Michaela
Crypto exchange Coinbase has announced that it played a key role in assisting the U.S. Secret Service (USSS) with its largest-ever crypto seizure, helping the agency recover $225 million in USDT linked to online investment fraud schemes known as “pig butchering.”
In a recent blog post, the crypto exchange detailed its support for the USSS investigation, which included tracking blockchain transactions and assisting in pinpointing scam victims who may qualify for compensation.
The U.S. Department of Justice (DOJ) filed a civil forfeiture action last week seeking to seize over $225 million in cryptocurrency recovered by the Secret Service, believed to be proceeds from widespread “pig butchering” investment scams.
A pig butchering scam is a type of long-term financial fraud in which scammers build fake relationships with victims, often through social media or messaging apps, to gain their trust before convincing them to invest in fraudulent cryptocurrency schemes.
In 2023, Tether, the company behind the USDT stablecoin, blocked access to 39 wallets holding $225 million in USDT linked to fraudulent activity. According to investigators, the USSS tracked those assets to over 140 OKX accounts, many connected to individuals who had been coerced into working in scam centers across Southeast Asia.
In February 2024, Coinbase collaborated with multiple exchanges and the USSS to trace on-chain transactions, identify victims of scams, and support the legal efforts to seize the illicit funds. “Sitting alongside USSS agents, Coinbase team members conducted a multi-day effort to trace millions in cryptocurrency transactions back from illicit wallets to the sends from our platform and analyze account activity to flag victims for USSS outreach,” Coinbase wrote.
Through detailed blockchain analysis and subpoenaed records, the USSS was able to identify over 130 Coinbase users who fell victim to fraud, suffering losses totaling $2.3 million. However, these affected customers represent only a small portion of the thousands impacted by the wider scam.
As part of the asset recovery process, Tether permanently removed the frozen $225 million in USDT from circulation through an on-chain burn. An equal amount of newly minted USDT was then issued and transferred to a wallet managed by the USSS, where the funds are being held pending redistribution to verified scam victims.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
