Coinbase Aids US Secret Service in Recovering $225 Million in USDT Tied to Pig Butchering Scams
Coinbase partnered with the U.S. Secret Service to trace and reclaim $225 million in USDT associated with pig butchering scams, representing one of the largest crypto seizures in the agency’s history.
In a blog post from June 24, the exchange highlighted its involvement in a multi-agency investigation, analyzing on-chain fund flows and aiding in the identification of scam victims for restitution.
As mentioned by crypto.news, the Department of Justice launched a seizure action for the funds on June 18, following an extensive month-long investigation into fraud networks in Southeast Asia. Tether had initially frozen the assets in late 2023, blocking 39 wallet addresses tied to the stolen USDT.
A large portion of these wallets traced back to 140 accounts on OKX, linked to individuals reportedly trafficked into scam operations and forced to manage fraudulent investment platforms. These scams typically involve establishing fake romantic or business relationships with victims, ultimately coercing them into sending cryptocurrency.
Coinbase reported its participation in an “investigative sprint” with the Secret Service from February 26 to 29, 2024, collaborating with agents to track millions in crypto transactions from illicit wallets back to its platform.
This partnership allowed the Secret Service to identify over 130 Coinbase users who had unknowingly sent crypto to scam addresses, resulting in at least $2.3 million in losses.
The exchange noted that its provision of subpoena records and blockchain analysis was vital in identifying eligible victims. It has since issued guidance to help customers access and submit their transaction records to law enforcement.
The USDT that was initially frozen by Tether has now been burned and reissued, with the new tokens transferred to a wallet managed by the Secret Service.
In addition to Coinbase and OKX, other unnamed exchanges contributed to the investigation.
This operation marks one of the largest recoveries from crypto-related fraud on record and exemplifies how digital asset firms are aiding in tracing and recovering illicit funds.
As previously reported by crypto.news, in March, cryptocurrency exchange MEXC froze over 1,500 accounts tied to a market manipulation scheme impacting Vietnam and CIS countries.
Earlier this year, the T3 Financial Crime Unit—a collaboration that includes Tether, the blockchain network TRON, and analytics firm TRM Labs—announced the freezing of over $100 million in criminal assets associated with illicit USDT activities.