US authorities are working to return $8.2 million in crypto frozen and seized from three scam addresses to victims of a con involving fraudulent messages and a fake investment scheme.
The scam involved sending messages to random phone numbers pretending to have the wrong number. From there, the scammers would befriend the recipient, gain their trust and eventually convince them to invest in a crypto scam.
The FBI has identified 33 people snared by the scam; another five are still to be identified, with total losses at $6 million, according to a Feb. 28 statement from the Ohio District Attorney’s office.
The FBI has identified 33 people snared by the scam, with another five still to be identified. Source: US Department of Justice
Investigators conducted a blockchain analysis after a victim filed a complaint to the FBI’s internet Crime Complaint Center in June and found a portion of the stolen funds were converted into Tether (USDT) and transferred to the three cryptocurrency addresses.
After authorities executed a federal seizure warrant, Tether froze the funds and transferred them to a law-enforcement-controlled wallet, where they have sat ever since.
In a Feb. 27 forfeiture complaint filed in an Ohio District Court, acting US Attorney for Ohio Carol Skutnik and assistant US Attorney James Morford are asking the court to have all the funds in the three addresses forfeited so they can return them to the victims.
The pair said the accounts “contained additional funds above the victims’ traceable losses,” which were used in money laundering and wire fraud, totaling $8.2 million.
How the scam worked
Skutnik and Morford said in the complaint that the scammers contacted victims through seemingly harmless, misdirected, or “wrong number” messages sent through text messages, dating applications and professional meet-up groups.
“The fraudster then gained the victim’s trust and affection using various manipulative tactics. Once trust was established with the victim, the fraudster would share how much success they, or someone they knew, had with investing in cryptocurrency,” Skutnik and Morford said.
“This personal testimonial lessened any uncertainties the victims may have had about virtual currencies and eventually had the intended effect to persuade the victim to proceed with the investment.”
Related: Bybit hackers resume laundering activities, moving another 62,200 ETH
The fraudsters allegedly guided victims through opening legitimate crypto exchange accounts and transferring funds to a fake site controlled by the scammers. The site promised lucrative returns and encouraged further investments.
In one instance, authorities allege an Ohio woman was duped into sending the scammers more money, claiming she needed to make additional payments to release her initial funds.
After losing her life savings, $663,000, she was unable to send any more funds, and the fraudsters allegedly threatened harm to her friends and family unless she sent more money.
Blockchain analytics firm Chainalysis says in its Feb. 13 Crypto Scam Revenue 2024 report that generative AI is making scams more scalable and affordable for bad actors, which could result in record losses throughout 2025.
Meanwhile, onchain security firm Cyvers says that pig butchering scams are one of the most significant threats to crypto investors, with losses in the billions across 200,000 identified cases in 2024.
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