Bitcoin’s treble allows US gov to pay back crypto fraud victims

The US Department of Justice is preparing to compensate victims of a wire fraud scheme, helped by the tripling in value of Bitcoin since the cryptocurrency was seized.

The scheme, which targeted real estate transactions, caused millions of dollars in losses to businesses and individuals. In December 2023, fraudsters infiltrated systems used for real estate transactions and sent fraudulent wire transfer instructions to divert funds intended for mortgage and other payments.

One company reported a loss of more than $1 million. Investigators later uncovered at least ten more victims with individual losses totaling between $75,000 and $425,000, according to the Justice Department.

The stolen funds were laundered through multiple bank accounts and eventually consolidated into a cryptocurrency wallet controlled by fraudsters in Nigeria.

Law enforcement officials seized 32.68 Bitcoin (BTC), valued at $900,000 at the time, from the wallet. To facilitate victim compensation, the U.S. Attorney’s Office filed a civil forfeiture lawsuit to claim the seized Bitcoin.

Bitcoin’s price increase will make repayment easier

Since the seizure, the price of Bitcoin has more than tripled and the value of the seized assets has increased significantly. This increase in value now allows the Department of Justice to pay compensation to each of the ten victims who filed the claim, potentially making them whole.

Civil forfeiture is a legal process by which authorities seize assets linked to criminal activity before suspects are arrested. U.S. Attorney Tessa M. Gorman emphasized the importance of helping victims recover from their losses.

“I appreciate the swift work of law enforcement and the Asset Forfeiture Unit who took action to seize this Bitcoin and worked diligently to make these victims whole,” Gorman said. “Forfeiture is an important tool we can use to help victims even before bad actors are arrested.”