U.S. Secret Service Launches Global Operation to Tackle Crypto Scams

The United States Secret Service is intensifying its fight against digital financial crimes, with its Global Investigative Operations Center (GIOC) at the forefront of tracking cryptocurrency related fraud. Led by lawyer Kali Smith, who directs the agency’s cryptocurrency strategy, the GIOC team relies on software, subpoenas, and spreadsheets to uncover illicit activities in the rapidly evolving world of digital assets.

Recently, the team traveled to Bermuda, a British overseas territory that has positioned itself as a hub for digital asset firms with robust crypto regulations. This openness to innovation, however, has also exposed Bermuda to new risks, prompting international collaboration to combat financial crime.

Global Training and Real-World Investigations

Last month, Smith and her team conducted a training session in Bermuda, addressing the growing threat of crypto related scams. Speaking in a conference room overlooking Hamilton Harbor, Smith emphasized that many scam victims are lured by the perceived safety of cryptocurrencies like Bitcoin, only to fall prey to fraudsters. Bermuda’s governor, Andrew Murdoch, highlighted the dual nature of financial technologies, noting that while they drive economic growth, they also require strong investigative measures to prevent abuse. The training aimed to equip local authorities with the tools to tackle these challenges, reflecting the Secret Service’s commitment to global cooperation.

The GIOC’s work is grounded in real-world cases that illustrate the complexity of digital crime. In one instance, analysts reconstructed an extortion scheme involving an Idaho teenager who was coerced into sending $300 to a stranger threatening to leak a compromising photo. Using screenshots, receipts, and blockchain data, the team traced the payments through a network that included another American teenager acting as a money mule. The funds ultimately led to an account linked to a Nigerian passport, which had processed $4.1 million across nearly 6,000 transactions. British authorities arrested the suspected extortionist in Guildford, England, where he awaits extradition.

Crypto related crime has become a significant driver of financial losses in the United States. According to FBI data, Americans reported $9.3 billion in crypto scams in 2024, accounting for more than half of the $16.6 billion in total online fraud losses. Older victims were particularly hard hit, losing nearly $2.8 billion to fraudulent investment schemes. Some cases have escalated beyond financial loss, with a New York incident involving two investors indicted for kidnapping and torturing a friend to access his digital wallet.

To recover stolen funds, the Secret Service collaborates with industry partners like Coinbase and Tether, which provide critical support through trace analysis and wallet freezes. A notable recent success involved the recovery of $225 million in USDT tied to romance investment scams. Patrick Freaney, head of the agency’s New York field office, which oversees Bermuda, underscored the agency’s long history of following illicit funds. He described the Bermuda training as a continuation of the Secret Service’s 160 year mission to protect the financial system.