DOJ: $25M Seized From Scammers Who Robbed Crypto Fraud Victims a Second Time

The victim had already lost the money once. According to an analysis of the court complaint by the US law firm Armstrong & Bradylyons, a British investor had lost more than 2 million pounds to a fake investment firm by the time the second set of fraudsters made contact. They offered to get it back. They posed as an officer of the UK's National Crime Agency, as staff of a real asset-recovery company and as the tax authority, HM Revenue and Customs, and they had paperwork to match. Between October 2025 and January 2026 the victim paid about 1.7 million pounds more in fees to release money that did not exist.

On 21 July 2026 the US Attorney's Office for the District of Columbia announced five civil forfeiture complaints seeking more than $25 million in cryptocurrency taken from fraud victims, most of them in the United States and Canada. The smallest, against about $284,904 in crypto, came from that recovery scam. The National Crime Agency referred the case to American investigators in January 2026.

Five cases, one pipeline

The complaints came out of investigations by the Secret Service's Washington Field Office and its Cyber Fraud Task Force and were filed in federal court in Washington as part of the Scam Center Strike Force. CoinDesk and Bitcoin.com, reporting the announcement, described them. The largest, about $12.1 million, came from romance scams with more than 200 victims, the money routed through hundreds of wallets and mixed with other victims' funds. The second, about $10.4 million, came from fake investment platforms, after Canadian authorities flagged a network of wallets that investigators linked to more than 270 suspected victim transactions. Those two make up about 85% of the total.

The other three were smaller and more personal. Nearly $2.4 million came from a fake trading platform used by two victims and was frozen across six addresses. About $1.2 million belonged to a victim in the Washington area whose platform cut off contact the moment a withdrawal was requested. The last, about $285,000, was the recovery scam.

Investigators placed most of the suspected launderers in Southeast Asia and found internet addresses linked to China, Malaysia and Cambodia, the countries most associated with the region's scam compounds. The Secret Service said the investigations were continuing and that it was still working to identify suspects.

How the government takes back crypto

A civil forfeiture complaint is a lawsuit against the property itself rather than against a person, which is why the court cases carry names such as United States v. Approximately 284,903.78 USDT. It works like the government suing a seized car used in a crime: prosecutors must show the money is the proceeds of fraud or was used to launder it, but they do not have to catch or convict anyone. No individual was charged in any of the five cases.

The money in all of them was held in USDT, a stablecoin issued by the company Tether. A stablecoin is a token designed to hold a steady value of one dollar, which makes it a digital dollar that can be sent anywhere in minutes. It is the scam networks' favourite currency, but it has a weakness for them: Tether can freeze the tokens at a particular address, much as a bank can freeze an account. Investigators trace the stolen funds across the blockchain, the public ledger that records every transfer, ask Tether to freeze the addresses where the money stops, and then go to court.

Anyone who believes the frozen money is theirs can file a claim. If nobody proves a legitimate claim, the court can order the funds forfeited to the government, and victims can then apply to have them returned through a process called remission. Court records show the complaints were still open in October 2026.

Why the second scam works

The recovery scam is the cruellest version because of who it targets. Someone who has just lost savings to a fake investment platform is looking for a way to get it back, and knows the police rarely recover crypto. That makes them easy to find and easy to persuade. The fraudsters often pose as police, lawyers, regulators or blockchain tracing firms. They may claim the money has already been found and is waiting in a frozen account, and that only a tax, a legal fee or a release charge stands in the way.

The FBI's 2025 Internet Crime Report warns that victims of crypto investment fraud are also targeted by recovery scams claiming to help recover lost funds. A legitimate recovery, when it happens, looks like these five complaints: slow, public, through a court, and with no upfront fee.

The wider campaign

The Scam Center Strike Force was launched in November 2025 by Jeanine Pirro, the US Attorney for the District of Columbia, together with the Justice Department's Criminal Division, the FBI and the Secret Service, to go after Southeast Asian scam compounds and the money they move. When the July cases were announced, the office said it had recovered more than $800 million. On 9 September 2026 the Secret Service said the Strike Force had restrained $52 million in one day in an action against Xinbi Guarantee, a Chinese-language marketplace on Telegram used to launder scam money, bringing its total to about $938 million.

Other countries are doing the same. Interpol's Operation First Light 2026, which ran from January to April across 97 countries, led to 5,811 arrests, identified more than 142,000 victims and intercepted about $293 million. In Thailand, one 20-year-old suspect's wallet had processed more than $122.5 million in ten months for a romance-scam laundering scheme.

Against the scale of the fraud, these sums remain small. Americans reported $7.2 billion lost to crypto investment scams in 2025 alone, according to the FBI.