The US authorities have successfully recovered and returned $8.2 million in cryptocurrency to victims of a large-scale cryptocurrency investment fraud.
According to the announcement from the Ohio District Attorney's Office on February 28, the funds were frozen from three cryptocurrency addresses linked to a sophisticated fraud scheme. The scammers had targeted victims through fake messages and fictitious cryptocurrency investment plans.
To date, 33 victims have been identified with an estimated total loss of up to $6 million. However, there may be additional unidentified victims, further exacerbating the severity of the case.
According to the FBI investigation, the fraud scheme began with the scammers sending messages to random phone numbers, creating "wrong number" conversations. The scammers then exploited the victims' trust, gradually luring them into fake cryptocurrency investment plans. The investigators traced the flow of funds through blockchain analysis after receiving a complaint from a victim in June 2023.
They discovered that a portion of the stolen funds had been converted to Tether (USDT) and transferred to three different Bit addresses. After obtaining a federal seizure order, Tether quickly froze these funds and transferred them to a cryptocurrency wallet controlled by law enforcement.
US Attorney for Ohio, Carol Skutnik, and Assistant US Attorney James Morford stated that the scammers had approached victims through messages, dating apps, and professional networking groups, using psychological manipulation tactics to gain their trust. They then shared stories of their own or their acquaintances' success in cryptocurrency investments to convince the victims to participate.
Victims were instructed to open accounts on legitimate cryptocurrency exchanges and transfer funds to a fake website, which promised attractive returns but was, in fact, a carefully laid trap.
One notable case involved an Ohio woman who lost her entire $663,000 in savings and was even threatened with harm to her friends and family if she did not continue sending money. This case serves as a stark warning about the cruelty of these scammers and the importance of heightened vigilance in the digital financial world.
According to a report on February 13 by the blockchain analysis firm Chainalysis, artificial intelligence (AI) is making it easier and less costly for bad actors to carry out scams. This could lead to record-breaking losses throughout 2025.
Meanwhile, the onchain security company Cyvers warns that pig butchering scams (a form of cryptocurrency investment fraud) are one of the biggest threats to investors, with losses potentially reaching billions of dollars across over 200,000 identified cases in 2024.
