DOJ Seeks Forfeiture of $3.4M in USDT Tied to Ethereum Investment Scam

In brief

• U.S. prosecutors in Massachusetts have filed a civil forfeiture complaint targeting $3.4 million in USDT linked to an alleged investment scam.
• Investigators say victims were approached via “misdirected” texts and DMs, then led into a fake ETH investment “backed by physical gold.”
• This is the latest in a series of civil forfeiture actions involving crypto allegedly connected to fraud, including a record $14 billion case linked to a Cambodian scam network.

Federal prosecutors in Massachusetts have filed a civil forfeiture action seeking to recover approximately $3.4 million worth of the stablecoin USDT believed to be proceeds from a crypto fraud and money laundering scheme. According to a press release from the U.S. Attorney’s Office for the District of Massachusetts, the DOJ seized the crypto funds in February and March 2025, following an investigation that began in late 2024. The investigation identified at least four victims, including two residents of Massachusetts, as well as residents of Utah and South Carolina, the DOJ said. Prosecutors allege the scheme followed a familiar “relationship-building” playbook, where victims were first contacted through seemingly misdirected text messages or encrypted messaging apps like WhatsApp and Telegram.

Court filings allege the victims were persuaded to invest in what was presented as an exclusive Ethereum opportunity “backed by physical gold.” Instead, prosecutors say victims were directed to send ETH to intermediary wallets controlled by unknown individuals, after which the funds were converted into USDT and moved into unhosted wallets. The complaint alleges conduct consistent with federal wire fraud and money laundering statutes, including transactions designed to conceal the source, ownership, and control of criminal proceeds. This is the latest in a series of recent civil forfeiture actions involving allegedly fraud-linked crypto, including a March case seeking $327,000 in USDT tied to a romance scam, a January filing over $200,000 in USDT linked to an alleged Tinder pig-butchering scheme, and a record October 2025 action targeting roughly $14 billion in Bitcoin believed to be connected to a Cambodian scam network.