US Secret Service unmasks $400M crypto scam network

US Secret Service Uncovers $400M Crypto Scam Network

The US Secret Service’s Global Investigative Operations Center (GIOC) has recovered nearly $400 million in stolen crypto over the past decade, emerging as a key player in combating digital financial crimes.

How the Scams Work

• Criminals lure victims via fake investment platforms, often posing as friendly strangers.
• Victims see small initial gains before being tricked into sending larger sums—sometimes borrowing money.
• Once funds are deposited, the platform disappears, leaving victims with vanished balances.
• "They’ll send you a photo of a really good-looking guy or girl. But it’s probably some old guy in Russia," said a Secret Service analyst.

Tracking the Criminals

• GIOC uses open-source tools to trace scams through domains, crypto wallets, and even VPN glitches exposing IP addresses.
• Much of the seized crypto is stored in a government-controlled cold wallet, one of the largest known holdings.

Global Training & Enforcement

• Kali Smith, head of the Secret Service’s crypto strategy, has trained law enforcement in 60+ countries.
• Many jurisdictions are unaware of crypto crimes until after training.
• Bermuda, despite strong crypto regulations, remains a potential target for bad actors.

Escalating Crypto Crime Trends

• $9.3B lost to crypto scams in the US in 2024, with elderly victims hardest hit ($2.8B losses).
• Some cases turn violent, including kidnappings and torture to extort crypto access.
• The Secret Service collaborates with firms like Coinbase and Tether to freeze fraudulent accounts.

Key Takeaway

The GIOC’s success highlights the growing threat of crypto scams and the need for global enforcement coordination.