US seizes $225 million in the biggest crypto scam; is this a turning point for regulation?

In a sweeping move against crypto crime, US authorities have seized $225.3 million in digital assets tied to a sprawling international investment fraud ring.

The bust marks the largest-ever recovery from a cryptocurrency confidence scam, exposing a sophisticated laundering network and underscoring the rise of financial cybercrime.

The seizure, announced on 18 June 2025, follows a civil forfeiture complaint filed by the US Attorney’s Office for the District of Columbia. Investigators from the FBI and US Secret Service tracked hundreds of thousands of blockchain transactions, unmasking illicit flows used to defraud over 400 victims worldwide, including dozens in the US.

“This seizure marks the largest cryptocurrency seizure in US Secret Service history,” said Shawn Bradstreet, Special Agent in Charge, as quoted by Reuters. “These scams prey on trust, often resulting in extreme financial hardship.”

US Attorney Jeanine Ferris Pirro added, “With the support of President Trump and Attorney General Bondi, this office is working to return stolen funds to victims—and strip criminals of their digital loot,” as per the DOJ press release.

Legal breakthrough under evolving US crypto law

The enforcement action, though civil, not criminal, was enabled by advanced anti-money laundering (AML) laws and represents a growing trend in crypto-related litigation. Prosecutors filed the complaint in the District of Columbia District Court, leveraging new tools to trace decentralised criminal networks.

It coincides with a renewed push to regulate crypto under the GENIUS Act, which recently passed the US Senate and is now headed for a House vote. The bill aims to create federal oversight for stablecoins and digital asset infrastructure, long viewed as a blind spot in financial regulation.

Crypto’s expanding footprint in the US

The seizure highlights the scale of the US crypto ecosystem. Circle’s USDC stablecoin, which was co-founded with Coinbase, has a market capitalisation of $61.4 billion, making it the second largest in the world, according to Reuters.

According to Bloomberg, Coinbase—the largest publicly listed crypto exchange in the US—handled approximately 11 per cent of global crypto transactions in 2024, with the US accounting for nearly 25 per cent of all stablecoin activity. The country remains the world’s single largest market for digital assets.

Crypto scams surge to record levels

The action comes amid a dramatic rise in crypto scams. According to Chainalysis, investment fraud and confidence scams generated between $9.9 and $12.4 billion in illicit proceeds in 2024, a year-on-year increase of over 35 per cent.

These scams, often labelled “pig butchering,” involve long-term deception, where victims are emotionally manipulated into transferring funds into fake crypto investment platforms.

Meanwhile, the FBI’s Internet Crime Complaint Centre (IC3) reported $5.8 billion in reported losses from crypto-related fraud in 2024, up from $5.6 billion in 2023. Institutional thefts are also surging, with $2.2 billion stolen in hacks last year alone, as per Chainalysis.

The global trail: From Southeast Asia to the US

US law enforcement reportedly traced scam proceeds through laundering networks spanning Southeast Asia, including Philippine-linked addresses, and illicit trading platforms in Myanmar and Thailand.

As per The Wall Street Journal, one syndicate, Huione, was linked to North Korean hackers and laundered over $28 billion via crypto exchanges and shell companies, prompting recent US Treasury sanctions.

“These are not lone-wolf scammers,” said FBI Special Agent Sanjay Virmani, as quoted by Reuters. “They are coordinated criminal networks exploiting international gaps in oversight.”

Victims to receive restitution

The US government has secured custody of the funds and is now working to return them. Victims can report their cases via the FBI’s IC3 portal (www.ic3.gov), using code BT06182025 for case identification.

The investigation is led by Assistant US Attorneys Kevin Rosenberg and Rick Blaylock Jr., along with the DOJ’s Computer Crime & Intellectual Property Section (CCIPS). The stablecoin firm Tether also played a key role by cooperating with investigators.

What’s next?

While the Trump administration recently disbanded the National Cryptocurrency Enforcement Team, the DOJ says crypto enforcement remains a top priority. Deputy Attorney General Todd Blanche has pledged “aggressive pursuit of decentralised fraud rings,” according to internal memos reported by CNN.

Still, the threat continues to evolve. Experts warn of rising use of AI-driven phishing scams, making it harder for even tech-savvy investors to detect fraud.

“This is the Wild West of finance. And it’s not just the West—it’s the Wild North, East and South too,” said Pirro at the press conference, as quoted by CNN.

As digital currencies become mainstream, so too do the risks. The record-breaking $225 million seizure is not just a headline—it’s a glimpse into the murky world of decentralised crime.

But with new legislation, public–private cooperation, and more tech-savvy investigators, the tide may be turning. Crypto isn’t going anywhere—but neither are the scammers. Now, regulators must race to keepup.

(With inputs from the agencies)