U.S. Attorney’s Office moves to recover $2.3M in crypto from fraud scheme

The United States Attorney’s Office in Massachusetts has launched a civil forfeiture action to recover $2.3 million in cryptocurrencies associated with a fraudulent scheme known as “pig butchering.”

This operation, which affected a Massachusetts resident along with 36 other individuals, involves scammers who establish online trust with their victims before coaxing them into investing in deceptive crypto ventures, ultimately leading to financial loss.

The term “pig butchering” refers to the methodical approach scammers use to ‘fatten’ their targets with trust before defrauding them. The cryptocurrencies targeted for recovery include nearly 300,000 USD Coin (USDC), 1.5 million Tether (USDT), 102,000 Tron (TRX), 3,000 Solana (SOL), and 14,000 Cardano (ADA), all seized from two Binance accounts in January. This seizure was the culmination of an investigation that began in spring 2023, focused on a scam that led the Massachusetts victim to wire $400,000 to the perpetrators. These funds were then moved to other wallets, which were traced to the funds of the additional 36 victims.

The civil forfeiture action is a legal process where law enforcement agencies seize assets believed to be connected to illegal activities. In this case, the assets are cryptocurrencies suspected to be the proceeds of online scams and fraud. This action represents part of a larger effort by U.S. authorities to address and mitigate the impacts of online financial fraud, particularly in the cryptocurrency sector.

Recently, the U.S. Attorney’s Office in Chicago seized $1.4 million in USDT from an unhosted virtual cryptocurrency wallet linked to a suspected tech support scam targeting elderly individuals. This reflects a growing trend of regulatory and legal interventions aimed at protecting consumers from fraudulent schemes in the digital financial marketplace.

Additionally, regulatory bodies such as the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network have issued alerts and taken actions against platforms and schemes employing similar deceptive practices. This includes a specific warning against the “pig butchering” scam, underscoring the seriousness with which U.S. regulatory and law enforcement agencies view the threat posed by such operations to investors and the integrity of the financial system.