The U.S. Department of Justice is cracking down on yet another cryptocurrency fraud ploy.

The losses amount to tens of millions, and it’s expected that more will be identified.

An Elaborate Scheme

The U.S. Attorney’s Office in the Western District of Washington filed a civil action on Tuesday, demanding the forfeiture of cryptocurrency assets valued at roughly $7.1 million. The funds were seized during an investigation into a scheme involving fraudulent investment in oil and gas, which Acting U.S. Attorney Teal Luthy Miller announced.

The assets are only a fraction of the $97 million obtained by coconspirators between June 2022 and July 2024, which Homeland Security Investigations seized in December last year.

“The co-schemers in this fraud moved their ill-gotten gain through various cryptocurrency accounts to try to launder the money stolen from victims,” said Attorney Miller.

“Federal investigators and prosecutors in our office moved as quickly as possible to trace and seize the cryptocurrency so that some of the losses can be returned to victims.”

According to the filing and other case records, the plot was presented as escrow accounts for purchasing oil tank storage in either Rotterdam, the Netherlands, or Houston, which spanned from at least August 2022 through August 2024.

The victims were convinced to send money to these accounts, where the conspirators indicated that investors could make significant profits by renting out the oil tank storage to others. At least seven separate entities have been marked where funds were sent.

However, the good news ended there, as once the funds were sent, no further information on the investment was provided, and the co-schemers just stopped replying.

How The Funds Were Moved

A resident from Newcastle, Washington, Geoffrey K. Auyeung, 47, was indicted as a coconspirator in the U.S in August 2024, being charged with receiving the majority of the funds generated by the deceptive plan.

The money was quickly shuffled to one or more of at least 81 accounts at various institutions, either offshore or not, or to one of the at least 19 different crypto accounts.

The assets were then funneled into various cryptocurrencies, including Bitcoin, USDT, USDC, and Ethereum, the majority of which was further transferred to accounts at the Binance exchange.

The forfeiture filing further states that the crypto accounts, which were seized, were linked to individuals in Russia and Nigeria, where some of the victims’ funds, used to purchase digital assets, were also sent to exchanges in those countries.

At least one of the money markets in Russia or Nigeria is alleged to have facilitated money laundering for transnational criminal organizations, including terrorist organizations and other parties that have been known to violate international trade sanctions.

At the time of Auyeung’s arrest, $2.3 million was seized from his bank accounts, which is in addition to the $7.1 million in crypto the government is seeking to forfeit.

If the court approves the forfeiture, the funds will be distributed accordingly to the victims. Investigators, so far, have identified dozens of such cases, with the total amount of exploits reaching approximately $17.9 million, which is expected to grow as more casualties are identified.

Donald Trump Jr. has refuted any involvement by the Trump family in the recently announced ‘Trump Wallet.’

However, he revealed that an official crypto wallet is being developed through World Liberty Financial.

Trump Sons Refutes ‘Trump Wallet’ News

On June 3, NFT marketplace Magic Eden announced a partnership with the team behind President Donald Trump’s meme coin to launch an official Trump-branded crypto wallet.

The platform’s promotion includes a screenshot of trumpwallet.com, with the tagline: “The First and Only Crypto Wallet for True Trump Fans.” The product also claims to offer users a chance to join a waitlist and participate in a $1 million TRUMP giveaway.

Magic Eden co-founder Jack Lu also posted about the collaboration on his X profile, stating that it reflects his firm’s commitment to bringing a broader audience into crypto. The official X account for the Trump meme coin had also confirmed the initiative.

Following the news, Trump’s sons took to social media claiming they were unaware of its existence. Don Jr. took to social media, stating:

“The Trump Organization has zero involvement with this wallet product. Eric Trump and I know nothing about it.”

Eric issued a separate statement supporting his brother, denying any connection between the product and the First Family. However, his older brother clarified that the Trump Organization is working on a separate wallet project in partnership with World Liberty Financial, which is expected to launch soon.

Will the Trump Family Take Legal Action?

A New York Times report also highlighted that Eric has since escalated the dispute. The president’s son has allegedly said that his family would pursue legal action against the creators of the Official Trump Wallet.

“There is no deal for this product,” he emphasized. “There is no agreement for this product. It has not been approved.”

In a follow-up post on X, responding to Magic Eden’s announcement, he also warned against using the Trump name on any products that have not received a go-ahead.

Over the last four months, the first family and its partners have launched several crypto initiatives. These include World Liberty Financial, the TRUMP and MELANIA meme coins, the USD1 stablecoin, and plans to release a utility token through Trump Media.

