Crypto Scam Victims Won $225M Seizure, Then the US Government Took the Money

Nivie Kaul, the Los Angeles founder of Digital Defenders Group, an advocacy organisation for crypto-fraud victims, spent nearly three years chasing the people she says drained her own cryptocurrency. She paid for forensic analysis, obtained orders in Turkish courts, and pressed US investigators to freeze the funds before they moved again.

In June 2025, the US government announced it had seized $225.3M (about £167M) in Tether tokens tied to a web of investment scams, part of the same pool Kaul had worked to preserve. That money is now locked inside a federal forfeiture case, and Kaul is fighting to establish her claim to it.

She is one of several hundred people who have staked claims on the seized pool, the largest cryptocurrency seizure in US Secret Service history. Almost none have been repaid.

Inside Operation Big Tuna's $225M Seizure

The Justice Department filed its civil forfeiture complaint in the US District Court for the District of Columbia, going after more than $225.3M (£167M) spread across seven groups of USDT wallets. The complaint alleges the stablecoins were laundered through a network that ran hundreds of thousands of transactions, much of it through accounts on the OKX exchange. Working with Tether and OKX, investigators traced the money using blockchain analytics and a last-in, first-out method that follows each victim deposit as it is blended with other funds.

The scams behind the pool, often run from compounds in Southeast Asia, rely on months of grooming before a fake platform swallows ever larger deposits.

Roughly 434 suspected victims were identified. Of the 60 interviewed, all but one reported losing money, for combined losses of about $19M (£14M). Matthew Galeotti, head of the department's criminal division, said prosecutors would 'relentlessly pursue recovery of victim funds.' US Attorney Jeanine Pirro said her office aimed to make victims whole. The case was known as Operation Big Tuna, and victims are told to quote a Big Tuna code when reporting losses to the FBI.

Kaul's Years-Long Fight to Recover the Funds

Nivie Kaul's account, laid out in a sworn claim filed on 17 March 2026, begins well before the American operation. In February 2023, she obtained a payment order in Turkey worth $8.7M (£6.4M), around 164M Turkish lira, against two alleged fraudsters. That August, a Turkish criminal court ordered Tether to freeze the biggest wallet in the case, which holds roughly $87.5M (£65M) in USDT. The freeze landed months before US agents opened their own inquiry.

She had tried the US route first. In January 2023, she alerted a California prosecutor that the money had to be frozen before it slipped away, and was referred to a Secret Service analyst. By late February, she says, she was told recovery was impossible under the method the agents were using. When the forfeiture finally started in June 2025, Kaul says the government never told her, even with her Turkish claim still attached to the assets. Her filing calls her the 'original innocent owner' and credits her work with about 70 arrests.

Not everyone accepts her reading. Erin West, a former prosecutor turned anti-scam campaigner named in Kaul's filing, argues that foreign rulings hold no sway over US agencies, saying a Turkish order 'doesn't have any bearing on the US Secret Service.' For most victims of these gangs, she has cautioned, the money is simply gone.

The seized tokens remain contested. Infiniweb, a gaming company registered in the British Virgin Islands, has asserted its own ownership interest in the tokens, a claim still unresolved that could reduce whatever victims eventually receive.

A Justice Department lawyer signalled in August 2026 that the sides were moving towards a settlement, one that might install an administrator and give priority to victims who can link their losses to specific wallets.

An approved claim may still fall short of a victim's loss. Compensation is usually pegged to the crypto's value when it was stolen rather than its current worth, so a market swing can change what a claimant recovers.

So far, only a token amount, put at around $2M (£1.5M), has gone back to victims.

The FBI logged $7.2B (£5.3B) in reported cryptocurrency investment fraud across the US last year. Investigators also warn of a second trap: recovery scammers who demand upfront fees, promising to unlock money that the government does not charge victims to claim.