US government to return $7 million in seized funds to victims of fake crypto investment sites

On March 24th, according to Cointelegraph, the U.S. government is seeking to return $7 million to victims of social engineering fraud, who were deceived into sending money to a fake cryptocurrency investment platform. According to a statement from the U.S. Attorney's Office for the Eastern District of Virginia, the scam involved fraudsters first contacting victims and gaining their trust, then guiding them to websites disguised as legitimate cryptocurrency investment platforms. Once the victims made deposits, the funds were transferred through more than 75 bank accounts, held in the names of shell companies, and then transferred overseas in a "deceptive manner," appearing to be domestic transfers even though the funds were actually moved to banks outside the United States.

"When victims try to withdraw funds, criminals force them to make additional payments by claiming the victims 'need to pay taxes on assumed profits'," the U.S. Secret Service seized a portion of the funds from a foreign bank in 2023 and initiated civil forfeiture proceedings by filing a lawsuit in a U.S. district court. However, the bank also made a claim on these funds, and the U.S. government ultimately reached an agreement to return $7 million from the seized funds to the victims.