Authorities have frozen nearly $47 million in USDT after investigators traced victim deposits to cryptocurrency scam wallets operating out of Southeast Asia. According to the official report, Chainalysis’ blockchain tracing tools were used to track funds from victims across dozens of addresses, revealing transfers made between November 2022 and July 2023 to “pig butchering” wallets controlled by scammers.
In some cases, victims sent multiple transfers within a single month, while others continued sending funds for up to seven months to the same fraudulent addresses.
The stolen funds, totaling approximately $46.9 million in USDT, were initially consolidated in a single wallet before being dispersed across five wallets. To maintain credibility, scammers returned small amounts—about $63,900 in one case—making the fake investments appear legitimate.
After mapping the scam network, Chainalysis shared intelligence with cryptocurrency exchanges and regional authorities. Acting on this information, stablecoin issuer Tether froze the funds in June 2024, with Binance and OKX assisting in confirming the links between the wallets and the scam activity.
This action follows a similar case in the U.S. in late 2023, when Tether and OKX assisted the Department of Justice in freezing $225 million in USDT linked to human trafficking and romance scams. The seizure became one of the largest cryptocurrency-related cases in the agency’s history, with the funds eventually recovered a few months later to provide restitution for victims.
What are pig butchering scams?
Pig butchering scams—also known as “romance” or “investment” scams—involve criminals cultivating long-term relationships with victims, often through dating apps or unsolicited messages. Once trust is established, victims are persuaded to invest in fake opportunities, including fraudulent cryptocurrency schemes, before the scammers disappear with the funds.
Illicit proceeds are typically laundered through multiple channels before being cashed out. The term “pig butchering” comes from the way scammers “fatten up” their victims with trust before “slaughtering” them financially.
Originally targeting victims in Asia, these scams have now spread globally, causing losses of billions of dollars each year. In 2024 alone, pig butchering scams drained $3.6 billion from the crypto industry, making them one of its largest ongoing threats.
The need for stronger crypto security
Beyond pig butchering, the cryptocurrency sector faces a wide range of threats from malicious actors. So far this year, losses from scams and hacks have already exceeded $3.1 billion. Despite recoveries and crackdowns, the persistent wave of attacks—and the adaptability of scammers—underscores the need for robust security measures.
Educating users, enhancing industry-wide security practices, and fostering collaboration between exchanges and law enforcement are essential to reducing risk and creating a safer cryptocurrency ecosystem.
