Scam Alert: $250K Sent to Fake Trump Inauguration Fund

Crypto-related fraud continues to gain momentum. As public trust in digital currencies grows, so does the activity of those looking to exploit it. The most dangerous schemes are often disguised as social or political causes. Today we delve into one such case, reported by the District of Columbia's U.S. Attorney's Office.

Elections, Crypto and the Fake Witkoff

Crypto scams are no longer limited to phishing links, hacked exchanges or shady tokens. Sometimes, it all starts with a single email. One message. With polished language, a formal tone and, most importantly, a familiar name in the signature.

That’s exactly what happened here. On December 24, 2024, a U.S. citizen received an email supposedly from Steve Witkoff, a well-known real estate developer and Republican supporter closely associated with Donald Trump. The message mentioned the upcoming inauguration of Trump and his vice-presidential candidate JD Vance. The fraudster claimed a committee was being formed and that donations were being collected to fund the celebratory event. The stated goal was to support the inauguration. To speed things up, the sender suggested sending funds in cryptocurrency specifically in USDT.

The email address looked official, and the name seemed trustworthy. The man transferred a quarter of a million in USDT, believing he was making a political donation that might even come with future benefits. Naturally, the scammer quickly laundered the money through various crypto exchanges. However, some of the transactions were traced. The FBI joined the investigation and tracked down wallets where part of the funds still remained. In the end, $40,3K was recovered. The rest likely went through mixers or was dispersed via complex transaction chains.

This wasn’t the first scheme of its kind. But it stood out. The scammer used the name of a public figure and referenced a major political event. There were no investment offers, no token growth promises. Just a well-timed appeal to support a cause and proved effective.

When the Money Does Come Back

Stories of recovered crypto funds always sound like minor miracles. Because in most cases, once the funds are gone, they stay gone. Still, there are occasions when law enforcement, intelligence agencies or crypto platforms manage to step in.

In April 2023, the U.S. Department of Justice announced the seizure and return of more than $112 million linked to fraudulent crypto platforms like “Suprafinance” and “RevolutInvest.” These were classic examples of so-called pig butchering scams. Scammers developed relationships with victims, convinced them to invest in “crypto trading bots” or “asset managers” and eventually drained their accounts. The funds were routed through platforms controlled by the criminals. The Department, with FBI support and seizure warrants for specific wallets, managed to freeze and confiscate part of the stolen assets.

Modern blockchain analytics tools, such as Chainalysis and TRM Labs, use techniques like address clustering, timestamp correlation and behavioral analysis. Even if a fraudster uses dozens of intermediate wallets, these systems can often identify a trail leading to an exchange or service where personal identification is required.

For more information on this topic, read our article Chainalysis Maps How Crime Went Crypto – And Where It Fails to Hide

Still, these success stories are rare. Cryptocurrency can easily slip past observation. Tools like mixers (for instance, Tornado Cash, a platform once widely used by cybercriminals and now under U.S. sanctions), privacy-focused coins like Monero and the fragmentation of large sums into numerous micro-transactions all make fund tracking extremely difficult.

The FBI and other government agencies have been building their own blockchain tracing systems for years. But even with advanced tools, only a fraction of stolen crypto can be retrieved.

Thus, expectations of full recovery are usually unrealistic. In the case of the “inauguration scam” only $40,3K of the $250,300 USDT was recovered. The rest vanished into the blockchain.

How to Protect Yourself from Crypto Scams

There’s something especially cynical about scams disguised as charitable or civic causes. When someone asks for help for sick children and turns out to be a bot using stolen images. Or when you receive an email from what looks like a political campaign, and instead of supporting a candidate, you end up funding a criminal.

To avoid becoming a victim of crypto crime, follow a few strict but effective rules:

• Always verify the source. For donation requests, check official websites and verified social media accounts.
• Never send crypto in response to an email request, even if it looks professional and bears a familiar name. Identities can be faked. Email addresses even more so.
• Don’t trust how polished the message looks. Today’s AI tools can generate emails that rival the best PR firms.
• Double-check independently. Contact the campaign office, organization or foundation directly.

Deception isn’t always blatant. Often, it plays on trust. Especially in areas where people are inclined to believe: in charity, in politics, in causes that feel personal or ideological.

Crypto remains a convenient tool for such schemes. Transactions are fast, anonymity is high and reversal is extremely difficult. As long as that remains true, fraudsters will continue to exploit these gaps.

So the best advice is: pause before sending money, even if it’s supposedly for a good cause. Stay alert. Protect your wallets. And think twice before trusting emails (even ones signed by “Steve Witkoff”).