FBI Investigates $112 Million Cryptocurrency Fraud Scheme

The US Department of Justice has announced the seizure of cryptocurrency worth an estimated $112 million linked to cryptocurrency investment scams. The seizure warrants for six cryptocurrency accounts were authorized by judges in Arizona, California, and Idaho.

According to court documents, the cryptocurrency accounts were used to launder proceeds of various cryptocurrency confidence scams. Fraudsters cultivated long-term relationships with victims online, eventually enticing them to make investments in fraudulent cryptocurrency trading platforms. However, the funds sent by victims for these purported investments were instead funneled to cryptocurrency addresses and accounts controlled by scammers and their co-conspirators.

The majority of investment frauds reported to the FBI’s Internet Crimes Complaint Center (IC3) in 2022 involved cryptocurrency, including pig butchering. These scams increased by 183% from 2021 to $2.57 billion in reported losses last year.

Scammers often target victims between the ages of 30 and 49 through social networking and online communications platforms, dating websites, and phone calls and text messages that are meant to appear to have been misdialed. After gaining their trust, scammers introduce the idea of trading in cryptocurrency and direct victims to fraudulent investment platforms or to co-conspirators posing as investment advisors or customer service representatives.

Director Eun Young Choi of the Criminal Division’s National Cryptocurrency Enforcement Team (NCET) emphasized the importance of early notification by victims to law enforcement, thanking those who came forward to notify the FBI when targeted by this scheme. Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division added that the announcement should serve as a reminder of the FBI’s unwavering commitment to investigating and pursuing criminal actors who seek to defraud the American public.

Assistant U.S. Attorneys from Arizona, California, and Idaho, along with members of the NCET and the Criminal Division’s Fraud Section, are in charge of the seizures announced today, with the FBI Phoenix Division investigating the case.

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