US DOJ Recasts Crypto as Fraud Infrastructure in New Review

The US Department of Justice (DOJ) is signaling a major shift in its approach to crypto enforcement.

Authorities frame digital assets not as standalone “crypto scams” but as a central tool in modern, industrial-scale fraud operations.

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DOJ Recasts Crypto as Fraud Infrastructure as AI Turns Scams into Industrial Operations

In its 2025 Year in Review, the DOJ highlighted three high-profile cases that illustrate how crypto has become embedded in traditional crimes, citing:

Medicare fraud
Multi-million-dollar investment schemes, and
Asset laundering.

According to the DOJ, prosecutors charged 265 defendants in 2025 with an aggregate intended loss exceeding $16 billion. This is more than double the previous year.

The Fraud Section operates through specialized units, including the Health Care Fraud Unit, which oversees seizures of crypto alongside cash, luxury vehicles, and other assets.

Medicare Fraud: Elderly Targeted in $1 Billion Graft Fraud, Crypto Seized

One of the most striking cases involved Tyler Kontos, Joel “Max” Kupetz, and Jorge Kinds, charged with a $1 billion amniotic wound allograft fraud.

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Tyler Kontos, 29, of Mesa, Arizona, Joel “Max” Kupetz, 36, of Scottsdale, Arizona, and Jorge Kinds, 49, of Phoenix, were charged with conspiracy to commit health care fraud, health care fraud, and conspiracy to defraud the U.S. in connection with a $1 billion wound scheme.

— Navajo-Hopi Observer (@NHOnews) July 8, 2025

The scheme targeted elderly and terminally ill patients with medically unnecessary grafts, generating over $600 million in improper Medicare payments.

Authorities later seized more than $7.2 million in assets, including crypto.

Wolf Capital CEO Sentenced in $9.4 Million Crypto Investment Scam

In another case, Travis Ford, former CEO of Wolf Capital, was sentenced to five years in prison for a $9.4 million crypto investment fraud promising 547% annual returns to roughly 2,800 investors.

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These cases illustrate a broader DOJ strategy: crypto is increasingly treated like traditional forms of illicit value like cash, cars, or luxury goods, rather than as a novel, speculative asset.

Enforcement is no longer focused on price manipulation or retail hype but on asset recovery and dismantling criminal infrastructure.

It aligns with a recent DOJ move to charge a Venezuelan national over alleged $1 billion crypto laundering spanning the US and high-risk jurisdictions.

AI Turns Crypto Schemes into High-Speed Crime Networks

This industrialization of fraud has aligned with broader US policy priorities. The DOJ’s “America First” enforcement posture dovetails with the recently introduced bipartisan SAFE Crypto Act, which would establish a federal task force within 180 days to coordinate efforts to combat crypto scams.

“To establish a task force for recognizing and averting cryptocurrency scams, and for other purposes,” read a text in the bill.

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Meanwhile, Manhattan District Attorney Alvin Bragg has urged states to criminalize unlicensed crypto operations. He warned that a $51 billion criminal economy is thriving in regulatory blind spots.

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The DOJ and other regulators are likely to focus on AI-driven schemes ranging from synthetic tokenized investments to scams built around AI trading narratives.

Crypto’s regulatory trajectory is increasingly shaped by its role as systemic financial plumbing rather than by market volatility. This brings digital assets closer to the compliance, oversight, and enforcement expectations long associated with TradFi.

As the DOJ recasts crypto as core infrastructure for modern fraud, regulatory and enforcement attention will increasingly target the speed, scale, and operational sophistication of crypto-enabled crime.

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Author: Lockridge Okoth

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