US Justice Department Seizes 9M USDT Amid $225M Illicit Funds Frozen by Tether – The U.S. Department of Justice revealed the confiscation of approximately $9 million in Tether after the freezing of funds linked to a criminal group involved in romance scams by the stablecoin issuer.
In a Nov. 21 announcement, the Justice Department said the seized funds came from “scammers who stole millions from victims across the United States” and were presumably part of Tether’s efforts to freeze $225 million worth of USDT in “external self-custodied wallets” connected to the scam.
The funds were allegedly tied to an organization responsible for “pig butchering” romance scams, in which bad actors attempt to develop an online relationship with unsuspecting individuals, often convincing them to invest in legitimate businesses before conning them. “These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money,” said Acting Assistant Attorney General Nicole Argentieri.
“The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”
According to the Justice Department, analysts with the U.S. Secret Service traced the crypto, which had been laundered through different wallet addresses and exchanges — a practice called “chain hopping.” The U.S. government also acknowledged Tether’s contribution “for its assistance in effectuating the transfer of these assets.”
Previously, U.S. authorities exercised their power to confiscate unlawful funds associated with cryptocurrency scams and crimes. An example is the takeover of approximately 70,000 Bitcoin connected to Silk Road in 2020. In October, crypto company 21.co disclosed that the U.S. government held over $5 billion in cryptocurrency based on its seizure analysis.
People Also Read: Dubai Financial Authority Approves XRP as ‘Recognized Crypto Token’
The Justice Department, on November 21, disclosed intentions to unveil meaningful cryptocurrency enforcement measures in collaboration with the U.S. Treasury and Commodity Futures Trading Commission. There was widespread speculation that this announcement pertained to a rumored $4-billion settlement with Binance, with reports suggesting Changpeng Zhao’s potential resignation.