• The Justice Department announced the seizure of $9 million worth of Tether.
  • The organization behind the seized funds allegedly exploited over 70 victims through romance scams and cryptocurrency confidence scams, also known as “pig butchering.”
  • The criminal actors behind the scams used money laundering techniques, such as “chain hopping,” to launder the victim’s deposits and exchange them for several different cryptocurrencies to obfuscate the nature, source, control, and ownership of those proceeds.

The United States Department of Justice has announced the seizure of $9 million worth of Tether, a cryptocurrency linked to the US dollar, as part of an investigation into an organization accused of exploiting over 70 victims through romance and cryptocurrency confidence scams. The funds were traced to cryptocurrency addresses allegedly linked to the scam, with the department stating that the seizure would bring some closure to the victims affected.

Details of the scam

According to court documents, criminal actors worked together to target victims and convince them to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. In reality, the purported firms and cryptocurrency exchanges were non-existent trading platforms.

Agents and analysts from the U.S. Secret Service (USSS) were able to trace those victim deposits and observed that the funds were quickly laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, a money laundering technique often referred to as “chain hopping.” These techniques are used to “layer” the proceeds of criminal activity into new cryptocurrency ecosystems, all to obfuscate the nature, source, control, and ownership of those proceeds.

“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States. These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing.”

Nicole M. Argentieri (Assistant Attorney General)

The Department of Justice also warned that cybercriminals should not view the cryptocurrency ecosystem as an ideal way to launder ill-gotten gains, as law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.

“This seizure is the culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service. Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”

Ismail J. Ramsey (U.S. Attorney for the Northern District of California)

This Action by DOJ demonstrates the department’s commitment to holding cybercriminals accountable for their actions and to protecting investors from fraud.

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