The victims getting their money back would defeat the whole purpose of Bitcoin. No one knows who originally owned it.

How about cash it out and trickle it down to us... or is all that just gonna magically disappear?

Well you could just reverse all the transactions. But they probably won't do that.

not really? presumably many people transfer via platforms like Coinbase that use a shared wallet system. You can't just "send the money back where it came from" as those wallets might not actually be controlled by the funds owner.

Coin base keeps transaction logs.

Unless this went through a mixer, Bitcoin is quite transparent.

Still easier to just transfer it all to the Treasury of course and screw the victims which is probably what will happen.

Two things are true:

* It's not as simple as sending the transaction back to the previous holder

* With some basic detective work the paper trails exist to find many of the victims and verify the amount that was lost.

Even if the victims get their money back it would only account for 25% or so because the price of BTC has moved so far since they lost it. (I think many victims will successfully petition for their money back)

In theory the court should give them back the actual bitcoin, not the monetary equivalent at the time. In a just world, anyway.

Based on current judicial trends, they’ll probably get Coinbase coupons worth 50% of a different coin or something.

> In theory the court should give them back the actual bitcoin, not the monetary equivalent at the time.

Why? Most of them didn't care about bitcoin, they bought it solely to give to the scammer.

Because they bought Bitcoin and gave it to the scammer, and that Bitcoin is even worth more now, so that’s the ‘most fair’ recompense.

After all, if someone stole $1k of gold from someone a decade ago, is giving them (now deflated) $1k USD fair, or is giving them (now worth) $3k in gold (same amount) fairer? Even if they bought the gold because the scammer asked them too.

The ‘fair enough’ treatment would be to give them the dollar equivalent at the time they gave the bitcoin to the scammer, and the rest goes… to the gov’t? As ‘payment’ for recovering it all and making the payment happen? Or to penalize the scammers? But actually the victims lost a lot of monetary value due to inflation, and lost gains from bitcoin price increasing.

The ‘meh, won’t get anyone run out of town with pitchforks’ is the gov’t seizes the bitcoin, punishes the offenders (how?), and somehow gives warm fuzzies to the victims without actually giving them anything to make their financial pain any better. Aka business as usual. Bonus points if you make them give more money to another party to do it (aka the ‘class action shuffle’ that has gotten popular in the last few decades).

> After all, if someone stole $1k of gold from someone a decade ago, is giving them (now deflated) $1k USD fair, or is giving them the same physical amount (now worth) $3k in gold fairer? Even if they bought the gold because the scammer asked them too.

I think that's an important difference. The fair thing is to "make them whole", to restore them to as if they'd never met the scammer. If they had a stash of gold that got stolen, the fair thing is to give them back that gold or the nearest equivalent. If they had a bunch of money that they sent to the scammer, the fair thing is to give them their money back; if they bought $50k in iTunes gift cards to send to the scammer we should be giving them back $50k, not 5,000,000 iTunes points. I don't see how that's any different for Bitcoin.

$50k USD now is != $50k USD at the time of the scam. And that isn’t even considering time value of money, but just baseline inflation!

> $50k USD now is != $50k USD at the time of the scam. And that isn’t even considering time value of money, but just baseline inflation!

Sure, and some legal regimes will apply a statutory interest rate to try to make up for that.

They'll get back the value of their loss (at the time) in $. The us government is not going to send them bitcoin like some crypto bro, and anyway they've already proven they are not to be trusted around digital assets.

Probably what will happen again and again. If they can do this, why stop at Cambodia? Watch as DOJ begins seizing more and more Bitcoin from everywhere.

Surely it would be possible for victims to come forward and provide a paper trail of WhatsApp transcripts and blockchain transactions.

That's the thing with Bitcoin, all transactions are permanently stored in a public ledger.

Unless the criminals used the Lightning Network of course, not likely though since the amount is so large.

