US Secret Service expands global push against crypto fraud
The scam started with a message and then with a friendly exchange. The Stranger has pointed victims to professional-looking cryptocurrency investment sites, including sophisticated designs, charts and even customer support. The initial deposit showed a small profit. That was what happened next. Encouraged, the victim sent more and even borrowed money to catch up. Then, without warning, the platform stopped responding. The account balance has disappeared.
“That’s how they do it,” Jamie Lamb, an investigative analyst for the US Secret Service, told Bermuda law enforcement officials last month. “They will send you photos of really good looking guys and girls. But it’s probably the old Russian man.”
Secret Service investigators traced the scam to the domain names behind fake investment sites. Using open source tools, they learned when it was registered, who and how it was paid. It was referring to another wallet due to cryptocurrency payments. A simple VPN failure has released IP addresses.
LAM is part of the Global Research Operations Centre or GIOC, an institution that is a team specializing in digital financial crime. Those tools are software, summons, and spreadsheets, not badges or guns.
“That’s not always that difficult,” Lamb said. “Sometimes, it just requires patience.”
Patience and digital tools have helped GIOC seize nearly $400 million in digital assets over the past decade. This is a number that has not been previously reported, according to people familiar with the issue that asked them not to identify discussion about private conversations.
Many of that Zarobs sit in a single cold storage wallet that is currently ranked at the most valuable location. After leading the crackdown on digital currencies such as Liberty Reserve and E-Gold in the 1990s, the institution most famous for protecting the US president became one of the world’s largest cryptocurrency managers.
At the heart of the operation is Kali Smith, the lawyer who directs the Secret Service’s cryptocurrency strategy.
Her team has conducted workshops in more than 60 countries and trained local law enforcement and prosecutors to uncover digital crimes. Agents are targeted to jurisdictions where criminals use weak surveillance or sales programs and provide free training.
“After just a week of training, sometimes you think, ‘Wow, I didn’t realize this was happening in our country,'” she said.
Last month, the team flew to Bermuda, the UK’s overseas territory that was sold to digital asset companies in one of the world’s most comprehensive crypto frameworks, and in the process was subject to new threats.
“Technology and financial services are great for economic growth, but they can also be exploited,” Bermuda Governor Andrew Merdock said in an interview. “In addition to profits, we need strong investigative skills to deal with abuse under the law.”
In a meeting room on the hill overlooking Hamilton Harbor, Smith told the class that victims of the fraud usually see the opportunity. “They think they’re safe using Bitcoin, but they’re not,” she said.
One of the actual incidents involved a teenager in Idaho who thought he would flirt online and sent nude photos to strangers. The stranger then asked for $300 or the image was sent to his relatives. He paid twice before going to the police.
GIOC analysts have reconstructed the horror with screenshots, receipts and blockchain data. According to analysts who asked not to be appointed because the investigation was ongoing, the payments were routed through another American teenager who was forced to act as money raba, processing around $4.1 million in around 6,000 transactions and collected in accounts registered on their Nigerian passport.
British officers arrested a person who was terribly suspected when they landed in Guilford, England. Analysts said he was in custody waiting for extradition.
Scams tied to digital currency have now promoted the loss of internet crime for the majority of us. Americans reported $9.3 billion in crypto-related fraud in 2024. More than half of the $16.6 billion record that year is shown by FBI data. The elderly victims have gained the largest share, losing nearly $2.8 billion, many of whom are heading towards fake investment sites.
Several schemes have spread to real-world violence. In New York, Two investors have been indicted He allegedly invited and tortured a longtime friend inside the townhouse to force him to access a digital wallet. In Connecticut, six men were charged with accusing the parents of teenage hackers who stole $245 million in Bitcoin and begging them in a failed ransom attempt.
To regain stolen funds, Secret Services is leaning towards industry partners. Coinbase Tether has publicly acknowledged support in recent cases, providing trace analysis and wallet freezes. One of the biggest recoups involved a token covered in dollars known as tethers, linked to USDT $225 million and romance investment scams.
“We’ve been chasing money for 160 years,” said Patrick Freeney, head of the New York Field office of the agency that oversees Bermuda. “This training is part of that mission.”