Federal prosecutors in Massachusetts have initiated a civil forfeiture action to permanently seize approximately $3.4 million worth of the stablecoin Tether (USDT), which they allege are the proceeds of a cryptocurrency fraud and money laundering scheme. The U.S. Attorney's Office for the District of Massachusetts, alongside the FBI's Boston Field Office, announced the filing this week.
The investigation, which began in late 2024, identified at least four victims from Massachusetts, Utah, and South Carolina. According to court documents, the scheme followed a classic 'relationship-building' or 'pig-butchering' playbook. Scammers initially contacted victims through seemingly misdirected text messages or encrypted apps like WhatsApp and Telegram.
After establishing trust, the suspects persuaded victims to invest in what was falsely presented as an exclusive Ethereum (ETH) investment opportunity "backed by physical gold." Victims were instructed to purchase ETH and send it to intermediary wallets controlled by the scammers. The funds were then converted into USDT and moved into unhosted wallets in an attempt to conceal their origin.
The Department of Justice (DOJ) seized the crypto funds in February and March of 2025. The complaint alleges violations of federal wire fraud and money laundering statutes. This case is part of a broader trend of civil forfeiture actions targeting fraud-linked crypto, including recent cases involving romance scams and a record $14 billion action in October 2025 tied to a Cambodian scam network.
Authorities noted that while blockchain tracing tools enable faster asset recovery, perpetrator identification remains challenging when operators are based overseas. The case also follows Tether's own announcement in late 2025 of assisting global law enforcement, including Thai police and the U.S. Secret Service, in recovering $12 million in stolen USDT.
