The United States Department of Justice announced it had seized roughly $9 million worth of USDT (USDT) following Tether freezing funds connected to a criminal organization responsible for romance scams.
In a Nov. 21 announcement, the Justice Department said the seized funds came from “scammers who stole millions from victims across the United States” and were presumably part of Tether’s efforts to freeze $225 million worth of USDT in “external self-custodied wallets” connected to the scam. The funds were allegedly tied to an organization responsible for “pig butchering” romance scams, in which bad actors attempt to develop an online relationship with unsuspecting individuals, often convincing them to invest in legitimate businesses before conning them.
“These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money,” said Acting Assistant Attorney General Nicole Argentieri. “The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing. [...] Although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”
Cyber Scam Organization Disrupted Through Seizure of Nearly $9M in Cryptohttps://t.co/RRBZk0twNe pic.twitter.com/kVP8f2ogBo
— Criminal Division (@DOJCrimDiv) November 21, 2023
According to the Justice Department, analysts with the U.S. Secret Service traced the crypto, which had been laundered through different wallet addresses and exchanges — a practice called “chain hopping.” The U.S. government also acknowledged Tether’s contribution “for its assistance in effectuating the transfer of these assets.”
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U.S. officials have previously used their authority to seize illicit funds tied to crypto-related scams and crimes, such as when it took control of roughly 70,000 Bitcoin (BTC) linked to Silk Road in 2020. Crypto firm 21.co reported in October that the U.S. government held more than $5 billion in crypto, according to its analysis of seizures.
On Nov. 21, the Justice Department said it planned to announce “significant cryptocurrency enforcement actions” in coordination with the U.S. Treasury and Commodity Futures Trading Commission. Many speculated that the announcement referred to a reported $4-billion settlement with Binance, in which Changpeng Zhao reportedly plans to step down.
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