USDT’s Crucial Role in Freezing $225M Linked to ’Pig Butchering’ Scams
The U.S. Department of Justice (DOJ) has taken decisive action to seize $225.3 million in cryptocurrency connected to global 'pig butchering' scams, marking a significant milestone in the fight against large-scale confidence fraud. The civil complaint, filed in the District of Columbia, highlights the pivotal role of Tether (USDT) in freezing the majority of these assets. This enforcement action underscores the growing collaboration between stablecoin issuers and federal agencies like the U.S. Secret Service and FBI to combat crypto-related crimes. The case not only demonstrates the traceability of blockchain transactions but also reinforces the importance of regulatory compliance in the digital asset space. As of June 2025, this development serves as a reminder of the cryptocurrency industry's evolving maturity and its ability to work alongside traditional financial oversight mechanisms to ensure a safer ecosystem for all participants.
DOJ Seeks Forfeiture of $225M in Crypto Linked to 'Pig Butchering' Scams
The U.S. Department of Justice has initiated enforcement action to seize $225.3 million in cryptocurrency tied to global pig butchering scams. Filed in the District of Columbia, the civil complaint targets proceeds from large-scale confidence fraud schemes.
Tether played a pivotal role in freezing the assets, with most held in USDT. The stablecoin issuer collaborated with U.S. Secret Service and FBI investigations that traced the funds to sophisticated blockchain money laundering networks.
Authorities employed advanced analytics to unravel complex transaction webs designed to obscure illicit flows. The case highlights growing regulatory capabilities to track crypto-enabled financial crimes.
Arthur Hayes: Only Exchange-Backed or Bank-Linked Stablecoins Can Survive
BitMEX co-founder Arthur Hayes argues that stablecoin issuers must align with major exchanges, Web2 platforms, or legacy banks to thrive. Distribution channels—not technology—will determine survival in an increasingly competitive market.
Tether's early dominance in Greater China and the Global South created an enduring network effect, Hayes notes. Its integration with Bitfinex allowed seamless dollar conversions when traditional banking faltered—a moat new entrants struggle to cross.
Three gatekeepers control access: crypto exchanges (Tether), Web2 partnerships (Circle via Coinbase), and banks. Issuers without these channels face insurmountable hurdles. Profitability hinges on Treasury bill yields and user acquisition costs—advantages already locked by incumbents.
Tether Recognized by DoJ for Facilitating Seizure of $225M Linked to Fraud Operations
Tether, the leading issuer of stablecoins across multiple blockchains, has been acknowledged by the U.S. Department of Justice for its role in freezing $225 million tied to a large-scale fraud scheme. The funds, held in USDT, were allegedly stolen from over 400 victims. A civil forfeiture complaint was filed in the U.S. District Court for the District of Columbia.
The seizure marks the largest cryptocurrency recovery in U.S. Secret Service history. "These scams exploit trust, often leaving victims in severe financial distress," said Special Agent Shawn Bradstreet of the USSS San Francisco Field Office.
As the dominant issuer of dollar-pegged stablecoins, Tether faces ongoing scrutiny. Headquartered in El Salvador, the company remains a significant holder of U.S. Treasury securities. The GENIUS Act, recently gaining bipartisan Senate support, could further shape stablecoin regulation.
DOJ Links Kansas Bank Collapse to $225M Crypto Scam Involving USDT Laundering
The collapse of Heartland Tri-State Bank in 2023 has been tied to a sophisticated 'pig butchering' crypto scam, with the Department of Justice seizing $225 million in laundered USDT. Shan Hanes, the bank's former CEO, embezzled $47 million, much of which was lost to overseas scammers operating from a Philippines call center. The funds were funneled through a complex network of wallets and accounts on OKX, a cryptocurrency exchange.
Prosecutors detailed how scammers directed victims to send USDT to 93 deposit addresses before routing the funds through over 100 intermediary wallets. The laundered crypto was then consolidated into 22 primary OKX accounts and further dispersed across 122 additional accounts. Shared IP addresses and reused KYC documents linked the operation to ITECHNO Specialist Inc., a Manila-based scam compound.
OKX provided critical information that enabled investigators to trace the FLOW of stolen funds. The case highlights both the risks of crypto-related fraud and the growing sophistication of law enforcement in tracking illicit blockchain activity.
