U.S. Seeks $26.4M in Crypto From Five Fraud Cases

On July 21, prosecutors in Washington filed five civil-forfeiture complaints seeking about $26.4 million in cryptocurrency traced through separate international fraud investigations. The filings were lodged by the U.S. Attorney’s Office for the District of Columbia and ask courts to transfer specified tokens to the government.

One complaint traces more than 270 transactions from alleged victims of fraudulent investment platforms. Another describes over 200 romance-scam victims and hundreds of intermediary addresses used to commingle funds, which complicated tracing. The filings indicate laundering networks were concentrated in Southeast Asia, with related internet addresses in China, Malaysia and Cambodia. The smallest case seeks roughly $285,000 and involves a repeat victim who paid a fee to fraudsters claiming to have recovered earlier losses.

Each complaint requests a restraint order to prevent the identified cryptocurrency from being moved while a civil forfeiture action proceeds. Civil judicial forfeiture acts against property and does not require a criminal conviction; prosecutors must show by a preponderance of the evidence that the assets are connected to unlawful activity. A complaint does not complete forfeiture or determine criminal guilt; final seizure, suspect identities and any victim restitution must be resolved in court.

The Justice Department reported that roughly $800 million in cryptocurrency has been restrained or recovered through enforcement by its Scam Center Strike Force. A strike force report dated June 18 used a different metric and cited $832.8 million restrained. The department’s figures use different terms and dates and are not presented as a single tally of victim payments.

Restraining or recovering assets does not automatically restore funds to victims. Eligible claimants may receive forfeited assets through the department’s remission or restoration process, or funds can be directed to courts for restitution. The July filings include no timetable, distribution amount or list of eligible claimants. Courts must still decide whether to grant forfeiture, whom investigators ultimately identify, and how much of the cryptocurrency at issue, if any, will reach victims.