The Massachusetts branch of the United States Attorney’s Office has taken legal action to recover cryptocurrency associated with a fraudulent operation known as the “pig butchering” scheme, which targeted a resident of Massachusetts and 36 others. On March 13, the U.S. Attorney’s Office filed a civil forfeiture action with the aim of returning $2.3 million worth of various cryptocurrencies, including USD Coin (USDC), Tether (USDT), Ether (ETH), and Solana’s SOL, to the victims of online scams and fraud.
A civil forfeiture action is a legal process in which law enforcement agencies seize assets, such as property or funds, that they suspect are involved in illegal activity. In this case, the assets themselves are considered the defendant in the legal proceedings, rather than any specific individual.
The cryptocurrencies, which consist of nearly 300,000 USDC, 1.5 million USDT, 102,000 Tron (TRX), 3,000 SOL, and 14,000 Cardano (ADA), were confiscated from two Binance accounts in January following an investigation into a “pig butchering” scam that targeted a resident of Massachusetts. “Pig butchering” is a technique used by scammers to gain the trust of their victims online and convince them to invest in a cryptocurrency scheme before defrauding them. U.S. regulators have warned investors about this technique and have taken legal action against some perpetrators.
The authorities began investigating the scheme in the spring of 2023 and discovered that cryptocurrency had been seized from funds connected to 37 victims, including the individual from Massachusetts.
According to the statement, the victim of the scam was tricked into transferring $400,000 to the scammers, who then moved the funds to other wallets that investigators were able to trace back to funds from the other 36 victims.
This action by the United States Attorney’s Office closely follows the recent news that the Chicago branch of the U.S. Attorney’s Office had seized $1.4 million in USDT from an unhosted virtual cryptocurrency wallet associated with a suspected tech support scam targeting elderly individuals. Tether willingly cooperated in the process of recovering the assets, destroying the funds linked to the accused fraudsters and transferring them to alternative wallets under government supervision for restitution to the victims.
In January, the Commodity Futures Trading Commission issued warnings and charged digital asset platform Debiex with fraud for allegedly using the “pig butchering” technique to defraud investors of $2.3 million. The Financial Crimes Enforcement Network also issued a warning to investors when it released a “pig butchering” alert late last year.