The continued expansion of the fraud economy is no accident, but a consequence of the massive financial losses suffered by victims. These losses are not a byproduct, but the primary source of capital for fraud centers, money laundering networks, and the entire infrastructure of transnational fraud. Without a constant influx of victim funds, fraudulent organizations cannot operate their facilities, pay salaries, conduct cross-border money transfers, or withstand pressure from law enforcement. Forced labor and coercive recruitment are methods employed only after the system has been established and profits maximized—not the starting point of the fraud industry. The economic logic is clear: fraud scales because it generates revenue, almost exclusively from the victims.

However, once fraudulent funds have been transferred, victims are quickly excluded from further processing. Even if consent has been feigned through manipulation and deception, authorized transfers are still considered "voluntary." Financial institutions and platforms use this classification to define liability. Although banks and trading platforms conduct KYC (Know Your Customer) checks on account holders, this personal data is protected by confidentiality agreements and is not disclosed to victims. These systems, ostensibly designed to protect privacy and financial stability, effectively prevent victims from identifying counterparties, tracing money flows, or obtaining crucial information for initiating legal action. Identification systems are not designed to facilitate the recovery of funds.

This exclusion has direct legal consequences. Civil action requires an identifiable defendant who has actual control over the funds and possesses recoverable assets. Fraudulent schemes are designed to disrupt this relationship. The person contacting the victim is not the account holder; the account holder—often a so-called "money launderer"—does not have access to the funds, typically possesses no assets, and is unaware of the entire operation. Even if the money launderer is arrested or prosecuted, they cannot return money they never possessed. Those who actually control the flow of funds often operate across borders and outside the jurisdiction of the courts in the victim's location. In practice, there are virtually no targets for an effective civil action. Civil claims have not failed; they are simply impossible to initiate.

By the time law enforcement intervenes, the legal nature of the funds has already changed. Proceeds from fraud flow rapidly through various jurisdictions, accounts, and asset forms, often via crypto wallets, OTC brokers, and informal liquidity providers, completely obscuring the chain of ownership. Once funds are commingled and transformed, individual ownership can no longer be legally established. In this case, the funds are considered "non-distributable assets." Asset recovery schemes exist for such cases: If ownership cannot be recovered, the funds are transferred to national custody for safekeeping. This process is legal, orderly, and largely uniform across different jurisdictions, yet its design contradicts the principle of returning funds to individual victims. Assessments by global law enforcement agencies and multilateral organizations consistently show that the actual return of funds from cross-border fraud to victims has long been below one percent.

The same applies to fines imposed on banks, payment platforms, and digital asset exchanges. Fines for non-compliance or inadequate oversight often amount to billions of dollars. While these fines acknowledge systemic deficiencies, they fail to address the actual losses suffered by victims. The money flows to governments, not to the injured parties. Victims have no legal standing, no access to the funds, and no right to participate in the distribution of compensation or penalties. Private losses are transformed into public revenue through regulatory processes.

Whether through the seizure of assets belonging to criminal networks or through massive fines against banks and stock exchanges, the result is always the same: The money from the victims' losses ultimately ends up in the hands of the state, while repayment within the system consistently fails to materialize.

This ultimately leads to a structural imbalance. The victims provide the capital that the