Finance

US attorney seeks to reclaim $2.3M crypto from ‘pig butchering’ scheme

The United States Attorney’s Office in Massachusetts has initiated legal proceedings to reclaim cryptocurrency linked to a scheme dubbed the “pig butchering” operation, which victimized a Massachusetts resident and 36 others.

The U.S. Attorney’s Office filed a civil forfeiture action on March 13 aimed at returning $2.3 million in a variety of cryptocurrencies, including USD Coin (USDC), Tether (USDT), Ether (ETH) and Solana (SOL), to the victims of online scams and fraud.

A civil forfeiture action is a legal process through which law enforcement agencies seize assets, such as property or funds, that they suspect are involved in illegal activity. In these cases, the assets are considered the defendant in the legal proceedings rather than any person.

Screenshot of a post about U.S. Attorney’s office civil forfeiture action. Source: U.S. Attorney Massachusetts on X.

The cryptocurrencies — which include nearly 300,000 USDC, 1.5 million USDT, 102,000 Tron (TRX), 3,000 SOL, and 14,000 Cardano (ADA) — were seized from two Binance accounts in January following an investigation last spring into a “pig butchering” scam targeting a Massachusetts resident.

Pig butchering is a technique in which scammers establish trust online and get the victim to invest in a crypto scheme before the victim realizes they have been defrauded. Regulators in the U.S. have warned investors of the technique and have brought charges against some bad actors.

Authorities initiated an inquiry into the scheme in the spring of 2023 and disclosed that cryptocurrency had been confiscated from funds connected to 37 victims, including the individual from Massachusetts.

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According to the statement, the scam victim was tricked into wiring $400,000 to the scammers, who transferred the funds to other wallets that investigators then connected to funds from the other 36 victims.

The United States Attorney’s Office’s action closely follows last week’s news that the U.S. Attorney’s Office in Chicago had seized $1.4 million in Tether from an unhosted virtual cryptocurrency wallet tied to a suspected tech support scam targeting the elderly.

Tether cooperated willingly in the asset recovery process, destroying the funds linked to the accused fraudsters and reallocating 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 pig butchering to take $2.3 million from investors. The Financial Crimes Enforcement Network also warned investors when it issued a pig butchering alert late last year.