The U.S. Secret Service, in collaboration with Coinbase and other law enforcement agencies, has seized $225 million worth of Tether (USDT) stablecoins linked to a sophisticated global crypto fraud operation. This operation involved "pig butchering" scams—a type of romance fraud that lures victims into fake relationships and fraudulent financial schemes.
Coinbase utilized blockchain analytics to trace illicit funds flowing through transactions on its platform and helped identify victims eligible for restitution. The seized assets had initially been frozen by Tether in December 2023 after their suspicious links to a human trafficking syndicate were flagged. This seizure represents the largest crypto confiscation in the history of the Secret Service.
The effort highlights growing cooperation between crypto exchanges and federal agencies such as the FBI and U.S. Attorney’s Office to tackle criminal misuse of digital assets. More than 400 people are believed to be victimized by scam platforms involved in the fraud, which caused millions in losses. The Department of Justice intends to return the seized funds to victims, though no timeline has been specified.
The case emphasizes the increasing regulatory focus on stablecoins due to their use in illicit activities and showcases enhanced accountability and law enforcement collaboration within the cryptocurrency ecosystem. Both Coinbase and Tether underscored their commitment to compliance and ongoing monitoring efforts to mitigate criminal use of crypto.