It's part of America's new Strategic Crypto Reserve where Uncle Sam holds bags for crypto bros.

more likely to be used as a reserve to buy up the trillion dollar national debt

It is definitely going to magically disappear, as in used as funding for ICE.

their business is scam center that by definition is not counted by GDP anyway

That’s not necessarily true, though may be for Cambodia. GDP can include black market activities but countries differ in whether they include specific ones and how.

Right, it's not black market if you eventually pay some taxes on it somewhere. Dare we call it washed money, and for our American friends in the audience, laundered money.

as a pedantic aside Americans use the term washed or washing money interchangeably with laundering or laundered money

Laundering the proceeds from a black market transaction doesn't make the black market transaction not a black market transaction.

Does it even count in there though? Fraud isn't a normal transaction. It's the same as theft, which is simply a transfer from one person to another. An act of fraud or theft doesn't represent creation of value the way profit from legitimate transactions do for "black market" goods/services (even if the goods/services are illegal).

If we're just talking about the formula of GDP = gov spend + investment + consumption + net exports, then scamming foreigners would be captured under the "net exports" category. Similar to remittances, which are quite significant components of GDP for some countries.

Admittedly it's doubtful whether this kind of activity would be captured by official statistics.

Remittances aren't counted towards GDP either. The funds can contribute indirectly, as consumption or investment, if spent locally. This $15B didn't make it that far, though.

That’s a good point, transferring of assets isn’t counted - although if it’s imports perhaps that’s different. The cost of scamming may be counted, paying people to perform scams certainly could be depending on the type of calculation you do.

I know it’s a bit of a get out clause but it’s at least not obvious to me that this wouldn’t contribute, certainly the illegal nature is not a blocker for being counted in GDP.

Which makes it worse. A scamming operation that is 1/3 of the GDP is huuuuuuge.

It’s apples to oranges really. You confuse turnover with capital here.

I know the comparison is not correct but lets you see the magnitude of the operation.

That money would have flowed somewhere, also I'm not sure OP was talking about impacting the GDP just quantizing it. For Cambodia, it's an extraordinary amount of money. Actually for anywhere it's a ridiculous amount of money.

There are countries that count illegal activities in their GDP estimates.

And should their state sponsored criminal activities count for North Korean GDP for example?

Wait, hold on, I thought the promise of crypto was that:

1. The feds can't take your money.

2. Once your money's gone, it's gone.

If criminals can't count on #1 holding true, and their victims can't count on #2 holding true, what is even the point of it?

The new promise of crypto is helping organized crime or sanctioned individuals/countries with payments, and it's delivering!

> The new promise of crypto is helping organized crime or sanctioned individuals/countries with payments, and it's delivering!

It's not even new - Bitcoin right from the start was explicitly created to replace a centralized system used by criminals to evade currency controls. Bitcoin's creator(s?) saw that the various governments were eventually able to shut that down and set up Bitcoin as a decentralized system to avoid that problem.

It's not a flaw in crypto that criminals flock to it - it is built into the very design. This story shows that it is not perfect but to criminals it is the best that they have.

Instead of these two take this simple rule: not your key not your money.

There's no thing that the feds can't have because they have an infinite amount of sanctions violence and tools at their disposal to make anyone do what they want, one way or another.

Criminals can’t count on #1 if they hold the keys on them when they get arrested.

>were previously stored in unhosted cryptocurrency wallets whose private keys the defendant had in his possession. Those funds (the Defendant Cryptocurrency) are presently in the custody of the U.S. government.

They used the forbidden technique of 5€ wrench.

It's not even forbidden, anyone can use it.

Beating someone with a wrench feels unlawful/forbidden pretty much everywhere.

Unless you are FBI of course

I mean, I don't disagree, but there are far more government agencies around the world that will beat you with a wrench first.

If you are lucky, then the three letters are from Latin alphabet, but you never know

Uh, no, a judge can put you in prison, but it's still very much unlawful for the FBI to beat you with a wrench.

