Inside the Secret Service's Battle Against Crypto Sextortion and $400 Million in Bitcoin Crime

The U.S. Secret Service Emerges as a Crypto Crime Powerhouse

With blockchain forensics replacing briefcases of cash, the U.S. Secret Service has evolved into one of the world’s most advanced crypto crime-fighting agencies. Armed with cutting-edge blockchain analysis tools, the agency is reshaping the fight against digital financial crimes such as crypto scams, fraud, and sextortion.

Massive Crypto Seizures and Global Investigations

Bloomberg reports that the Secret Service’s Global Investigative Operations Center has seized nearly $400 million in Bitcoin and other digital assets, all stored securely in a single cold wallet. These major hauls stem from targeted investigations focused on cryptocurrency crimes, digital extortion schemes, and complex online fraud operations.

New Strategies in Tracing Crypto Crime

A recent high-profile case demonstrates the Secret Service’s expanding reach. After a U.S. teenager fell victim to a sextortion scam and paid $600 in Bitcoin, Secret Service agents traced the transaction through a network of money mules to a Nigerian national implicated in thousands of illegal crypto transfers. Leveraging specialized blockchain investigation software and digital subpoenas, the agency tracked down the suspect, revealing over $4.1 million in suspicious transactions across nearly 6,000 crypto wallets.

Redefining Law Enforcement in the Blockchain Era

Under the leadership of investigative analyst Jamie Lam, the Secret Service now relies on wallet link analysis, domain and blockchain tracing, and data-driven forensics—transforming how law enforcement tackles cryptocurrency-based crimes. Collaboration with cryptocurrency companies, including major exchanges like Coinbase and stablecoin issuer Tether, has led to successful wallet freezes and asset recoveries. One such partnership recently helped recover $225 million in USDT tied to romance-investment fraud schemes.

Romance Scams and the Scale of Crypto Fraud

The scale of crypto crime is staggering. According to recent figures, Americans reported $9.3 billion lost to cryptocurrency scams in 2024. Romance scams alone account for the majority of these losses, disproportionately affecting older adults with nearly $2.8 billion lost on fraudulent investment platforms.

Global Training and International Cooperation

Kali Smith, head of the Secret Service’s cryptocurrency strategy, emphasizes the importance of international training. The agency has conducted workshops in over 60 countries, empowering local police to investigate and prevent digital asset crime. As Smith notes, "Sometimes after just a week-long training, they realize the scale of crypto crime happening in their own countries."

Setting the Standard for Crypto Financial Crime Investigation

In notable recent operations, the Secret Service worked with UK authorities to arrest a Nigerian national accused of orchestrating sextortion campaigns after tracking him via money trails and blockchain data. Evidence collection included screenshots, payment receipts, and decentralized ledger analysis, underlining that modern crypto sleuthing is redefining law enforcement worldwide.

As Patrick Freaney, head of the New York field office, says, “We’ve been following the money for 160 years. This advanced cryptocurrency training and global collaboration are essential to our ongoing mission.”

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