U.S. Seizes $61 Million USDT, "Pig Butchering" Scam Money Laundering Chain Crumbles

The U.S. Eastern District of North Carolina Office of the Federal Prosecutor announced on February 24 that federal agents had seized over $61 million worth of Tether (USDT). Asset tracing revealed that these cryptocurrency addresses are directly linked to money laundering activities involved in “Pig Butchering” investment scams. The investigation was led by the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Raleigh, North Carolina, with assistance from Tether in completing the asset transfer process.

Operation and Money Laundering Process of Pig Butchering Scams

(Source: U.S. Department of Justice)

Pig Butchering scams are currently one of the largest types of cryptocurrency fraud worldwide, combining emotional manipulation with fake investment platforms. According to court documents, the full scam process can be divided into the following stages:

Five Steps of the Scam

Step 1: Building Trust: Criminals pose as romantic partners or friends, cultivating long-term trust with victims, then gradually introduce cryptocurrency investment topics.

Step 2: Pretending to be Experts: Claiming to possess unique skills to earn high returns through cryptocurrency trading, they誘導 victims to believe in the legitimacy of the investment opportunity.

Step 3: Leading to Fake Platforms: Directing victims to fake platforms that closely resemble legitimate exchanges in name and appearance, showcasing fictitious high-yield investment portfolios.

Step 4: Hindering Withdrawals: When victims attempt to withdraw funds, they are refused on the grounds of needing to pay “taxes” or “fees,” while scammers continue to extract more money.

Step 5: Rapid Money Laundering: Once victim funds are transferred into scam-controlled wallets, they are quickly layered and moved across multiple addresses to obscure the source and control of the funds.

Investigation Details: How HSI Tracks USDT On-Chain Money Laundering

The investigation began when HSI received a complaint via hotline from a North Carolina victim claiming to have fallen for a cryptocurrency scam. HSI agents and analysts conducted on-chain tracking, following the flow of the victim’s funds to identify multiple crypto wallets used for scam and money laundering activities.

The investigation revealed that some wallets still held large amounts of victim funds that had not yet been transferred out. Law enforcement agencies seized and confiscated these addresses. Kyle D. Burns, acting supervisor of the Charlotte HSI field office, stated: “HSI agents are relentless in tracking down criminal proceeds worldwide, aiming to dismantle transnational organizations that deceive American citizens.”

Tether’s Role in Law Enforcement Cooperation and Industry Significance

Another noteworthy aspect of this case is Tether’s proactive cooperation during law enforcement actions. The U.S. Department of Justice explicitly thanked Tether in its statement for assisting with asset transfers, demonstrating that major stablecoin issuers are increasingly strengthening their collaboration with global law enforcement agencies.

In recent years, Tether has repeatedly helped authorities freeze or recover USDT involved in scams and money laundering. This is seen by the industry as a strategic move by stablecoin issuers toward regulatory compliance, as well as a response to ongoing pressure from major jurisdictions.

Frequently Asked Questions

Why do Pig Butchering scams prefer to use USDT for money laundering?

USDT, as the most widely circulated stablecoin, offers high liquidity, fast cross-border transfers, and low transaction friction, making it the preferred tool for scammers to quickly layer and transfer funds. Additionally, USDT can circulate across multiple blockchain networks, further complicating law enforcement tracking efforts.

How does Tether assist law enforcement in recovering USDT?

Tether has the technical capability to freeze or burn USDT balances at specific addresses. Upon receiving a legitimate request from law enforcement, Tether can execute a freeze on involved addresses, preventing further transfer of funds. In this case, Tether’s assistance expedited the asset transfer process, enabling the seizure operation to proceed smoothly.

Can victims recover the stolen USDT?

After seizure, the funds enter an asset forfeiture process. According to the U.S. Department of Justice’s asset distribution procedures, some funds may eventually be used to compensate victims. However, whether victims can recover their funds and the proportion recovered depend on the progress and outcomes of subsequent legal proceedings. No official statement has been issued yet.