The U.S. Department of Justice has officially launched an investigation into a large-scale investment fraud case involving cryptocurrencies. On July 23rd (local time), the federal prosecutor's office in the Western District of Washington filed a civil lawsuit to seize approximately $7.1 million in cryptocurrency assets related to financial fraud in oil and gas storage facility investments. This action was part of an investigation into a case where individuals were lured by manipulated high-yield investment products over approximately two years since 2022, swindling funds amounting to hundreds of billions of won.
The investigation was led by Homeland Security Investigations (HSI) and utilized a so-called 'escrow trick' double fraud method. The fraud organization induced trust by claiming that investment funds would be used to purchase actual oil storage tanks, and once funds were deposited, they abruptly cut off communication without any explanation. Victims' funds were transferred to over 81 accounts through various banks and cryptocurrency wallets outside the U.S., with a significant amount converted to cryptocurrencies such as Bitcoin (BTC), Tether (USDT), USD Coin (USDC), and Ethereum (ETH), and then remitted to major exchange accounts like Binance.
The total confirmed damage amount is $97 million (approximately 134.93 billion won), and the seized assets represent only a part of the total loss. Authorities have also detected money laundering activities through exchanges in Russia and Nigeria. Some markets in these countries have been identified as money laundering hubs for terrorist organizations or groups violating international sanctions, and it was investigated that some victim funds were leaked overseas through these routes.
Jeffrey K. Auyoung, a Washington state resident identified as one of the main conspirators, was indicted last August, and at that time, $2.3 million was already seized from his bank account. With the additional $7.1 million in cryptocurrencies to be seized, the government expects to partially compensate victims.
The U.S. Federal Prosecutor's Office explained, "We performed urgent tracking and seizure operations to maximize the possibility of damage recovery, and these assets are expected to be returned to victims upon court approval." Currently, dozens of damage cases have been reported, amounting to $17.9 million (approximately 24.91 billion won), with expectations of further expansion.
This case is evaluated as another example highlighting the risks of cryptocurrency fund circulation being exploited for concealing fraud methods and international money laundering, and emphasizing the importance of global tracking capabilities and investigative cooperation of U.S. authorities.
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