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Former FBI Special Agent Stephanie Talamantez has more than a decade’s worth of experience leading cryptocurrency fraud investigations and recovering stolen digital assets. Now the senior managing director at Guidepost Solutions, she said as more institutions and individuals invest in digital assets, they need a cogent strategy to protect themselves from increasingly sophisticated criminals.
Talamantez spent most of her FBI tenure working large scale fraud, with the last decade focused on cryptocurrencies. While she eventually led investigations resulting in more than $350 million in asset forfeitures, her beginnings were humble.
Cryptocurrency fraud wasn’t taken seriously at first
Around 2013-2014, Talamantez noticed fraudsters were shifting to cryptocurrencies, a suspicion confirmed by several sources. The dollar amounts were substantial, but the personnel the Bureau devoted to digital asset crime were focused on other areas.
So she went to school, teaching herself everything she could about a nascent field. As the dollar amounts grew, Telemantez urged FBI officials to take this emerging threat seriously.
“I felt a lot like I was banging my head trying to get people to pay attention, that this was where criminals were moving to do business, not only for drugs, but for child exploitation, fraud schemes, just for everything,” Talamantez said. “I was starting to see the move and the shift. And I think there was this thought and ideology that crypto was going to go away, that it was just sort of nonsensical, and it would eventually fall apart.”
“I don’t think they appreciated the tenacity and the younger generation’s drive to have more control over their own assets.
“That was the perfect storm, and the Bureau was really far behind. When I left two years ago, they were just starting to put crypto teams together.”
Talamantez fought to convince prosecutors to prioritize cryptocurrency fraud. They struggled to apply established law to novel situations like establishing venue and calculating loss. Regulators and law enforcement tried to catch up through regulation via prosecution, where they sought to establish law by which cases were prosecuted and which ones were not.
That left gaps, and confused innovators. Which existing laws would be applied? Were they appropriate? What laws would be created?
“The goal was to stop going after these companies who didn’t have an intent to do something wrong,” Talamantez said. “They were building something in a framework where there were no guidelines, and you can’t then retroactively put all these guidelines in and then convict people of a crime that they didn’t know they were committing. You need to have knowledge and intent.
“So I think it’s it’s difficult. I can’t even imagine how difficult it must be to to have a crypto business, and trying to stay in these guardrails that keep moving all over the place.”
Instead of working together, law enforcement and industry labored under their own pressures; the former was playing catchup in a new world, while the latter was bombarded with compliance responsibilities. Those fears created silos instead of collaboration.
How cryptocurrency fraudsters adapt
Cryptocurrency fraudsters are, if anything, resourceful, and Talamantez has seen them deftly evolve their tactics. Early on they were rudimentary, with fake investment and mining companies. Tracking them was easier then, as there were only a few coins, little volume, no bridges and few sophisticated instruments.
As more investing tools were developed, tracing cryptocurrency fraud became more difficult. Transaction activity also increased, which raised fees. That caused some criminals to get lazy.
Law enforcement was forging relationships with industry. Talamantez said more cryptocurrency exchanges began accepting third-party subpoenas. Near the end of her FBI tenure, stakeholders were working together to trace and seize assets.
Talamantez sees a significant increase in social engineering fraud, with both lay investors and sophisticated tech people falling victim. Following the Coinbase breach, several victims were bilked after talking to cryptocurrency fraudsters posing as Coinbase employees. Those fraudsters also took harvested information investors willingly posted online.
“These bad actors are able to socially engineer these people by creating fear in the moment,” Talamantez explained. “And they’re so convincing; I’ve seen people click on things, move things, do the most incredible, mind-blowing things. But in that moment, I think because people, especially people who have large sums of crypto, are so afraid of losing it, that they get caught in this moment without having time to process.”
Pig butchering, where cryptocurrency fraudsters gradually build up relationships with victims while relieving them of their money, is increasingly popular, as are romance, employment and investment scams. One recent pig butchering scam garnered $15 billion.
The losses are more than financial. Talamantez said cryptocurrency fraud is so lucrative that criminals engage in human trafficking to staff call centres where people are forced to work and conduct social engineering and romance scams.
Talamantez uses the same diligence she displayed at the FBI in her role at Guidepost Solutions. Guidepost Solutions works with officials in more than 40 countries, along with many private sector firms and exchanges. That allows them to bridge gaps that law enforcement is stretched to tackle. Together, they can conduct overseas investigations and conduct seizures with law enforcement’s help.
“It really has to be collaborative effort,” Talamantez said.
What’s coming in 2026 and beyond
2026 will be the Year of the Stablecoin, with the full effect felt in early 2027, Talamantez said. That helps investors, provided their stablecoin holdings are properly pegged. The bad side of that mostly singular focus is that cryptocurrency fraudsters could draw less attention elsewhere. Once stablecoins have been addressed, tokenization may flourish.
“I think there will be in this next year, a whole foundation of things that are going to pop up just for supporting the stablecoin infrastructure,” Talamantez said. “That will lead to a lot of other new things and and obviously with the AI technology, potentially some zero knowledge proofs. There are going to be a lot of exciting and terrifying things within the next 18 months or so, but I’m excited to see what they are. I’m watching them evolve.”