$225M Crypto Scam Seizure Raises Questions About Recovery for Victims

Nivie Kaul, the Los Angeles founder of Digital Defenders Group, has been fighting to recover her cryptocurrency for nearly three years. She obtained a payment order in Turkey worth $8.7M (£6.4M) against two alleged fraudsters and had a Turkish criminal court freeze the biggest wallet in the case, which holds roughly $87.5M (£65M) in USDT.

Kaul's claim was part of a larger operation known as Operation Big Tuna, which saw the US government seize $225.3M (£167M) in Tether tokens tied to a web of investment scams. The money is now locked inside a federal forfeiture case, and Kaul is fighting to establish her claim to it.

Of the 434 suspected victims identified, 60 were interviewed, with all but one reporting losses totaling 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.

However, not everyone accepts Kaul's reading. Erin West, a former prosecutor turned anti-scam campaigner, argues that foreign rulings hold no sway over US agencies, saying a Turkish order 'doesn't have any bearing on the US Secret Service.'