DOJ files to seize $225 million in crypto from scammers

The Department of Justice reported yesterday that it filed a civilian ailment to prehend astir $225.3 cardinal successful cryptocurrency linked to crypto concern scams. In a property release, the DOJ said it traced and targeted accounts that were “part of a blase blockchain-based wealth laundering network” dispersing funds taken from much than 400 suspected victims of fraud.

The 75-page complaint filed successful the US District Court for the District of Columbia lays retired much item astir the seizure. According to it, the US Secret Service (USSS) and Federal Bureau of Investigation (FBI) tied scammers to 7 groups of Tether stablecoin tokens. The fraud fell nether what’s typically known arsenic “pig butchering:” a signifier of long-running assurance scam aimed astatine tricking victims — sometimes with a fake romanticist narration — into what they judge is simply a profitable crypto concern opportunity, past disappearing with the funds. Pig butchering rings often traffic the workers who straight pass with victims to Southeast Asian countries, thing the DOJ alleges this ringing did.

The DOJ says Tether and crypto speech OKX archetypal alerted instrumentality enforcement successful 2023 to a bid of accounts they believed were helping launder fraudulently obtained currency done a immense and analyzable web of transactions. The alleged victims see Shan Hanes (referred to successful this ailment arsenic S.H.), the erstwhile Heartland Tri-State Bank president who was sentenced to 24 years successful prison for embezzling tens of millions of dollars to put successful 1 of the best-known and most devastating pig butchering scams. The ailment lists a fig of different victims who mislaid thousands oregon millions of dollars they thought they were investing (and did not perpetrate crimes of their own). An FBI report cited by the property merchandise concluded wide crypto concern fraud caused $5.8 cardinal worthy of reported losses successful 2024.

Money recovered from this seizure volition beryllium enactment toward returning funds to the known victims of the scammers, the DOJ says. The fervently pro-crypto Trump medication has antecedently said forfeited wealth that isn’t sent to victims could beryllium utilized to money a US cryptocurrency reserve.