Authorities have seized over $6 million worth of cryptocurrency from wallets connected to Southeast Asia based scammers targeting United States citizens with confidence investment schemes.
On Sept. 26, the US Attorney’s Office for the District of Columbia reported the fraud saw “one or more individuals” lose millions of dollars after being misled into believing they were investing in legitimate crypto enterprises.
The FBI traced the stolen funds on the blockchain and located multiple crypto wallet addresses connected to the scam, which still held over $6 million of victims’ digital assets.
Tether says it assisted authorities by freezing the scammers wallets, aiding in the “swift recovery,” of the stolen crypto.
Attorney for the District of Columbia, Matthew Graves, said that “typically,” the fraudsters and their accounts are located abroad, making recovery difficult.
“In these scams, fraudsters trick US citizens into believing they are transferring funds to cryptocurrency investment opportunities when, in fact, they are just unwittingly turning their money over to the fraudsters,” he said.
According to the US Attorney’s Office for the District of Columbia, victims of these scams are approached through various means, such as misdirected text messages, dating applications and investment groups.
After gaining users trust, scammers recommend a crypto investment but direct them to investment platforms hosted on fraudulent websites that mimic legitimate ones.
Some of the fraudulent platforms can appear to offer lucrative returns and allow temporary withdrawals; behind the scenes, all deposits are routed to a wallet address controlled by scammers.
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FBI Criminal Investigative Division assistant director Chad Yarbrough said crypto investment scams such as the one they just uncovered are “devastating” and impacting thousands of Americans daily.
“The FBI has seen victims lose millions of dollars, take second and third mortgages on their homes, all in the hopes of finding the next big investment opportunity,” he said.
According to the FBI’s annual cryptocurrency fraud report for 2023, almost 71% of crypto fraud reported to its Internet Crime Complaint Center (IC3) was related to investment scams.
Investment fraud was the most reported crypto scam and saw the most reported losses, with over $3.9 billion stolen by scammers.
In the report, the FBI said it received complaints from over 200 countries, but most of the complaints and losses were from the US.
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