Crypto crackdowns yield $400M for U.S. secret service

The U.S. Secret Service has seized nearly $400 million in cryptocurrency over the past decade, recovering stolen assets from a growing wave of online scams and fraud networks. The agency’s investigations have placed it among the largest crypto custodians globally, with much of the seized crypto now held in a single cold-storage wallet, according to a new Bloomberg report.

Investigators from the Global Investigative Operations Center (GIOC) have used blockchain tracing tools to untangle international fraud schemes, many of which begin with simple online messages directing victims to fake crypto investment websites. These platforms often display fabricated returns to encourage larger deposits before disappearing entirely. They’ll send you a photo of a really good-looking guy or girl, explained Jamie Lam, a Secret Service analyst. But it’s probably some old guy in Russia.

Digital footprints reveal fraud networks

The agency has tracked illicit crypto through domain records, blockchain forensics, and even VPN errors that exposed scammer locations. These investigations underscore how crypto’s transparency, a supposed advantage for criminals, can become a liability when paired with skilled analysis.

One investigation led analysts through nearly 6,000 transactions, linking stolen funds to a Nigerian passport. The suspect was later arrested in England, following coordination with British authorities.

In another case, a teenager in Idaho was blackmailed with compromising photos, and the money was funneled through another teen who had been coerced into acting as a mule.

To recover funds, the Secret Service has worked with firms like Coinbase and Tether, which helped trace and freeze digital assets. In one instance, the agency recovered $225 million in USDT connected to romance-investment scams.

At the helm of the agency’s global crypto strategy is Kali Smith, who leads training programs for law enforcement agencies in over 60 countries. These workshops target jurisdictions with loose oversight or lax residency laws, often ideal environments for scammers.

Crypto scam losses mount in 2025

Meanwhile, losses from crypto-related hacks and scams have soared to $2.2 billion in the first half of 2025, according to CertiK’s security report. Wallet breaches alone caused $1.7 billion in damages, with phishing scams responsible for another $410 million.

Two major events, the Bybit hack ($1.5B) and Cetus Protocol exploit ($225M) skewed the numbers upward. Excluding those, losses align with previous years at around $690 million.

Ethereum was the most targeted blockchain, suffering $1.6 billion in damages across 175 incidents. CertiK warned of increasingly sophisticated phishing strategies and urged users to verify sources, avoid suspicious links, and use hardware wallets.