U.S. Department of Justice Seizes Over $580 Million in Crypto Linked to Chinese Transnational Crime Rings
Washington, D.C., Feb. 28 2026 — The Justice Department announced that more than $578 million worth of digital assets have been frozen, seized and forfeited in a crackdown on cryptocurrency‑related fraud targeting U.S. residents. The operation was carried out by the District of Columbia’s “Scam Center Strike Force,” a task‑force created in November by U.S. Attorney Jeanine Pirro.
What happened
- Scope of the seizure – Over a three‑month period, investigators identified and immobilized a portfolio of cryptocurrencies that investigators say were stolen by organized criminal groups based in China. The assets, spread across several blockchain addresses, were taken from fraud schemes that used websites and social‑media platforms to lure American investors.
- Legal process – The Strike Force moved quickly to obtain court orders that allowed the assets to be frozen and subsequently transferred to the DOJ’s forfeiture office. Pirro indicated that the department will seek to return the funds to victims wherever possible, rather than diverting them to other government programs.
- No addition to the Strategic Bitcoin Reserve – Despite the existence of a presidentially mandated “Strategic Bitcoin Reserve,” the seized crypto will not be earmarked for that stockpile. Instead, the focus is on victim restitution.
Background
The Scam Center Strike Force was assembled under Pirro’s direction to confront a surge in “Southeast Asian‑origin” crypto scams that have increasingly exploited U.S. investors. According to blockchain analytics firm Chainalysis, impersonation‑based frauds—commonly known as “pig‑butchering” schemes—rose by roughly 1,400 % year‑over‑year in 2025, with the average loss per victim increasing by about 600 %.
The crackdown follows a series of high‑profile prosecutions, including a recent 20‑year federal sentence for a scheme that defrauded U.S. victims of more than $73 million.
Wider picture of U.S. crypto seizures
Data compiled by BitcoinTreasuries.net suggests that U.S. authorities now hold an estimated 328,000 BTC—valued at well over $10 billion—acquired through various forfeiture actions. While the exact size of the Strategic Bitcoin Reserve has not been disclosed by the White House, the current seizure adds a significant, though comparatively modest, amount to the overall pool of government‑controlled digital assets.
Analysis
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Enforcement momentum – The rapid deployment of the Strike Force underscores a growing willingness by federal prosecutors to allocate resources to complex, cross‑border cyber‑crime investigations. By targeting the financial proceeds rather than merely the operators, the DOJ aims to disrupt the economic incentives that sustain these fraud networks.
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Victim restitution vs. government stockpiling – Pirro’s statements indicate that the primary goal is victim compensation. This stance contrasts with earlier discussions about building a national crypto reserve, suggesting a policy pivot that places restitution above strategic asset accumulation.
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Deterrence signal to transnational actors – The public disclosure of a six‑figure seizure tied to Chinese criminal groups sends a clear message that U.S. law‑enforcement agencies are capable of tracing and seizing illicit crypto assets, even when the perpetrators are located abroad.
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Operational challenges – While the seizure represents a tangible win, the process of converting frozen crypto into cash, tracing the full chain of ownership, and ultimately returning funds to victims remains intricate and time‑consuming. Legal disputes over ownership and jurisdiction could slow restitution efforts.
- Impact on the broader illicit‑crypto ecosystem – A high‑profile seizure such as this may prompt fraud operators to adopt more sophisticated laundering techniques, including the use of privacy‑enhancing mixers or off‑ramps in jurisdictions with lax regulatory oversight.
Key takeaways
- $578 million+ in crypto assets seized from schemes run by Chinese transnational crime groups targeting U.S. investors.
- The operation was executed by the DC Scam Center Strike Force, launched by U.S. Attorney Jeanine Pirro in November 2025.
- The DOJ intends to forfeit and return the assets to victims, not to augment the Strategic Bitcoin Reserve.
- The seizure occurs amid a record‑high wave of impersonation scams, which surged 1,400 % in 2025.
- U.S. authorities now control an estimated 328,000 BTC from various forfeitures, highlighting the expanding role of crypto assets in law‑enforcement investigations.
- The case underscores the growing capability of U.S. agencies to trace, freeze, and seize digital assets linked to cross‑border fraud, while also illustrating the procedural complexities involved in victim restitution.
As cryptocurrency continues to evolve as both an investment vehicle and a potential conduit for illicit finance, the DOJ’s latest action reinforces the message that criminal misuse of digital assets will be met with aggressive, coordinated enforcement.
Source: https://cointelegraph.com/news/us-justice-department-seized-crypto-china?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