Its not clear how the feds got the money

More information as the mystery deepens, it's not proceeds from just the pig butchering

https://www.elliptic.co/blog/15-billion-us-seizure-reveals-p...

> 1/3 of the country's entire GDP

$15 billion is a huge number to be sure, but it's unclear from the article how many years it took to acquire.

So should we praise the gang's money saving habits?

Probably not, but we should probably not compare a total (potentially across years) with something that is measured yearly like GDP, kind of misleading.

No, isn't it more likely about them earning money quicker than they are able to launder it?

No. Just point out as others have that $15 billion vs GDP isn't a likes comparison.

I think they mean the bulk of the sum came from the rise of BTC, moreso than the scam. Like a purse snatcher steals a total of $200 and buys lottery tickets making their proceeds worth $40k.

Pitfalls of comparing flows with stocks.

Better be "three months of the country's GDP".

Compared to Cambodia, sure, but it's an international crime gang, with this particular one being just one branch. I wonder if this was their biggest hoard or if they had more?

Really poor financial management to have all that money concentrated that much though. It either means they dropped the ball bigly, or this is spare change for them... although Bitcoin's market cap is $2.24 trillion at the moment, $15 billion is a significant chunk of that.

In $5 wrench we trust. - Bitcoin

That doesn't appear to be how they seized the funds though, the criminal hasn't been caught so they must have hacked his devices to gain access to the private keys. No $5 wrench involved.

It’s probably a computer hack of some sort that led to accessing the wallet password etc.

I bet somebody wrote down their password, too scared of what would happen to them if they were to forget it.

Nah, you know he had his wallet backed up to his My Documents folder as json…

not a sticky note on the desktop?

I assume by wrote down you mean they saved it in a file somewhere. Amusing to think it would have been safe from that kind of hack if they'd written it on a post it node and stuck it on the bottom of their keyboard.

Which just goes to show that custody is a hard and almost always under-estimated problem.

It is, but it's not so hard that you can't figure it out to keep your 15 billion safe.

Well these guys apparently didn't manage that.

There is no honor among pig butchers.

There is no honor among people in general.

Sorry you've not met enough honorable people to have that level of cynicism.

It's much harder to keep things safe under rule of villains than rule of law.

The difference between 15 billion and 2.24 trillion is pretty much 2.24 trillion. I'm not sure there is a definition of the word where this is true .

I expect it would be pretty significant probably when compared to the actual fiat inflows/outflows to and from the cryptocurrency market.

Trying to liquidate $15bn to USD reasonably quickly would very likely cause a massive drop the price, which would correspondingly drop the market cap by potentially many times that $15bn.

> although Bitcoin's market cap is $2.24 trillion at the moment, $15 billion is a significant chunk of that.

Literally about 0.67%.

I wouldn't call that significant.

Does not apply.

Cambodia is just a proxy, a land where the Chinese gangs act with impunity. Earned with slave work, money is laundered in casinos and no Cambodian is seeing a cent of it.

Might as well say "nearly unfathomable amount of money in Congo" because that's just how disconnected the money is to the country.

No, some Cambodians are seeing a very sizeable benefit, probably the standard 20% that the leading family cream off of any major investment in the country.

And BTW it is not just the Chinese, there are innumerable other operators, including a whole bunch of smaller 'startups'.

They operate because Cambodia openly accepts it, and takes a cut, not because they are somehow so clever as to disguise the real business being conducted in closed-up apartment blocks.

They operate in places like Cambodia but it's the Chinese

There's areas in Laos and Cambodia they control where it literally operates under a different set of laws. One of the areas, I think in Laos, Americans aren't even allowed to enter

The facilities aren't even remotely hidden so it's fair to blame Cambodia for allowing it. They have towns built up around them with restaurants and shops and normal economic functions to support the people running these slave towers. A good chunk of the money is flowing back into China, but there's definitely a good bit that seeps out into the Cambodian economy. Hence why Cambodia's government is more than happy to let it operate.

