How the Secret Service Amassed a $400 Million Crypto War Chest—By Hunting Scammers

The US Secret Service just pulled off the ultimate crypto flex—turning the tables on fraudsters to seize a nine-figure fortune.

From darknet takedowns to DeFi honeypots, here’s how federal agents became unlikely whales.

The Art of the Crypto Bust

Forget Treasury bills—the real action’s in blockchain forensics. When scammers tried cashing out, the feds were waiting with wallet addresses instead of handcuffs.

$400 Million Reasons to HODL

That’s not taxpayer money—it’s reclaimed digital loot. Though we’re guessing the IRS will still want its cut.

Pro tip for criminals: Next time, maybe don’t keep your illicit gains in an immutable public ledger.

TLDR

• US Secret Service has seized nearly $400 million in cryptocurrency over the past decade, creating one of the world’s largest crypto cold wallets
• The agency’s Global Investigative Operations Center uses blockchain analysis, domain records, and VPN tracking to identify fraudsters
• Americans lost $9.3 billion to crypto scams in 2024, representing more than half of all internet crime losses that year
• Romance investment schemes are among the most common tactics, with scammers creating fake dating profiles to lure victims
• The Secret Service has trained officials in over 60 countries to identify and combat crypto-related financial crimes

The US Secret Service has quietly built one of the world’s largest cryptocurrency cold wallets. The agency has seized nearly $400 million in digital assets over the past decade through investigations into various crypto scams and fraud schemes.

The Secret Service’s Global Investigative Operations Center leads these efforts. The team uses blockchain analysis, domain records, and VPN tracking to identify criminals operating crypto fraud schemes worldwide.

Jamie Lam, an investigative analyst with the Secret Service, explained their methods to law enforcement officials in Bermuda last month. The agency tracks funds through open-source tools and blockchain analysis, often requiring patience to build cases against sophisticated scammers.

Hype and confusion are fueling a rise in crypto-related crime.

🎥 Check out our latest PSA to learn the 🚩 red flags 🚩 and what to do if you're a victim.

🔗 https://t.co/wFPHgPI25H #crypto #digitalassets #secretserviceinvestigates pic.twitter.com/z3hmmrKPUu

— U.S. Secret Service (@SecretService) May 21, 2025

Most of the seized crypto sits in a single cold-storage wallet. The funds come from investigations into romance scams, fake investment platforms, and sextortion cases targeting victims across the United States and internationally.

Romance investment schemes represent one of the most common tactics. Scammers create fake dating profiles using attractive photos to build relationships with potential victims. They then convince targets to invest in fake cryptocurrency platforms that promise high returns.

“They’ll send you a photo of a really good-looking guy or girl. But it’s probably some old guy in Russia,” Lam said during the briefing.

The scammers often allow victims to see initial profits before the platforms disappear with their deposits. This creates false confidence and encourages larger investments from unsuspecting targets.

Blockchain Analysis Reveals Criminal Networks

The Secret Service team uses various investigative techniques to trace cryptocurrency transactions. Blockchain analysis helps investigators follow the digital trail left by criminals moving funds between wallets and exchanges.

Domain records provide another avenue for tracking scammers. The team examines website registration information and hosting details to identify connections between different fraudulent platforms.

VPN failures have also helped investigators identify criminals. In one case, a brief VPN disconnection exposed an IP address that helped agents piece together a scam’s digital trail.

The agency has focused investigations on jurisdictions with weak oversight or programs selling residency to foreign nationals. These areas often serve as SAFE havens for criminals operating crypto fraud schemes.

Training International Partners

Kali Smith directs the Secret Service’s cryptocurrency strategy and leads a team that has trained officials in over 60 countries. The training helps international partners identify and combat crypto-related financial crimes in their jurisdictions.

“Sometimes after just a week-long training, they can be like, ‘Wow, we didn’t even realize that this is occurring in our country,'” Smith said.

The agency’s work has uncovered various types of crypto crimes. These include romance-investment schemes, sextortion cases, and fake investment platforms targeting victims worldwide.

One investigation involved an Idaho teenager who sent a nude photo to an online stranger. The scammer extorted $300 twice before the teen contacted police about the situation.

Analysts traced the payments through another teenager acting as a money mule. This led to an account tied to nearly $4.1 million in transactions under a Nigerian passport.

British police arrested the suspected extortionist when he arrived in Guildford, England. He remains in custody pending extradition to the United States.

The Secret Service has also seized $225 million in USDT linked to romance scams in one of their largest single recoveries. This operation involved coordination with the FBI and the US Attorney’s Office.

Americans reported $9.3 billion stolen in crypto fraud in 2024, representing more than half of the $16.6 billion in total internet crime losses that year according to FBI data.