The scam economy continues to expand not by accident, but because victims are losing money on a massive scale. These losses are not a side effect but the primary capital source sustaining scam centers, money laundering networks, and the entire cross-border fraud infrastructure. Without a steady flow of victim funds, fraud organizations cannot operate compounds, pay personnel, move money across borders, or withstand law enforcement pressure. Forced labor and coercive recruitment emerge only after the system is established and profit maximization is pursued—they are not the starting point of the fraud industry. The economic logic is clear: fraud scales because it generates revenue, and that revenue comes almost entirely from victims.

However, once scam funds are transferred, victims are promptly excluded from the subsequent resolution mechanisms. Even when consent is manufactured through manipulation and deception, authorized transfers are classified as "voluntary actions." Financial institutions and platforms use this classification to define liability. Although banks and trading platforms conduct "Know Your Customer" (KYC) checks on account holders, the associated identity information remains protected by confidentiality rules and is not disclosed to victims. These rules were originally designed to protect privacy and financial stability, but their practical effect is to prevent victims from identifying counterparties, tracking fund flows, or obtaining the critical information needed to pursue recovery. Identity verification systems were not designed to facilitate the return of money.

This exclusion has direct legal consequences. Civil recovery requires an identifiable defendant who actually controls the funds and holds executable assets. Fraud structures are specifically designed to break this chain. The person who contacts the victim does not own the receiving account; the account holder—often a so-called "money mule"—does not retain the funds, typically lacks assets, and is often unaware of the overall operation. Even when mules are arrested or prosecuted, they cannot return money they never held. Those who actually direct the funds operate across borders, beyond the jurisdiction of the victim's local courts. In practice, there is virtually no identifiable party against whom a valid civil lawsuit can be filed. Civil remedies are not failing—they simply cannot be initiated.

By the time law enforcement gets involved, the legal nature of the funds has already changed. Scam proceeds flow rapidly through multiple jurisdictions, accounts, and asset forms, often passing through crypto wallets, over-the-counter (OTC) brokers, and informal liquidity providers, causing any clear chain of ownership to completely disappear. Once funds are commingled and converted, individual attribution becomes legally unprovable. At this point, funds are classified as "unidentifiable assets." Asset forfeiture systems are designed for precisely this scenario: when ownership cannot be reconstructed, funds are transferred to state custody to preserve their value. This process is legal, orderly, and highly consistent across jurisdictions—but its institutional design inherently conflicts with restitution to individual victims. Assessments from global law enforcement agencies and multilateral organizations consistently indicate that the proportion of cross-border scam funds actually returned to victims has long remained below one percent.

The same logic applies to regulatory fines imposed on banks, payment platforms, and digital asset exchanges. Penalties for compliance failures or inadequate monitoring often reach billions. These fines acknowledge systemic vulnerabilities but do not address actual victim losses. The money is paid to governments, not to those who lost funds. Victims have no legal standing in these settlements or penalties, no access to the funds, and no right to participate in their distribution. Private losses are converted into public revenue through regulatory processes.

Whether through asset forfeiture from criminal networks or massive fines imposed on banks and exchanges, the outcome is always the same: money originating from victim losses ends up held by the state, and restitution is systematically absent.

The result is a structural imbalance. Victims provide the capital that sustains the fraud economy, yet they are excluded at every stage of resolution. They cannot access investigative information, cannot file civil claims, and cannot benefit from forfeited assets or fines. When funds cannot be returned due to money laundering, they are absorbed by the state rather than redirected to compensate victims. Law enforcement closes cases administratively, but the loss is never repaired.

This structure creates a false dichotomy in policy discussions: either funds can be returned to specific victims, or they must belong to the state. This is not inevitable. Even when individual attribution is no longer possible, category-based compensation remains feasible. A portion of forfeited scam funds and regulatory fines could be earmarked to support the same class of victims—through compensation funds, debt relief, legal assistance, and restitution support. Such mechanisms could acknowledge and respond to substantive harm, even without reconstructing precise ownership.

Scam victims are among the most undervalued and underserved vulnerable groups in the global financial system. Shame, stigma, and the narrative of "personal fault" suppress reporting rates and isolate victims. Treating their losses as private mistakes rather than public harm only reinforces the operational foundation of the fraud economy. As long as restitution remains an exceptional outcome rather than an institutional goal, the scam industry will not disappear. Advocacy and arrests may disrupt individual operations, but they cannot change the incentive structure sustaining the entire system: victim losses remain profitable, and those losses are never returned.

Rethinking anti-fraud policy with "restitution" at its core does not require perfect attribution. It requires acknowledging a reality: when money cannot be returned to individual victims due to money laundering, it should not automatically belong to the state. Redirecting a portion of forfeited assets and fines back to victims—even collectively rather than transaction by transaction—would align enforcement outcomes with actual harm. Until then, the system will continue to close cases effectively while leaving those who paid the price persistently ignored.