Justice Department seizes $580M from crypto scammers

The Justice Department’s Scam Center Task Force announced that it has seized almost $580 million from crypto scammers in Burma, Cambodia, and Laos in the past three months.

Details: The DOJ said:

• These frozen and seized funds have been stolen by transnational criminal organizations that use cryptocurrency investment scams and a variety of confidence scams to steal from Americans.

• Using social media networks or text messages to U.S.-based cell phones, the scammers target their victims, gain their trust, and convince them to invest in real cryptocurrency, only to then trick their victims to transfer those funds into fake cryptocurrency investment websites and applications.

• Workers in the scam compounds often are victims of human trafficking, held against their will, abused and guarded by armed groups as they are instructed to target Americans.

Recent Alerts: The Federal Trade Commission and Commodity Futures Trading Commission warned consumers about romance scams before Valentine’s Day, and a Wired article says stablecoins are the preferred payment method for scammers.

ICBA View:

• ICBA last summer expressed support for a Financial Crimes Enforcement Network action on crypto scams but said more needs to be done to curtail their rapid growth.

• An Independent Banker magazine article offers tips on educating tellers and customers about the signs of romance scams.

• In a statement for a 2024 congressional hearing on crypto-based romance confidence scams, ICBA said policymakers should prioritize national security, counter illicit finance uses of cryptocurrency, and improve information sharing with community banks.

Resources: ICBA blog posts spotlight the growth of these scams and the need for a policy response.