Secret Service Intensifies Global Crypto Fraud Fight, Recovers $400 Million

The U.S. Secret Service has significantly intensified its global efforts to combat cryptocurrency-related financial crimes. This escalation in enforcement reflects the evolving landscape of digital fraud and the increasing sophistication of scammers. The Secret Service's Global Investigative Operations Center (GIOC) is at the forefront of this initiative, collaborating with law enforcement agencies in over 60 countries to provide training on tracking and halting digital fraud.

The scams often begin with deceptively simple messages and friendly interactions, luring victims to fake crypto investment websites that mimic legitimate platforms with professional designs and customer support. Victims, enticed by initial small profits, often invest more, sometimes borrowing money. Eventually, the sites stop responding, and the funds disappear. Jamie Lam, a Secret Service investigative analyst, described the modus operandi: "They’ll send you a photo of a really good-looking guy or girl. But it’s probably some old guy in Russia."

Using digital tools and meticulous investigation, agents have successfully traced fake sites through domain names, crypto wallets, and IP addresses. In one instance, a glitch in a VPN allowed investigators to pinpoint the location of a scammer. "It’s not always that hard," Lam noted. "Sometimes you just need patience."

The GIOC employs a combination of spreadsheets, subpoenas, and open-source data to seize digital assets. Over the past decade, the team has recovered nearly $400 million in digital assets, most of which were held in a single secure crypto wallet. Kali Smith, the agency’s crypto strategy lead, emphasized the importance of training for countries with weak enforcement or residency-for-sale programs. "Sometimes after just a week-long training, they can be like, ‘Wow, we didn’t even realize that this is occurring in our country,’” Smith said during a training session.

One notable case involved an Idaho teenager who was tricked into sending a nude photo and then blackmailed. The scammer demanded $300, threatening to share the image with the teen's family. The teen paid twice before contacting the police. The GIOC traced the payments, which passed through another teen used as a money mule, and ended in a wallet with $4.1 million in crypto tied to a Nigerian passport. The suspect was subsequently arrested in England.

Crypto fraud has become the leading cause of financial losses in U.S. online crime. In 2024, Americans lost $9.3 billion to crypto scams, with older adults losing $2.8 billion. Some cases have turned violent, including instances where individuals were tortured for their wallet passwords and parents of teen hackers were kidnapped.

Companies have assisted the Secret Service by freezing wallets and tracing funds. One recovery effort resulted in the return of $225 million in Tether connected to romance scams. This active crackdown represents a significant step in safeguarding the digital financial system, highlighting the global scale of crypto-related fraud and the need for continued vigilance and cooperation among international law enforcement agencies.