US Secret Service Becomes Major Crypto Custodian After Seizing Nearly $400 Million in Cryptocurrency
By Rachel Lourdesamy | July 7, 2025
In a significant development in the fight against digital crime, the United States Secret Service has emerged as one of the world’s largest custodians of cryptocurrency after successfully seizing close to $400 million (AUD 615 million) in crypto assets over the past decade. This milestone highlights the agency’s expanding role in tracking, recovering, and securing ill-gotten digital funds, with the bulk of these assets now stored in a single, massive cold-storage wallet — one of the largest of its kind globally.
Major Recovery from Romance-Investment Scams
Among the noteworthy recoveries is a sizeable cache of $225 million (AUD 346 million) worth of Tether (USDT), which was linked to a sprawling series of romance and investment scams. Often, these schemes begin with social manipulation, where victims are duped through fake online personas and fraudulent crypto investment platforms. The platforms may initially show small returns to lure victims before suddenly disappearing, leaving investors scammed out of their funds.
Jamie Lam, an investigative analyst at the Secret Service’s Global Investigative Operations Center (GIOC), described how scammers use fake dating profiles to lure victims online. "They’ll send you a photo of a really good-looking guy or girl. But it’s probably some old guy in Russia," Lam remarked, elucidating the deceptive tactics used to ensnare unsuspecting individuals.
Cutting-Edge Investigative Work
The GIOC, the Secret Service’s dedicated cybercrime unit, spearheads these efforts by leveraging blockchain analytics, open-source intelligence, and patient investigative methods. Their work involves linking wallet activities with domain registration records and even uncovering exposed IP addresses when criminals mistakenly slip up while using VPN services.
One notable investigation led to uncovering a sextortion case involving a teenager in Idaho. Analysts traced a crypto wallet processing approximately $4.1 million (AUD 6.3 million), resulting in the arrest of a suspect in the United Kingdom who remains in custody.
Training Law Enforcement Globally
Recognizing the increasing sophistication of crypto-enabled crimes, the Secret Service has extended its expertise beyond US borders. Kali Smith, who leads the agency’s cryptocurrency strategy, has overseen training programs conducted in over 60 countries. These sessions equip local police forces and prosecutors with the skills to detect and investigate crypto fraud using blockchain tools.
“Sometimes after just a week-long training, they can be like, ‘Wow, we didn’t even realise that this is occurring in our country,’” Smith explained. The training is offered at no cost, especially targeting regions lacking robust financial oversight or vulnerable to citizenship-for-sale schemes.
Crypto Fraud: The Rising Threat
Crypto asset fraud has become the dominant form of internet crime-related financial loss in the US, with the FBI reporting a staggering $9.3 billion (AUD 14.29 billion) in crypto fraud losses in 2024 alone. The collaboration between the Secret Service and cryptocurrency firms like Coinbase and Tether has been pivotal in freezing illicit wallets and aiding investigations.
This alliance has helped transform the Secret Service into a key stakeholder in the global effort against crypto crime, balancing the challenges of managing large seized digital asset holdings while pursuing justice.
About the Author:
Rachel Lourdesamy is a Sydney-based freelance writer specializing in finance, business, and human interest stories. With a background in financial services and corporate communications across the Asia-Pacific, she covers emerging trends in cryptocurrency and blockchain technology.
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Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments carry risk, and readers should conduct their own due diligence.
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