In a landmark enforcement action, cryptocurrency exchange Coinbase played a pivotal role in helping the U.S. Secret Service, FBI, and Department of Justice confiscate $225 million in Tether (USDT) linked to a sophisticated "pig butchering" scam—a romance-based fraud that has surged globally in recent years. This operation, stretching back to 2023, now stands as the largest crypto asset seizure in the Secret Service’s history.
Background: Tether Freeze and Blockchain Forensics
The investigation began in late 2023 when Tether, in collaboration with law enforcement, froze $225 million USDT across 39 self-custody wallets. These funds were directly connected to a criminal syndicate orchestrating cross-border romance scams—dubbed "pig butchering"—that frequently target victims via social media and dating platforms. According to Chainalysis, this type of fraud has seen a significant uptick among cybercriminals in 2024, fueling record numbers of crypto scam cases.
Coinbase’s Analytics and Victim Restitution Efforts
Coinbase disclosed that its compliance and investigations team worked around the clock to trace the movement of stolen USDT, mapping illicit transactions and linking them to user wallets on the platform. The exchange also assisted authorities in identifying potential victims eligible for restitution, underscoring the value of blockchain analytics in tracking illicit digital assets.
“The Coinbase team spent several days tracking millions of dollars in cryptocurrency moving from illegal wallets, analyzing account activity, and highlighting victim addresses,” the company stated.
Tether’s leadership emphasized that the case sets a new benchmark for compliance, transparency, and law enforcement cooperation in the digital asset space. To date, over $2.7 billion in USDT linked to illegal activities has been frozen globally.
Authorities Urge Victims to Come Forward
US Secret Service special agent Shawn Bradstreet described the operation as “the largest cryptocurrency seizure in the service’s history,” reflecting an intensifying global crackdown on crypto-driven financial crime. Coinbase added that individuals who believe they are victims of this pig butchering scheme can submit claims via the FBI’s Internet Crime Complaint Center (IC3) for potential restitution.
This comes just weeks after Coinbase reported a separate user data breach with potential damages approaching $400 million, highlighting ongoing risks within the digital asset industry.