US escalates war on Crypto Scams with $700M seizure

The US government took a major action to choke off one of the biggest pipelines of crypto-linked fraud money. The DOJ is freezing more than $701 million in digital assets tied to investment scams targeting Americans.

The action was led by the US Department of Justice (DOJ) under its Scam Center Strike Force. This marks one of the largest coordinated seizures targeting crypto fraud networks operating overseas. The global crypto market has been witnessing a wave of minor recovery rallies. The cumulative market cap hovers around $2.6 trillion.

DOJ targets global scam pipeline

According to the release, Authorities said that the funds were “restrained” through a mix of legal processes and voluntary cooperation from crypto exchanges. This was part of a major campaign launched to dismantle scam centers that have bilked victims of billions.

The operation went ahead with just freezing funds only. Officials confirmed criminal charges against two Chinese nationals. They are accused of running a crypto fraud compound in Myanmar and attempting to expand operations into Cambodia. However, the crackdown also included the seizure of a Telegram channel that was used to recruit trafficked workers into scam centers,

It added that the victims were allegedly forced to impersonate banks and law enforcement agencies to defraud Americans. As reported, the authorities had shut down 503 fake investment websites tied to the scheme.

US Attorney Jeanine Ferris Pirro has described the effort as part of a government-wide push to combat cyber-enabled fraud. She stated that they have charged the Chinese bosses who ran a scam compound in Burma. She highlighted that the Office continues to work to identify funds stolen from victims. This Administration is lock-step in combatting these scams, and we are not done, Pirro added.

The $700 million figure represents funds linked to crypto scams and money laundering. Authorities are now seeking to forfeit the property and potentially return it to the victims. The effort is coordinated with multiple agencies. This includes the Federal Bureau of Investigation (FBI) and the US Secret Service. However, financial regulators and international partners are also a part of it.

Assistant Attorney General A. Tysen Duva said the goal is to ensure that overseas fraud networks can no longer operate beyond the reach of US enforcement. “Fraudsters who target Americans from overseas may believe they cannot be reached,” Duva said. “We are working to ensure they cannot operate with impunity.”

Sanctions imposed in crypto scam fight

The Treasury Department had announced sanctions against Cambodian operators linked to scam centers. On the other hand, the State Department announced rewards for information leading to the recovery of funds linked to the so-called Tai Chang scam network in Myanmar.

Treasury Secretary Scott Bessent stated that the admin would continue targeting fraud networks “no matter where they operate or how well-connected they are.”

The scale of the seizure highlights both the reach of these criminal networks and the increasing role of crypto in global fraud schemes. Meanwhile, it also highlights how blockchain transparency is enabling authorities to trace and freeze illicit funds at scale. 

The seized assets could also be added to major government reserves. Back in 2025, President Donald Trump signed an executive order that established a Strategic Bitcoin Reserve and Digital Asset Stockpile. That was partly funded through confiscated crypto.

For now, officials say the operation is ongoing, and the $700 million figure may not be the final tally.

The year 2026 began with a massive crypto scam and fraud. January 12 saw TrueBit Exploit, where an integer overflow vulnerability allowed attackers to extract $26.2 million. Then, Feb 4 witnessed Step Finance Breach. An executive email compromise led to the theft of $27.3 million. 

April saw the KelpDAO Bridge Exploit. Attackers linked to the Lazarus Group stole approx $292 million. They compromised off-chain infrastructure to forge token “burn” approvals. However, the Drift Protocol Hack happened. The massive exploit resulted in a $285 million loss after an attacker used a compromised admin key to manipulate oracles.