US Attorney Jeanine Ferris Pirro said federal authorities have stopped and seized more than $580 million in cryptocurrency tied to fraud networks in Southeast Asia, marking a major expansion in the government’s crackdown on crypto fraud abroad.
The funds were blocked by the Justice Department’s Scam Center Strike Force, a task force created in November to target cryptocurrency investment and loyalty schemes linked to China’s international criminal organizations.
Officials said the groups use social media and messaging to target US victims and extort billions of dollars each year. Recent estimates put the annual loss to Americans at about $10 billion.
“In just three months, we have made significant progress, freezing, seizing, and confiscating over $578 million worth of crypto from these criminals,” Pirro said in a statement. He said his office will seek seizure by the courts and he intends to return the money to the victims.
Authorities describe these schemes as “pig-slaughtering” operations, where fraudsters build relationships with victims before directing them to fraudulent crypto investments. Victims are lured into buying legitimate digital assets and then transfer them to fake trading platforms controlled by scam networks.
Jobs often run out of protected compounds in parts of Southeast Asia, including Burma, Cambodia, and Laos. US officials have said that some workers inside the compounds are victims of trafficking who are forced to carry out scams and are threatened with violence. In some areas, the income generated from fraudulent activities accounts for a large part of the local economic output.
Strike Force focuses on identifying senior individuals within criminal networks, including planners and money launderers who move money through blockchain transactions and shell accounts. Investigators track funds to exchanges and funds to disrupt cash-out points and stop assets before they are liquidated.
The program includes the US Attorney’s Office for the District of Columbia and several divisions of the Department of Justice, as well as the Federal Bureau of Investigation, the US Secret Service, and the Internal Revenue Service’s Criminal Investigation unit. The US Attorney’s Offices in Rhode Island and Western Washington State are also participating.
The Department of Justice said the Army will continue to target infrastructure, financial channels, and leadership structures linked to fraud networks.
Crypto crime hit $154 Billion last year
Data from Chainalysis shows that illegal crypto addresses will receive at least 154 billion dollars by 2025, which is a 162% year-over-year increase, with authorized organizations driving the majority of the operation. Nations including Russia, Iran, and North Korea have played a major role, using blockchain infrastructure to circumvent sanctions, money laundering, and grand theft.
Stablecoins accounted for 84% of illegal transaction volume, the report said.
The report also highlights the rise of Chinese money-laundering networks that provide “fraud as a service” and other illegal infrastructures that are stacked with money. Although illegal activity still represents less than 1% of the total crypto volume, the scale and geopolitical dimension of the activity poses a growing risk to regulators, law enforcement, and national security.
