US DOJ Seizes $9M in Tether Linked to Romance Scam Operation

Tether, estimated to be worth around $9 million, was confiscated by the United States Department of Justice after the stablecoin issuer froze funds associated with a criminal organization liable for romance scams.

The seized funds presumably belonged to “scammers who stole millions from victims across the United States” and were part of Tether’s efforts to sequester $225 million worth of USDT in “external self-custodied wallets” associated with the scam, according to a Justice Department announcement on November 21.

The funds were purportedly associated with an organization that was accountable for “pig butchering” romantic scams—a type of fraudulent activity wherein malicious actors convince unsuspecting individuals to invest in reputable businesses before attempting to establish an online relationship with them.

“By creating websites that deceive ordinary investors into believing their investments are profitable, these con artists prey on them,” stated Nicole Argentieri, acting assistant attorney general.

“The reality is that these international criminals are merely stealing cryptocurrency and leaving victims with nothing.

Law enforcement will continue to develop the expertise necessary to track the money and seize it back for victims, even though the current state of the cryptocurrency ecosystem may appear to be an ideal place to launder ill-gotten gains.”

According to the Justice Department, U.S. Secret Service-affiliated analysts traced the money laundered in question to cryptocurrency. The laundering process involved traversing multiple wallet addresses and exchanges, a technique referred to as “chain hopping.”

Additionally, the U.S. government recognized Tether’s contribution “for its assistance in facilitating the transfer of these assets.”

In the past, U.S. authorities have exercised their jurisdiction to seize unlawful funds associated with cryptocurrency-related schemes and offenses, as was the case in 2020 when they seized approximately 70,000 bitcoins associated with Silk Road.

Based on its analysis of seizures, the cryptocurrency firm 21.co reported in October that the United States government held over $5 billion worth of cryptocurrencies.

The Justice Department announced its intention to unveil “significant cryptocurrency enforcement actions” on November 21, in collaboration with the Commodity Futures Trading Commission and the U.S. Treasury.