124/68 Monday, March 31, 2025
The U.S. Department of Justice (DOJ) and the FBI have seized $8.2 million in USDT connected to a romance baiting scam, also known as a pig butchering scheme. This form of fraud involves building fake romantic relationships through dating apps or social media to trick victims into transferring funds into fraudulent investment platforms that promise unrealistically high returns. In one case, a victim in Cleveland was scammed into transferring more than $650,000 in retirement funds to such a platform.
According to TRM Labs, the FBI used blockchain intelligence tools to trace the flow of stolen funds through complex layers involving centralized exchanges, the Ethereum and TRON networks, DeFi protocols, and multiple cryptocurrency wallets. Investigators identified repeated transaction patterns and money laundering behaviors that led to the asset seizure. Notably, Tether froze the stolen USDT in mid-2024, later burned the tokens, and reissued them to law enforcement in November, enabling restitution efforts for victims.
Authorities pursued the case under dual legal frameworks—wire fraud and money laundering statutes—to maximize the chances of returning the stolen funds to both known and unidentified victims. TRM Labs also highlighted that pig butchering scams are rapidly expanding and often tied to human trafficking operations in Southeast Asia, where forced labor in scam compounds across Cambodia and Myanmar is used to defraud victims globally through crypto-based channels that bypass traditional financial systems.
