On Wednesday, U.S. federal authorities announced the seizure of $225.3 million worth of Tether’s USDT stablecoin—the largest crypto forfeiture to date tied to so-called “pig butchering” scams. According to the U.S. Department of Justice (DOJ), the funds were linked to a massive network of confidence scams. Following an extensive investigation, officials discovered that the stolen crypto had been laundered through the OKX exchange after being defrauded from unsuspecting investors.
The DOJ said all the seized funds were in USDT, the stablecoin issued by crypto company Tether and currently the third-largest digital asset by market capitalization.
Tether had initially revealed the existence of an investigation back in 2023, stating at the time that the illicit use of its token appeared connected to human trafficking.
In a statement released Wednesday, the DOJ explained: “The complaint alleges that the cryptocurrency addresses that held the over $225.3 million in cryptocurrency were part of a sophisticated blockchain-based money laundering network that executed hundreds of thousands of transactions, and was used to conceal the nature, source, control, and ownership of proceeds derived from cryptocurrency investment fraud.”
The DOJ further noted, “The scam operators dispersed proceeds across an extensive group of cryptocurrency addresses and accounts on the blockchain to conceal the source of the illicitly obtained funds.”
The DOJ complaint was announced the same day that officials in New York said they had seized $140,000 and frozen another $300,000 tied to a cryptocurrency investment scam using fake ads on social media platforms. The scheme caused more than $1 million in losses, with more than 300 victims identified.
Tether CEO Paolo Ardoino emphasized the company’s commitment to regulatory collaboration, stating: “We are setting the standard for compliance in digital assets, and leading efforts to ensure stablecoins are not misused by bad actors.”
According to court documents, Tether, alongside OKX, alerted the U.S. Secret Service in 2023 after identifying over 144 accounts on the exchange connected to these elaborate fraud schemes, commonly referred to as “pig butchering.”
These scams, which have their roots in China, involve scammers gaining a victim’s trust—often through fake social media profiles and emotional manipulation—before convincing them to invest in fraudulent crypto schemes. The name comes from the idea of “fattening” the victim before taking their funds.
Authorities traced the 144 flagged accounts to IP addresses in the Philippines. Collectively, they were responsible for moving over $3 billion in cryptocurrency within a year, which federal agents described as “high-volume money laundering,” according to court filings.
During a press conference discussing the civil forfeiture case, Pirro sidestepped questions on whether the Justice Department would adopt a similar approach to scrutinizing US President Donald Trump’s connections to the crypto industry. She cited the recent passage of the GENIUS Act, a bill to regulate stablecoins, in the US Senate, but said the DOJ would be focused on “people who are being scammed out of their life savings.”
USDT, a dollar-pegged stablecoin, plays a critical role in the crypto ecosystem, enabling traders to move in and out of positions with ease. As one of the most widely used digital assets, it functions as a foundational pillar of the crypto economy.
Tether, now headquartered in El Salvador, has long cooperated with law enforcement. The company said it has frozen $2.7 billion in USDT tied to criminal activity to date.
