Crypto fraud enforcement is being ramped up by the Justice Department as a surge in scams is observed, record losses are hit, and financial crime is aided by AI.
In its 2025 Year in Review released this past Thursday, January 22, 2026, three high-profile fraud cases in which cryptocurrency played a material role were highlighted by the U.S. Department of Justice, as heightened enforcement is noted while digital assets become embedded in traditional fraud schemes.
According to the DOJ’s Criminal Division Fraud Section report, an aggregate intended fraud loss exceeding $16 billion—more than double last year’s total—was attributed to 265 defendants charged during a record-breaking year.
The Fraud Section is composed of four specialized units—the Foreign Corrupt Practices Act Unit; the Market, Government, and Consumer Fraud Unit; the Health and Safety Unit; and the Health Care Fraud Unit—the latter of which manages medical fraud investigations where seizures of cryptocurrency have been documented.
The expanding role of cryptocurrency in large-scale fraud operations is emphasized by the report.
In a major enforcement action, Tyler Kontos, Joel “Max” Kupetz, and Jorge Kinds were charged in connection with a $1 billion amniotic wound allograft fraud scheme that allegedly resulted in more than $600 million in improper Medicare payments.
Elderly and terminally ill patients were reportedly targeted by the defendants with medically unnecessary grafts, after which more than $7.2 million in assets—including bank accounts and cryptocurrency—was seized by authorities.
The National Health Care Fraud Takedown of last year—the most extensive in the agency’s history—was also noted by the Justice Department, as 324 individuals were charged in schemes involving over $14.6 billion in intended loss.
Major Seizures Highlight Scale of Crypto Fraud Enforcement
During that operation, more than $245 million in cash, luxury vehicles, cryptocurrency, and other assets was seized by authorities.
Last November, Travis Ford, the former head of Wolf Capital, was sentenced to 60 months in prison for a $9.4 million cryptocurrency investment fraud that impacted roughly 2,800 victims, according to the DOJ, after he promised “1–2% daily returns” and diverted capital for personal use.
These stringent enforcement actions are being taken as legislative maneuvers are initiated by Congress to address cryptocurrency fraud.
Last month, the bipartisan SAFE Crypto Act was introduced by Senators Elissa Slotkin (D-MI) and Jerry Moran (R-KS), which would establish a federal task force within 180 days focused on reducing crypto scams through cross-sector coordination.
State lawmakers were urged this month by Manhattan District Attorney Alvin Bragg to criminalize unlicensed crypto operations, as he warned that a $51 billion criminal economy is thriving in regulatory blind spots.
“The most important shift right now is speed. We’ve seen roughly a 500% increase in AI-enabled fraud, and that increase isn’t just about volume—it’s about how fast criminal operations can now move,”
Ari Redbord, VP and Global Head of Policy at TRM Labs, told .
A warning was issued by Redbord that criminal groups are “no longer improvising” but are instead “running highly optimized, industrial operations that can steal and launder funds in hours rather than weeks.”
The “industrialization of money laundering” has been driven by that unprecedented speed, according to Ari Redbord, with professional laundering networks now operating as a shared infrastructure for scam networks, ransomware groups, drug trafficking organizations, North Korean cyber actors, and sanctions evaders.
“Looking ahead, AI-enabled fraud will continue to drive enforcement priorities, from scams built around AI trading narratives to synthetic and tokenized investment schemes designed to manufacture trust,”
he added.
