DOJ Files To Seize $225 Million In Crypto From Scammers (theverge.com) 12
The DOJ has filed a civil complaint to seize $225.3 million in cryptocurrency linked to pig butchering scams -- long-con frauds where victims are tricked into fake crypto investments. The funds were laundered through a blockchain network, and the DOJ says recovered money will go toward reimbursing victims. The Verge reports: The 75-page complaint (PDF) filed in the US District Court for the District of Columbia lays out more detail about the seizure. According to it, the US Secret Service (USSS) and Federal Bureau of Investigation (FBI) tied scammers to seven groups of Tether stablecoin tokens. The fraud fell under what's typically known as "pig butchering": a form of long-running confidence scam aimed at tricking victims -- sometimes with a fake romantic relationship -- into what they believe is a profitable crypto investment opportunity, then disappearing with the funds. Pig butchering rings often traffic the workers who directly communicate with victims to Southeast Asian countries, something the DOJ alleges this ring did.
The DOJ says Tether and crypto exchange OKX first alerted law enforcement in 2023 to a series of accounts they believed were helping launder fraudulently obtained currency through a vast and complex web of transactions. The alleged victims include Shan Hanes (referred to in this complaint as S.H.), the former Heartland Tri-State Bank president who was sentenced to 24 years in prison for embezzling tens of millions of dollars to invest in one of the best-known and most devastating pig butchering scams. The complaint lists a number of other victims who lost thousands or millions of dollars they thought they were investing (and did not commit crimes of their own). An FBI report (PDF) cited by the press release concluded overall crypto investment fraud caused $5.8 billion worth of reported losses in 2024.
The DOJ says Tether and crypto exchange OKX first alerted law enforcement in 2023 to a series of accounts they believed were helping launder fraudulently obtained currency through a vast and complex web of transactions. The alleged victims include Shan Hanes (referred to in this complaint as S.H.), the former Heartland Tri-State Bank president who was sentenced to 24 years in prison for embezzling tens of millions of dollars to invest in one of the best-known and most devastating pig butchering scams. The complaint lists a number of other victims who lost thousands or millions of dollars they thought they were investing (and did not commit crimes of their own). An FBI report (PDF) cited by the press release concluded overall crypto investment fraud caused $5.8 billion worth of reported losses in 2024.
Blockchain (Score:4, Insightful)
Why can't the money be returned to the original owner using the public ledger using the blockchain that crypto currency uses?
Re: Blockchain (Score:5, Informative)
Because crypto trading is not a recognized legal method for this type of action. Also, the money was laundered. This means it's back in the normal money trading system. Putting it back into crypto would be an unnecessary hassle, possibly illegal, and potentially problematic in case the original victims are no longer of the crypto trading.
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So this excuse is a lazy glaze over and excuse for not returning peoples money.
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They are returning the money to victims, but there is no reasonable way to trace particular recovered bitcoins to specific victims. Arguably, putting it into a general fund for restitution is more "fair" anyway.
I presume that the DOJ will reimburse American victims, but most pig butchering victims are Chinese citizens.
China even intervened in Myanmar's civil war to shut down scammer call centers along the border. Some of the trafficking victims had been abducted in China. Others were from ethnicities who li
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The laundered crypto will be laundered once again into the presidential shitcoin wallet. Why do you think the birthday parade was sponsored by Binance?
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Maybe I am crypto illiterate but isn't the ledger simply addresses and transactions, is there anything in there that confers who the current "owner" of a particular coin is? Or would I need to do secondary work in the meat world to sort that out.
If these were "normal" financial transactions I imagine the chain of trust is much easier to track whereas with crypto it seems like those types of details are by design harder to know.
The US Secret Service? (Score:2)
The Secret Service is supposed to investigate money/currency forgery. Why are they involved here?
Has the US decided that crypto is now currency?