The U.S. Department of Justice (DoJ) has announced that it has seized six cryptocurrency wallets believed to have been used to launder investment fraud proceeds.
The wallet contains an estimated $112 million, a drop in the ocean compared to over $3.3 billion lost to investment fraud in 2022. Cryptocurrency scams accounted for the majority of this figure ($2.6 billion), with the value of related scams jumping 183%. From 2021, according to the FBI.
Judges for the Districts of Arizona, Central California, and Idaho approved the seizure.
Money in six cryptocurrency wallets is believed to have been stolen in a “slaughter of pigs” scam. This is a form of investment fraud that often begins with the scammer developing friendships with victims on social media and dating sites.
Read more about the pig slaughter scam: Researchers warn about Apple App Store cryptocurrency scam apps.
Perhaps months after building trust, the scammer introduces the idea of trading cryptocurrencies and directs the victim to a legitimate-looking app or website designed for that purpose.
These platforms are built to show investors that they are making big profits on their first outlay, but in reality the money goes directly to the scammers.The goal is to keep building trust. To help, persuade them to invest more and more, perhaps even by allowing them to withdraw a small amount of their ‘profit’.
Only when the victim decides to withdraw a large sum of money does the victim realize that the whole thing is a scam. Often times they are told to pay an exit fee or tax to access their account, but this also applies to scammers.
“Depriving fraudulent organizations of their ill-gotten gains is an important part of our strategy to counter these ruthless schemes,” said the National Cryptocurrency Enforcement Team (NCET) of the Department of Justice’s Criminal Affairs Division. Director Eun Young Choi said.
“We will not allow cryptocurrency trust schemes to track money on the blockchain, seize cryptocurrencies and return funds to victims, and target and destroy online infrastructure used by fraudsters. We will continue to use all the tools at our disposal to disrupt and deter.”
The Justice Department urged would-be investors to be skeptical of unsolicited communications and advice, and encouraged victims to come forward early and seek law enforcement help.
