The Massachusetts division of the United States Attorney’s Office has taken legal action to reclaim cryptocurrency that was involved in a scam known as the “pig butchering” operation, which targeted a Massachusetts resident and 36 others. On March 13, the U.S. Attorney’s Office filed a civil forfeiture action to return $2.3 million worth of various cryptocurrencies, including USD Coin (USDC), Tether (USDT), Ether (ETH), and Solana’s SOL, to the victims of online scams and fraud.
A civil forfeiture action is a legal process used by law enforcement agencies to seize assets, such as property or funds, that they suspect to be involved in illegal activities. In these cases, the assets themselves are considered the defendant in the legal proceedings, rather than any specific individual.
The cryptocurrencies, which include nearly 300,000 USDC, 1.5 million USDT, 102,000 Tron (TRX), 3,000 SOL, and 14,000 Cardano (ADA), were confiscated from two Binance accounts in January as a result of an investigation into the “pig butchering” scam that targeted a Massachusetts resident. Pig butchering is a scam technique in which fraudsters establish trust with their victims online and persuade them to invest in a cryptocurrency scheme, only for the victims to later realize they have been defrauded. U.S. regulators have warned investors about this technique and have taken legal action against some of the perpetrators.
The authorities began investigating the scheme in the spring of 2023 and discovered that cryptocurrency had been seized from funds connected to 37 victims, including the Massachusetts resident. According to the statement, the victim of the scam was deceived into wiring $400,000 to the scammers, who then transferred the funds to other wallets that were linked to funds from the other 36 victims.
This recent action by the United States Attorney’s Office in Massachusetts comes shortly after the news last week that the U.S. Attorney’s Office in Chicago had seized $1.4 million worth of USDT from an unhosted virtual cryptocurrency wallet associated with a suspected tech support scam targeting the elderly. Tether willingly cooperated in the asset recovery process, destroying the funds linked to the accused fraudsters and reallocating them to alternative wallets under government supervision for restitution to the victims.
In January, the Commodity Futures Trading Commission issued warnings and charged digital asset platform Debiex with fraud for allegedly using the pig butchering technique to defraud investors of $2.3 million. The Financial Crimes Enforcement Network also issued a warning to investors when it released a pig butchering alert late last year.