DoJ seizes $112M in stolen crypto, will try to return funds to victims

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Six virtual currency accounts allegedly used to launder funds for a number of crypto investment scams have been seized by the US Justice Department (DoJ) along with an estimated $112 million in virtual currency.

As detailed in warrants greenlit by judges in Arizona, California, and Idaho, the scammers persuaded victims to invest in fraudulent crypto trading platforms before funneling the funds to their own wallets.

Authorities investigating the case have pledged to return as much of the funds as possible to the victims. 

The scheme described in the DoJ’s statement bears all the hallmarks of a so-called ‘pig-butchering scam,’ specifically, the fact that the scammers forged long-term relationships with their victims online.

Read more: Hong Kong investment manager loses $1.5M inheritance in crypto scam

Crypto fraud makes up most reported losses 

According to the DoJ, confidence scams make up the largest portion of losses being reported to the FBI. In 2022 alone, they totaled $3.31 billion.

But crypto fraud, including pig butchering scams like this one, makes up the majority of this figure, representing $2.57 billion of last year’s losses — a 183% increase from 2021.  

In response to the growing threat, the DoJ announced the creation of the Crypto Assets and Cyber Unit back in May 2022.

Last month it claimed to have “nearly filled” a call for 20 extra staff made alongside the unit’s announcement and is still “planning to add additional staff,” according to CoinDesk.

The DoJ also stressed the need to raise public awareness of these scams, asking the public to “be wary of people you meet online; seriously question investment advice, especially about cryptocurrency, from people you have not met in person; and remember, investments that seem too good to be true, usually are.” 

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