On Tuesday morning, the U.S. Department of Justice announced the seizure of nearly $9 million worth of Tether linked to “pig butchering” scams that exploited over 70 victims.
How the fraudsters did it
Originating in Southeast Asia, “pig butchering” is a practice conducted by perpetrators who prey on victims by exploiting their trust to increase the amount of funds a given victim will send to them.
According to a press release from the Justice Department, the scammers were able to swindle their victims by convincing them they were sending funds to legitimate exchanges and firms.
U.S. Secret Service agents were then able to determine that the fraudsters obfuscated the nature of the exploited funds by layering them across several cryptocurrency exchanges, a technique called “chain hopping.”
“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing.”
The largest stablecoin freeze in history
On Monday, Tether had to freeze $225 million of its stablecoins linked to an international human trafficking syndicate in Southeast Asia as part of an investigation by the Department of Justice.
According to the company’s press release, Tether’s was the largest-ever freeze of a stablecoin in history.
“Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”
Crackdown on crypto
The Department of Justice’s latest seizure of digital assets is just one of many regulatory advancements happening across the crypto industry.
Last week, The House Financial Services Subcommittee on Digital Assets, Financial Technology & Inclusion convened to discuss illicit activity in regards to cryptocurrency. The hearing comes just a little over a month after Hamas’ deadly terrorist attack on Israel that claimed the lives of over 1200 Israelis.
“It’s essential that we hold bad actors in the digital asset ecosystem accountable in order for legitimate players to thrive,” stated House Financial Services Committee Chairman Patrick McHenry.
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