In the case of Myanmar, I think their biggest problem is the country has been in a war for decades with loads of various factions and it's too chaotic for any government to attempt to get anything under control.

Yes a huge chunk of the blame falls on Cambodia, Laos, Myanmar, etc

And bordering countries like Thailand are running into issues where people are getting trafficked through Thailand to these other countries. So it's actually ruining the reputation of Thailand and lots of Chinese people are wary of traveling to Thailand because of it

To provide a bit more context what happens is Chinese people will give fake job offers to their fellow Chinese and then basically kidnap them when they arrive to Thailand and take them to another country to work in a scam center

Khesrau Behroz did an amazing podcast about those operations (in German though) [0]. Basically when there was a crack down on providers of illegal sports betting in China, they went abroad and diversified. The betting operation is used to launder the money from those scam operations and betting is still immensely popular in China and done via VPN. Those East Asian sport betting providers are sponsors of many Champions League clubs so their (often changing) names get know the gamblers in China watching the games.

So yea, there are massive amounts of money involved.

[0] https://www.rbb-online.de/legion/

There's an interesting "Search Engine" podcast (in English)[0]. Apparently a lot of the people doing the actual scamming are human trafficked and being held in compounds against their will.

[0]https://www.searchengine.show/whos-behind-these-scammy-text-...

From what I understand, a number of them are Chinese nationals. I suspect that taking Chinese slaves might not be a great idea. China tends to carry a big stick; especially in that region.

Wouldn't surprise me, if the DOJ had some "under-the-table" help from Chinese sources, but not in any way that anyone can prove.

If you don't want to sign up for a podcast, John Oliver did a fairly decent bit about it: https://www.youtube.com/watch?v=pLPpl2ISKTg

China permitted/sponsored rebels to seize a decent chunk of the Myanmar side of the Chinese/Myanmar border after a number of Chinese citizens (allegedly including some undercover Chinese police) were killed in a scam compound there.

https://en.wikipedia.org/wiki/Operation_1027

Except it seems it's Chinese Nationals running the operations in the first place, who undoubtedly have connections to the CCP to tacitly look the other way.

Laos, Myanmar, Cambodia thailand also catched a few. I would not be surprised if they take advantage of westerners as well. 15Billion++ is a big incentive.

I heard an agent got court for opening bank accounts for them in Pattaya, over 500 accounts. We have had crackdowns on banking here in Thailand ever since.

I'm very curious what happens to that money. I very much doubt any of the actual victims will see it.

To the Bitcoin Strategic Reserve it goes!

Not sure if you're joking about the victims getting their money back. In case you're not, they won't.

The DOJ adds seized crypto to the American crypto reserve. https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-pr...

From the webpage: " The Executive Order begins to resolve the current disjointed handling of cryptocurrencies seized through forfeiture by, and scattered across, various Federal agencies. Currently, no clear policy exists for managing these assets, leading to a lack of accountability and inadequate exploration of options to centralize, secure, or maximize their value. Taking affirmative steps to centralize ownership, control, and management of these assets within the Federal government will ensure proper oversight, accurate tracking, and a cohesive approach to managing the government’s cryptocurrency holdings. This move harnesses the power of digital assets for national prosperity, rather than letting them languish in limbo. "

It’s almost like one criminal organization stealing from another.

Well how would you know who to return it to? It's crypto, the genius system which will totally replace money, which doesn't allow you to track simple things like transaction history and remedy fraud like this.

It's not like a cambodian pig butchering operation is going to keep detailed ledgers of who they scammed and for how much.

> ”Well how would you know who to return it to? It's crypto, … which doesn't allow you to track simple things like transaction history”

That’s not actually correct. The blockchain contains a permanent, immutable, and public record of every transaction.

Obviously you also need a way to connect a given wallet ID (address) back to it’s owner, but if transactions originated from regulated platforms like Binance then they will have those records thanks to KYC/AML rules.

If the transaction originated from a private wallet, a fraud victim could simply submit proof of their wallet ID as part of their claim.