Nonetheless, the crypto community has raised concerns about their growing involvement in the crypto industry. Former White House Communications Director Anthony Scaramucci previously said these efforts could create “pathways for some level of corruption.”

The projects are also facing scrutiny in the U.S. Senate. Lawmakers recently opened an inquiry into them, citing concerns about potentially illegal fundraising, foreign influence, and the abuse of political power.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Funnull Technology Inc., a technology firm headquartered in the Philippines, and its administrator, Liu Lizhi.

The company has been implicated in running a “pig butchering” scam.

$200M Scam Uncovered

According to the official press release, Funnull has stolen over $200 million from American investors. OFAC has also placed two of Funnull’s cryptocurrency addresses on its Specially Designated Nationals (SDN) List to restrict their access to financial systems.

In response, the FBI’s Internet Crime Complaint Center (IC3) issued a public advisory, outlining key technical indicators, such as infrastructure components and IP addresses tied to Funnull’s scam operations.

Deputy Secretary of the Treasury Michael Faulkender, in an official statement, said

“Today’s action underscores our focus on disrupting the criminal enterprises, like Funnull, that enable these cyber scams and deprive Americans of their hard-earned savings. The United States is strongly committed to ensuring the continued growth of a legitimate, safe, and secure digital asset ecosystem, including the use of virtual currencies and similar technologies.”

Connection to Triad Nexus and Huione Pay

According to the findings by blockchain intelligence Chainalysis, Funnull Technology Inc. enabled cybercriminals by purchasing IP addresses in bulk from major cloud service providers and selling them to operators of fraudulent investment platforms. This infrastructure allowed scammers to host malicious websites that mimicked legitimate investment platforms, thereby deceiving victims into investing in non-existent opportunities.

Funnull was a central player in a network dubbed by security researchers as “Triad Nexus,” which includes more than 200,000 unique hostnames, many of which are associated with investment scams, fake trading apps, and suspect gambling networks. OFAC identified two crypto addresses linked to Funnull Technology Inc., used for receiving cybercriminal payments.

These addresses are tied to scam-related infrastructure and show connections to Huione Pay, which was recently flagged by FinCEN as a major money laundering concern.

Further investigation by blockchain security firm Elliptic revealed that the two addresses in question received more than $4 million in total.

The United States government is close to enacting its first crypto legislation, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. However, Democratic lawmakers are pushing to include protections against corruption from public officials, especially the family of President Donald Trump.

According to a report from Axios, a group of senators insists the bill needs to be amended to prevent Trump and his inner circle members from profiting from stablecoins and selling influence to the highest bidder.

Senators Push to Amend GENIUS Act

The GENIUS Act will establish the first regulatory framework for stablecoins in the U.S. Senator Bill Hagerty introduced the bill in February, with co-sponsorship from Senators Kirsten Gillibrand and Cynthia Lummis.

If enacted, the bill will establish a federal licensing and supervisory framework for stablecoins, requiring their issuers to undergo regular security audits. The legislation will limit stablecoin issuance to licensed entities and prohibit trading assets that are not fully backed.

Before the bill passed in the Senate earlier this week, Democrats had raised concerns about potential conflicts with Trump’s crypto investments. Although they had previously withdrawn their support, most of them, except for Senate Minority Leader Chuck Schumer, eventually voted yes.

Concerns Over Trump’s Crypto Ventures

With the GENIUS Act a few steps away from becoming law, Democrats once again insist that amendments be made to include protections against corruption. Senators Jeff Merkley, Elizabeth Warren, and Schumer are pushing to file the amendment before the legislation passes the Senate.

Senators Gary Peters, Jack Reed, Chris Murphy, and Michael Bennet are co-sponsoring the amendment. Although most of these lawmakers have voted in favor of the bill, sources familiar with the matter revealed that they may withdraw their support if the legislation lacks protections against corruption.

As the push for amendment continues, Senator Mark Warner, a Democrat, insists the bill should be passed regardless of concerns about the Trump family. He said the possibility of corruption should not blind the U.S. government to the broader reality that blockchain technology is here to stay.

These concerns come as the Trump family’s crypto business, World Liberty Financial (WLFI), launches a new stablecoin, USD1. The asset has already scored a deal to become the settlement currency for Abu Dhabi-based MGX’s $2 billion investment in crypto exchange Binance.

Meanwhile, top Democrat lawmakers have launched an investigation into Trump’s crypto venture over concerns of illegal fundraising, abuse of political power, and foreign influence.