DOJ Seizes $225M in Crypto Tied to Fraudulent Investment Schemes

The U.S. Department of Justice, also called the DOJ, announced on Wednesday that it had seized more than $225 million in digital assets connected to fraudulent investment schemes. 

The civil forfeiture action, carried out by the U.S. Secret Service, targets cryptocurrency funds allegedly laundered through fake crypto investment scams that defrauded hundreds of individuals.

Filed in the District of Columbia, the complaint focuses on the assets themselves, rather than naming specific defendants. Interim U.S. Attorney for D.C., Jeanine Pirro, said authorities intend to return the funds to the victims, though exact timelines and procedures remain unclear. 

The DOJ estimates that more than 400 individuals were duped into investing in fictitious crypto platforms that led to massive financial losses.

The Role of “Pig Butchering” 

The DOJ credited stablecoin issuer Tether for its cooperation in helping trace and freeze the illicit funds. According to Tether’s official statement, the seized cryptocurrency is believed to be linked to “pig butchering” scams—a form of fraud where criminals build trust with victims over time, gradually encouraging them to invest larger amounts in fake crypto schemes.

This tactic has gained traction in recent years, particularly targeting individuals through social media or dating platforms. Once victims are “fattened up,” scammers convince them to send more money until the funds are siphoned off entirely. 

The FBI’s Internet Crime Complaint Center reported that crypto investment fraud accounted for more than $5.8 billion in losses in 2024 alone, with total losses from digital asset-related scams surpassing $9.3 billion.

Wider Clampdown Across the Country

The DOJ announcement coincided with separate action by New York officials, who reported the seizure of $140,000 and the freezing of an additional $300,000 connected to a similar social media-based crypto scam. That scheme reportedly impacted over 300 victims and caused losses exceeding $1 million.

When asked whether this enforcement strategy would be extended to probe political figures such as President Donald Trump for potential crypto-related misconduct, Pirro declined to comment. 

She instead pointed to the recent passage of the GENIUS Act in the Senate—a bill aimed at regulating stablecoins—and reiterated the DOJ’s priority: protecting everyday Americans from being scammed out of their life savings.