DOJ and U.S. Secret Service Seize $9 Million in Tether and Disrupts Pig Butchering Operation

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DOJ and U.S. Secret Service Seize $9 Million in Tether and Disrupts Pig Butchering Operation

On November 21, 2023, the U.S. Department of Justice (DOJ) announced the seizure of nearly $9 million worth of the stablecoin Tether (USDT). The seized funds were traced to cryptocurrency addresses allegedly associated with a Southeast Asia based organization that exploited over 70 victims through “pig butchering” scams. TRM is proud to have supported the United States Secret Service (USSS) in this investigation.

According to court documents, scammers encountered victims on dating sites, social media websites, and even through random text or WhatsApp messages masquerading as wrong numbers. Scammers initiated relationships with victims and slowly gained their trust, eventually introducing the idea of making a business investment using cryptocurrency. Victims were persuaded to invest money and once the money was sent to a fake investment platform, the scammers vanished with all the victim’s money. 

According to the investigator’s affidavit in support of the seizure warrant, one victim was induced to invest over $1.3 million after meeting a purported love interest on a dating website and was eventually scammed into sending funds to a fake cryptocurrency trading platform called “BC Group.” As shown in the TRM Labs graph below, the victim made 27 transfers to the fraudulent trading platform over an approximately three month period.

One victim sent 27 transactions from an account at a centralized VASP to the scammers' unhosted USDT address

Agents and analysts from the USSS were able to trace the victim deposits and observed that the funds were quickly laundered through 103 cryptocurrency addresses, exchanged for several different cryptocurrencies, and moved across multiple blockchains. According to the affidavit, “100 percent of [the victim’s] funds were received on the Ethereum blockchain, whereas 88% of the corresponding withdrawals were then sent on the TRON blockchain.”

USSS traced the victim funds from an account at a centralized exchange, across multiple hops, where funds were seized as part of “USDT Token Part A” seizure

“This seizure exemplifies the Secret Service’s mission to protect the financial infrastructure of the United States. We remain determined and vigilant to combat cyber-enabled financial fraud,” said Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office. “It is a priority for the Secret Service to protect the financial security that citizens work so hard to obtain. We want to thank the Justice Department for their partnership, dedication, and outstanding work on this case.”

This case was the result of public and private collaboration and coordination. Congratulations to the USSS San Francisco Field Office who investigated the case as well as the Department of Justice’s Criminal Division’s Computer Crime and Intellectual Property Section, National Cryptocurrency Enforcement Team, and the U.S. Attorneys Office for the Northern District of California. In addition, the DOJ, in its press release, thanked Tether for its support in the investigation.

According to the FBI, in 2022 $2.57 billion worth of cryptocurrency was lost as a result of investment fraud. According to TRM’s Illicit Crypto Ecosystem Report, in 2022 over $9 billion was lost as a result of scams and fraud. For more on the way the USSS has used blockchain intelligence to investigate pig butchering cases read TRM’s Insights here.

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