Feds Seize Nearly $9 Million In Cryptocurrency Linked To Romance Scams Amid Human Trafficking Investigation

6 views 6:56 pm 0 Comments November 21, 2023

Topline

The Justice Department seized nearly $9 million worth of Tether tokens linked to an organization that exploited victims through romance scams, according to an announcement Tuesday, after Tether froze about $225 million in tokens earlier this month amid an investigation into an international human trafficking syndicate.

Key Facts

The organization—which was not named—exploited more than 70 victims through “pig butchering” scams on fake cryptocurrency trading platforms, the Justice Department said Tuesday.

“Pig butchering” scams involve scammers using fake romantic or personal relationships with their victims—referred to as “pigs”—to exploit victims into sending them money they then claim to invest but fabricate investment gains before taking the cash and vanishing, according to the Financial Crimes Enforcement Network.

The Secret Service traced the victims’ deposits and found they were “quickly laundered” through dozens of cryptocurrency addresses and other tokens, a process known as “chain hopping,” the Justice Department said.

Tether did not provide an immediate response to a request for comment from Forbes.

Key Background

Tether Holdings said earlier this week that the cryptocurrency firm was cooperating with a “monthslong” Justice Department investigation into funds used by an international human trafficking syndicate in Southeast Asia linked to a “global ‘pig butchering’ romance scam.” The Secret Service requested Tether freeze about $225 million worth of its tokens, though it is not immediately clear whether those tokens are tied to the seized funds. The Financial Crimes Enforcement Network (FinCEN) issued an alert earlier this year regarding “pig butchering” scams, highlighting that U.S. victims have suffered losses in the billions of dollars due to these fraudulent schemes. Criminal organizations in Southeast Asia primarily use the cons, the agency said, who use “victims of labor trafficking to conduct outreach to millions of unsuspecting individuals around the world.”