The US Treasury Financial Crimes Enforcement Network linked approximately $12.7 billion in suspicious financial activity to digital-asset investment scams operated by overseas criminal organizations, according to a review of 33,904 Bank Secrecy Act reports filed between September 2023 and December 2025.
FinCEN published a financial trend analysis and a related alert on September 3, urging financial institutions to report suspicious transactions connected to the scams, commonly called pig butchering, romance baiting, or cryptocurrency confidence schemes. The agency stressed that the $12.7 billion figure reflects flagged activity, not confirmed victim losses, because the reports can include duplicate filings and attempted transactions that were never completed.
The scams use fake personas and social-engineering tactics to lure victims into fraudulent crypto investment platforms, often through romantic or business relationships built over weeks or months. Transnational criminal organizations based in Southeast Asia run what FinCEN describes as industrial-scale scam compounds, and the FBI Internet Crime Complaint Center reported that US victim losses from these schemes jumped from $907 million in 2021 to $7.2 billion in 2025.
FinCEN said the number of BSA reports about suspected investment scams grew by an average of 10.9 percent month-over-month during the review period, while scam-related financial activity grew an average of 18 percent month-over-month. The accelerating growth rate suggests the problem is getting worse faster than institutions are improving their detection capabilities.
Who filed the reports
Money services businesses, mostly crypto firms, filed 55 percent of the BSA reports and flagged $5.5 billion in suspicious activity. Banks filed the remaining 41 percent of reports, covering $6.4 billion in flagged transactions. The numbers suggest both the banking system and crypto-native firms are capturing significant fraud volume, though the two categories overlap because some transactions touched both types of institutions.
Ethereum, Tether USDT, and Circle USDC appeared most frequently in the filings, with at least 22 different cryptocurrencies identified across the reports. The scammers relied on established, liquid digital assets rather than creating custom tokens, which made the fraud harder to detect because the transactions blended in with legitimate trading activity on major exchanges. Stablecoins in particular have become the preferred medium because of their dollar-pegged stability and deep liquidity across multiple blockchains.
The Southeast Asia connection
The compound model has expanded rapidly across Myanmar, Cambodia, Laos, and the Philippines, according to a February 2026 Chainalysis study. Workers inside the compounds are often trafficking victims themselves, forced to operate under threat of violence to meet daily quotas for victim recruitment. The United Nations Office on Drugs and Crime has documented hundreds of compounds across the region, and several governments have begun crackdowns on the operations.
A RUSI report published in May 2026 described how stablecoins have become the preferred medium for scam center operations because of their liquidity and cross-border accessibility. Guarantee marketplaces, which function as informal escrow services for criminal transactions, have proliferated on Telegram and other messaging platforms, creating an additional layer of infrastructure that moves funds outside the regulated financial system.
Red flags for banks
The FinCEN alert lists indicators that banks should watch for: customer IP addresses geolocated to known scam center regions, transactions with language promising guaranteed returns, money movements to unregulated exchanges, and deposits followed by immediate transfers to offshore crypto platforms. FinCEN wants banks to file SARs promptly when these patterns appear, rather than waiting for additional corroboration that may never come.
The shift toward stablecoin-based laundering complicates detection. Scammers increasingly move funds through USDT and USDC on multiple blockchains, using mixers and chain-hopping techniques to obscure the trail. Traditional anti-money laundering tools built for wire transfers and bank accounts are poorly suited to tracking these flows, which is why FinCEN is pushing for tighter integration between banks and blockchain analytics firms that can trace on-chain activity.
Enforcement steps up
The FBI Scam Center Strike Force, established in March under Executive Order 14390 targeting cybercrime and fraud, has pursued multiple prosecutions this year. The DOJ coordinated with Thai and Cambodian law enforcement in several operations, resulting in arrests and asset seizures. But the scale of the problem continues to outpace enforcement, and the FinCEN alert is aimed at tightening the compliance net around the financial infrastructure that supports the scams.
Gene Lange, performing the duties of Under Secretary for Terrorism and Financial Intelligence, called digital asset investment scams one of the most significant fraud threats facing Americans. The enforcement campaign is broadening from monitoring to active disruption, with FinCEN now coordinating with international partners to target both the financial networks and the physical compounds where the fraud originates.
The analysis covers all 50 states and several US territories, with victims spanning every age group. FinCEN said the sophistication of the scam operations has increased, with operators now using AI-generated deepfake videos and voice cloning to make their fake personas more convincing. The combination of AI-enabled deception and crypto-native financial infrastructure has created what officials describe as a new category of organized crime that requires coordinated international response.
For crypto exchanges, the alert may accelerate adoption of real-time transaction monitoring tools. Several major platforms, including Binance and Coinbase, already use blockchain analytics from Chainalysis and Elliptic to flag suspicious flows. But smaller exchanges and over-the-counter desks often lack the same level of surveillance, creating gaps that scam operators exploit. FinCEN is signaling that institutions operating in the US financial system must do more to close those gaps or face increased regulatory scrutiny.
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