Federal law enforcement in North Carolina, in collaboration with blockchain intelligence firm TRM Labs, has seized more than $61 million in the stablecoin Tether (USDT) connected to a sophisticated 'pig butchering' investment fraud scheme. The action, disclosed by the U.S. Attorney’s Office for the Eastern District of North Carolina, marks one of the largest recoveries of stolen digital assets tied to this type of scam.
The investigation originated from a single victim report filed via the Homeland Security Investigations (HSI) tip line. HSI agents in Raleigh led the probe, supported by the agency's international operations team and TRM Labs' specialists. Despite the perpetrators' use of complex laundering tactics—including mixing services, cross-chain swaps, and layered transfers across multiple wallets and blockchains—investigators used graph analysis, behavioral clustering, and transaction-timing tools to trace the funds to consolidation points.
Pig butchering is a long-term social engineering scam where fraudsters build emotional trust with victims before steering them to counterfeit cryptocurrency trading platforms. These sites display fake profits to encourage larger deposits, after which victims are trapped with demands for fabricated fees. According to TRM Labs' latest Crypto Crime Report, such schemes siphoned roughly $35 billion into similar operations across public blockchains in 2025 alone.
The seized funds represent residual balances in commingled addresses holding victim proceeds. Tether, the issuer of USDT, cooperated fully in transferring the assets, enabling forfeiture proceedings aimed at eventual restitution to victims. This case follows another recent action where U.S. prosecutors, with FBI assistance, secured court approval to return $470,000 in seized USDT to victims of a separate investment scam reported in 2025.
These seizures underscore a growing trend of successful public-private partnerships in crypto crime enforcement. They demonstrate that despite criminals' adaptations, the transparent and immutable nature of blockchain ledgers creates a permanent record that law enforcement can exploit, especially when victims report quickly and agencies collaborate with blockchain analytics firms and asset issuers.
