TL;DR
- Coinbase teamed up with the U.S. Secret Service in a rapid “investigative sprint,” freezing 39 wallets and recovering $225 million in stolen USDT, the largest crypto seizure in Secret Service history.
- The operation unraveled a “pig butchering” romance scam network, where fraudsters lured victims into fake crypto schemes and drained their life savings.
- After Tether burned the seized tokens and reminted an equivalent amount, authorities are coordinating with the FBI to return funds to verified victims.
On June 24, Coinbase, the crypto exchange, revealed its hand in the largest-ever cryptocurrency seizure handled by the U.S. Secret Service. By weaving together on-chain analytics and strategic collaboration, Coinbase helped recover $225 million in USDT stolen by an insidious fraud network. Here’s how it unfolded.
The unprecedented haul: $225M in stolen crypto
First reached late last year, law enforcement froze 39 wallet addresses holding roughly $225 million in Tether’s USDT stablecoin. Referred to as the largest cryptocurrency seizure by the Secret Service to date, this action marks a significant achievement in the battle against digital asset crime.
In mid-June, authorities officially submitted civil forfeiture documents to take back all tokens from scammers who depleted life savings. This takeover underscores the growing sophistication of financial cybercrime and the critical role exchanges play in preserving market integrity.
Decoding “pig butchering” scams
At the heart of this case lies the so-called pig butchering scheme, a long-con con where fraudsters cultivate fake romantic or business ties online. Victims, often cold-called or lured via social media, are coaxed into sinking savings into phony crypto opportunities.
Over time, small fabricated returns build trust, prompting larger transfers that vanish once scammers have “slaughtered” their targets for every last dollar. This emotional manipulation makes pig butchering one of the fastest-growing crypto frauds worldwide.
Inside the investigative sprint
Between February 26 and 29, 2024, Coinbase analysts joined a multi-day “investigative sprint” alongside Secret Service agents. Armed with proprietary blockchain tools and subpoenaed account records, they traced illicit transfers back to their origin wallets and flagged suspicious activity.
Together, they pinpointed over 130 Coinbase users who collectively lost $2.3 million, just a fraction of the thousands defrauded across multiple exchanges. Their deep dive into transaction metadata also revealed cross-border laundering routes, helping map out networks operating from Southeast Asia to Europe and beyond.
Following Tether’s on-chain “burn” of the seized tokens, an equal amount of fresh USDT was minted and placed in a Secret Service-controlled wallet. Now, authorities are coordinating with the FBI Internet Crime Complaint Center to return funds to verified victims.
