Blockchain tracing tied hundreds of wallets to victims of fake crypto investment platforms and romance scams.
The U.S. government is stepping up its crackdown on large-scale crypto fraud.
The Department of Justice (DOJ) has launched a civil forfeiture case to seize 127,271 Bitcoin valued at around $12 billion. The assets are allegedly tied to an international “Pig Butchering” operation led by Chinese national Chen Zhi.
Officials say it’s one of the largest digital asset seizures ever initiated by the U.S. government. The case, filed in the Eastern District of New York, signals intensifying global pressure on crypto-linked fraud networks.
According to documents shared in the “SYNOPTIC” filing, the DOJ aims to recover Bitcoin traced to wallets used in the long-running scam.
The assets were reportedly linked through blockchain analysis and exchange records. Sources said the funds were laundered through multiple wallets and exchanges to obscure their origin before U.S. investigators froze them.
Crypto analyst @martypartymusic highlighted the development on X, noting that the forfeiture, if successful, would add 127,271 BTC to U.S. government holdings. At current prices, that would bring federal Bitcoin reserves close to record levels, surpassing many corporate treasuries.
Law enforcement officials described the scam as part of a transnational network exploiting U.S. residents through social engineering and fake investment platforms. The case adds to a series of DOJ actions targeting digital asset crimes over the past two years.
The Justice Department said the forfeiture process will move forward in coordination with international partners to ensure that all linked assets are secured. Authorities are expected to pursue further investigations into the individuals and entities behind the operation.
“Pig Butchering,” or Sha Zhu Pan, refers to scams where fraudsters groom victims online for weeks or months.
Scammers pose as romantic partners or business contacts, slowly building trust before introducing fake crypto investment opportunities. Victims are “fattened up” through false returns, then left with empty wallets once they commit larger sums.
The scheme has surged across Asia and the U.S., using messaging apps and social media to find targets.
Analysts say billions have been lost to such scams, many of which route funds through unregulated offshore exchanges. Blockchain tracking firms estimate losses from these schemes have exceeded $75 billion worldwide.
In this case, investigators said the seized Bitcoin originated from hundreds of wallets used to collect victims’ deposits. By tracing the funds through multiple chains and exchanges, they identified the source as part of Chen Zhi’s network.
Federal agents then filed to seize the related digital assets before they could be liquidated or moved further.
The DOJ has yet to confirm when the forfeiture hearing will take place, but analysts say the case could reshape how authorities pursue cross-border crypto crime. It also raises questions about how the U.S. will handle the potential addition of $12 billion in Bitcoin to its reserves.
