and serves as a reminder, the FBI will hold fraudsters accountable, no matter where they are located.”
The order to recoup $2.5 million is the latest in a series of actions the U.S. has taken to seize stolen crypto funds.
On May 23, the DOJ announced that the United States had seized more than $868,247 worth of cryptocurrency from perpetrators of a confidence scheme.
Crypto Losses
According to an April report, the FBI’s Internet Crime Complaint Center (IC3) received 149,686 crypto fraud complaints in 2024 totaling $9.3 billion in losses.This was a 66 percent jump in losses compared to 2023, the agency noted.
Americans aged 60 and above were duped most frequently, registering the highest number of complaints and losing the most amount of money among any age group.
The report detailed a 99 percent jump in complaints regarding crypto ATM/kiosk losses. Such ATMs allow people to buy crypto with cash. The purchased crypto is sent to user-designated wallets.
Victims are duped into believing false assertions, such as their accounts getting hacked or their owing back taxes.
Finally, the scammer directs them to deposit money via a crypto ATM. Once deposited, the money goes into the wallet of the scammer. These transactions are irreversible.
“The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals while creating challenges to recover stolen funds,” he said.
“Once an individual sends a payment, the recipient owns the cryptocurrency and often quickly transfers it into an account overseas for cash-out purposes.”
