The U.S. Department of Justice (DOJ) has announced the seizure of $225 million in cryptocurrency. The cryptocurrency has been linked to scams often referred to as “pig butchering,” which has cost billions of dollars globally.
Federal prosecutors filed a civil forfeiture action targeting more than $225 million in cryptocurrency traced to a sprawling web of fraudulent investment platforms.
The complaint was filed in the U.S. District Court for the District of Columbia, and alleges the crypto was part of a blockchain-based money laundering network that dispersed proceeds of fraud schemes to conceal the source of the illegally obtained funds. Victims were led to believe that they were investing in legitimate ventures, only to be tricked by criminal networks, often operating overseas.
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“This seizure of $225.3 million in funds linked to cryptocurrency investment scams marks the largest cryptocurrency seizure in U.S. Secret Service history,” said Shawn Bradstreet, special agent in charge of the U.S. Secret Service’s San Francisco Field Office, in a statement.
Authorities revealed the network was connected to at least 400 victims worldwide, including dozens in the U.S. Crypto fraud was responsible for more than $5.8 billion in reported losses last year, according to FBI data.
“Today’s civil forfeiture complaint is the latest action taken by the Department to protect the American public from fraudsters specializing in cryptocurrency-based scams, and it will not be the last,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “These schemes harm American victims, costing them billions of dollars every year, and undermine faith in the cryptocurrency ecosystem. Our investigators and prosecutors are relentlessly pursuing these scammers and their ill-gotten gains, and we will relentlessly pursue recovery of victim funds.”
Meanwhile Jeanine Pirro, the U.S. attorney for the district of Columbia said, “Under my leadership, with the support of President Trump and Attorney General Bondi, the U.S. Attorney’s Office for the District of Columbia is taking a leading role in the fight against crypto-confidence scams, partnering with law enforcement throughout the country to seize and forfeit stolen funds and rip them from the hands of foreign criminals, all with the eye toward making victims whole.”
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The U.S. Secret Service and FBI used blockchain analysis and other tools to trace the cryptocurrency back to stolen assets. The DOJ credited Tether, the world’s largest stablecoin issuer, for assisting in the operation.
“Pig butchering” scams involve fraudsters building relationships with victims, and then defrauding them through sham investment opportunities. The name “pig butchering” comes from the idea that scammers must first “fatten up” the victims with flattery and fabricated bonds before “butchering,” or stealing their money.
The network made use of thousands of transactions in order to conceal the origin of the funds. They used sophisticated blockchain maneuvers to conceal the flow of stolen assets.
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