California physician seeks court protections in $55 million crypto fraud case

By AI, Created 11:26 PM UTC, May 26, 2026, /AGP/ – Attorneys for a California physician who lost more than $55 million in an alleged cryptocurrency fraud are asking a federal court in Washington, D.C., to set rules for how seized digital assets are returned to victims. The filing pushes for Crime Victims’ Rights Act protections and more transparency before the government distributes cryptocurrency tied to the case.

Why it matters: - The motion could affect how billions of dollars in seized cryptocurrency are handled in one of the most consequential victim-recovery fights in crypto fraud. - The filing argues that victims need a clear process before asset distributions that may determine millions of dollars in property rights. - The case also highlights growing pressure on federal courts to balance victim rights, forfeiture procedures and fast-moving crypto asset tracing.

What happened: - Attorneys Marc Fitapelli of MDF Law PLLC and David Silver of Silver Miller filed a motion in the U.S. District Court for the District of Columbia on behalf of a California physician. - The physician lost more than $55 million in a cryptocurrency fraud scheme tied to international cybercriminal organizations. - The motion was filed in United States of America v. Approximately 225,364,961 USDT, Civil Action No. 25-cv-01907. - The filing seeks procedures under the federal Crime Victims’ Rights Act to govern the return of cryptocurrency seized by the U.S. government. - The case is pending in the U.S. District Court for the District of Columbia.

The details: - The motion says scammers built long-term romantic relationships with victims while steering them into fake cryptocurrency investment platforms. - The filing describes the operation as an elaborate online fraud designed to look legitimate. - The attorneys say their firms focus on helping victims of fake investment platforms, romance-investment scams, unauthorized account takeovers and other digital asset fraud. - The firms say they collectively represent victims who have lost more than $1 billion in cryptocurrency scams. - The motion says the victim suffered severe personal and financial harm, including large tax liabilities tied to transactions she believed were legitimate investments. - The attorneys argue the government should not move forward with distributions without giving victims a chance to be heard. - The motion seeks transparent and orderly procedures before further distributions of seized cryptocurrency occur. - The filing raises concerns about civil asset forfeiture, where government seizure can happen before meaningful judicial review by victims or property owners. - The attorneys say those concerns are intensified in cryptocurrency cases because of volatile prices, tracing complexity and thousands of potential victims across multiple jurisdictions.

Between the lines: - The case is part legal fight, part language fight. - Fitapelli said the phrase “pig butchering” is offensive and dehumanizing, and Silver said the firms use the term DECEVE, short for Deceptive Electronic Consumer Exploitation Via Engagement. - The motion appears aimed at preserving victim leverage before the government decides how to distribute seized digital assets. - The public push reflects how many crypto fraud victims stay silent because the crimes are personal, embarrassing and difficult to unwind.

What’s next: - The court will decide whether to grant the requested Crime Victims’ Rights Act procedures. - If the motion succeeds, the court could require a more transparent process before additional cryptocurrency distributions move forward. - The matter remains pending, and a copy of the motion was included with the release.

The bottom line: - The filing asks a federal judge to put victim protections ahead of any final distribution of seized crypto, arguing that transparency and due process are essential when fraud losses run into the tens of millions.