David Edwards
According to a Bloomberg story published on Saturday that cited people familiar with the situation, the U.S. Secret Service has covertly amassed around $400 million in confiscated digital assets over the last ten years, creating one of the biggest cryptocurrency cold wallets in the world.
This enormous cache, which is mostly contained in a single cold-storage wallet, is the result of a growing effort to disrupt international cryptocurrency fraud schemes. To track down illegal funds, the agency’s Global Investigative Operations Center (GIOC) has used a complex combination of domain tracing, blockchain analytics, and operational patience.
Jamie Lam, a Secret Service investigative analyst, explained how scammers trick victims by using phony investing platforms at a recent law enforcement event in Bermuda. These platforms frequently display fake earnings before vanishing with the money that was deposited. “They’ll send you a photo of a really good-looking guy or girl,” Lam noted. “But it’s probably an elderly Russian man.”
Cybercrime Mapping: Digital Forensics
In order to identify fraudsters, Lam’s team monitors blockchain transactions, domain ownership information, and even takes advantage of VPN malfunctions. In one instance, a suspect was connected to a larger wallet network by means of an exposed IP address. In a different instance, a crypto trail was linked to a juvenile coercion plot.
The focal point of the agency’s approach is Kali Smith, who oversees an international training program designed to improve local enforcement capacities in areas with inadequate regulatory monitoring or citizenship-for-sale programs. “Even a week of training can show some countries how deeply crypto fraud has penetrated their financial ecosystems,” Smith said.
Investigations by the Secret Service have shown a wide range of financial crimes committed online, from extortion through digital blackmail to romantic investment fraud. An Idaho adolescent who sent an obscene image online was the victim of extortion in one well-known case. Through the use of a forced money mule, analysts were able to link the resulting cryptocurrency transfers to a wallet associated with $4.1 million in transactions using a Nigerian passport. The suspect was captured by the UK’s Metropolitan Police in Guildford and is currently awaiting extradition.
An Increase in Cybercrime
Fraud involving cryptocurrency has emerged as the primary cause of cyber crime losses in the United States. According to FBI data, Americans reported $9.3 billion in cryptocurrency scams in 2024, which was more than half of the $16.6 billion in overall losses from cybercrime that year.
Over $2.47 billion has been lost to hackers and scams so far in 2025, which is almost 3% more than at the same time in 2024.
Collaboration from the private sector is frequently essential to a successful asset recovery. By suspending wallets and looking into questionable transactions, Coinbase and Tether have both openly assisted investigations. $225 million in Tether (USDT) linked to romance investment frauds was one of the biggest recoveries
