Tether (USDT) Freezes $49.6 Million in Scammers’ Crypto with Help from Binance, OKX, and Chainalysis (2025 Update)

• How Did Tether Freeze $49.6 Million in USDT?
• What Is a "Pig Butchering" Scam?
• Who Was Involved in the Investigation?
• Are "Pig Butchering" Scams on the Rise?
• How Does This Impact Crypto Regulation?
• What’s Next for the Frozen Funds?
• FAQs

In a major crackdown on crypto fraud, Tether (USDT) has frozen $49.6 million linked to a Southeast Asian "pig butchering" scam, thanks to collaboration with Binance, OKX, and blockchain analytics firm Chainalysis. The operation, directed by regional authorities in the Asia-Pacific (APAC), highlights the growing role of public-private partnerships in combating crypto crime. This article dives into the mechanics of the scam, the investigative process, and what experts say about the rising tide of crypto-related fraud.

How Did Tether Freeze $49.6 Million in USDT?

In June 2024, Tether (USDT) froze $49.6 million in stolen funds tied to a sophisticated "pig butchering" scam. The operation was initiated after preliminary investigations by APAC regional authorities, with critical support from Binance, OKX, and Chainalysis. According to Chainalysis' blog, their cryptocurrency investigation tools traced the funds through intermediary wallets, where scammers consolidated victims' money before attempting to cash out. The scam involved dozens of transactions between November 2022 and July 2023, with small amounts occasionally returned to victims to maintain the illusion of legitimacy.

What Is a "Pig Butchering" Scam?

Dubbed "pig butchering" (a literal translation from Chinese), this scam involves criminals "fattening up" victims through casual or romantic contact before luring them into fake investments. Once trust is built, the scammers vanish with the funds. While investment and romance scams predate crypto, blockchain technology has enabled both the fraud and the countermeasures. In 2024 alone, crypto investment scams have resulted in over $5.8 billion in losses, per the FBI's Internet Crime Complaint Center.

Who Was Involved in the Investigation?

Erin Fracolli, Binance's Global Head of Intelligence and Investigations, emphasized the importance of public-private collaboration: "Working with organizations like Tether and OKX is key to disrupting criminal operations and compensating victims." An OKX senior blockchain investigator added, "Victims aren’t gullible—they’re exploited. Scammers excel at finding vulnerabilities." Paolo Ardoino, CEO of Tether, noted that unlike Bitcoin or Ethereum, USDT has the technical capability to freeze illicit funds, a feature Leveraged in this case.

Are "Pig Butchering" Scams on the Rise?

Absolutely. In November 2023, the U.S. Department of Justice (DoJ), with Tether and OKX, froze a record $225.3 million in USDT tied to a Southeast Asian human trafficking ring running romance scams. Over 400 global victims were identified, including dozens in the U.S. The trend underscores the need for vigilance—especially as scammers refine their tactics.

How Does This Impact Crypto Regulation?

This case highlights the crypto industry's evolving role in law enforcement. While decentralization is a Core tenet, the ability to freeze assets (as with USDT) offers a tool for accountability. However, critics argue it also raises questions about centralization. For now, the focus remains on victim restitution and deterring future scams.

What’s Next for the Frozen Funds?

Tether has committed to working with global law enforcement to return the funds to victims. While the process is complex, this case sets a precedent for cross-border cooperation in crypto crime investigations.

FAQs

What is a "pig butchering" scam?

A "pig butchering" scam is a type of fraud where criminals build trust with victims (often through romance or friendship) before convincing them to invest in fake schemes, then disappear with the money.

How did Tether freeze the funds?

Tether, unlike bitcoin or Ethereum, can freeze specific USDT tokens at the request of law enforcement, which it did in this case after tracing the funds through blockchain analysis.

How much have crypto scams cost in 2024?

Over $5.8 billion, according to the FBI’s Internet Crime Complaint Center.