U.S. Justice Department Seizes $9M in Crypto from Romance Scam Ring

On November 21, 2023, the U.S. Justice Department announced a significant disruption in cybercrime activities, seizing nearly $9 million in Tether (USDT) from an international scam organization. This organization was involved in executing romance scams and cryptocurrency confidence scams, infamously known as “pig butchering.”

The scam network targeted over 70 victims across the United States, luring them with fake investment opportunities through non-existent trading platforms. Acting Assistant Attorney General Nicole M. Argentieri stated that this operation aimed at deceiving ordinary investors, leaving them with substantial financial losses. The U.S. Secret Service's thorough analysis and tracing of cryptocurrency transactions were instrumental in identifying and seizing the fraudulent funds. These funds were quickly laundered through multiple cryptocurrency addresses and exchanged across various digital currencies, a tactic known as “chain hopping.”

The successful seizure is a result of the collaborative efforts between the Justice Department and the U.S. Secret Service. U.S. Attorney Ismail J. Ramsey emphasized the department’s commitment to justice for fraud victims, particularly in prominent cryptocurrency hubs like Silicon Valley. Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office reaffirmed the agency's dedication to protecting the financial security of U.S. citizens.

The USSS San Francisco Field Office led the investigation, with Trial Attorney Georgiana MacDonald and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips managing the case and related forfeiture actions. Additionally, Tether’s cooperation in transferring the seized assets was acknowledged by the department.

Victims of cryptocurrency scams are encouraged to report incidents to the FBI’s Internet Crime Complaint Center (IC3) and the Federal Trade Commission’s (FTC) Consumer Sentinel Network.

This seizure is part of a broader effort by U.S. authorities to combat cryptocurrency-related fraud and crime. The U.S. government has previously demonstrated its capability to recover illegal funds in similar scenarios, such as the seizure of about 70,000 Bitcoins connected to the Silk Road in 2020. An October report by 21.co indicated that the U.S. government holds over $5 billion in seized cryptocurrency assets.

The Justice Department's recent seizure of $9 million in Tether underscores the U.S. government’s ongoing commitment to combating cyber-enabled financial fraud and protecting investors. This case serves as a cautionary tale about the risks associated with cryptocurrency investments and the importance of vigilance in the digital finance landscape.

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