US Files Action to Recover $2.5 Million in USDT Lost to ‘Pig Butchering’ Scams

The US government reported  that a scammer located in Thailand was responsible for two accounts containing seized USDT. The Thai Royal Police supported the FBI in this forfeiture effort.

US Attorney Matthew M. Graves underlined his office’s determination to pursue criminal organizations, declaring :

“Our office will find and hold accountable criminal organizations — whether they operate within the United States or outside of if — that use fraudulent investment schemes like ‘pig butchering’ to defraud victims in the US. This forfeiture action demonstrates that scammers cannot hide their illegal activity by using cryptocurrency and engaging in complicated transactions: we will find them, seize their illegal proceeds, and get money back to the victims.”

FBI Special Agent in Charge Stacey Moy criticized the rising exploitation of sophisticated scams, underscoring the FBI’s proactive efforts to dismantle such criminal networks. “The rate at which bad actors employ elaborate pig-butchering scams to defraud innocent people is reprehensible,” Moy stated.

The forfeiture case , led by Assistant US Attorney Rick Blaylock, Jr., aims to penalize and deter criminal activity by stripping criminals of their illicitly acquired assets. It also strives to retrieve and return assets to victims as permitted by federal law.

Ultimately, the proceeds from pig butchering scams often consist of Tether , a digital asset that operates outside the traditional banking system and has maintained a value close to $1 for nearly a decade. This stability allows scammers to easily manage and value their illicit gains in a USD-equivalent form.

In 2022, the proceeds from pig butchering scams surpassed $2 billion. Bloomberg journalist Zeke Faux  documented this alarming trend in his book, which includes detailed on-the-ground reporting from pig butchering operations across Asia.

Complex USDT Money Laundering Scheme

In addition to numerous transfers through on-blockchain wallets and mixers, the US Attorney illustrated  how “a succession of USDT transactions occurred through multiple layers of Binance accounts—a pattern indicative of money laundering and efforts to obscure the origin of funds.”

The civil forfeiture documentation highlighted that these off-blockchain transfers of USDT within Binance’s system “are not recorded on the public blockchain, which complicates the tracking process.”

This layering tactic significantly hinders investigators’ ability to trace funds, not only to identify the final cash-out point but also to ascertain the original source of the funds from other victims.