DOJ Seizes $9 Million Worth of Crypto in Multiple Fraud Schemes

The United States Department of Justice (DOJ) recently seized $9 Million in stablecoin Tether (USDT) in a fraudulent scheme. The organization associated with the event reportedly exploited 70 victims via pig butchering scams. Bad actors involved in the activity lured them to invest in bogus projects.

A Seizure For Victim’s Closure

Justice Department’s Nicole M. Argentieri said, “Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States.” Adding that, “The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams.”

US Secret Service (USSS) agents observed and noted after tracing victim-deposited funds that the money was being moved and laundered. The scammers were using a technique called chain hopping. They use it to hide their acts by obfuscating crypto transactions.

In 2022, over a billion dollars were stolen in crypto rip-offs according to the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3). In another press release, the agency notes that $2.5 Billion was lost in fraudulent investment recovery schemes. Actors in such schemes assure a potential victim to offer crypto tracing to locate their funds.

Additionally, they charge some fee upfront for their ‘services.’ IC3 clarified in the release that, “Private sector recovery companies cannot issue seizure orders to recover cryptocurrency. Cryptocurrency exchanges only freeze accounts based on internal processes or in response to legal processes. Victims can also choose to pursue civil litigation to seek recovery of their funds.”

Chainalysis, a blockchain analysis firm, noted in a report that the crypto sector lost $14 Billion to scams in 2021. Interestingly, it remains the most fruitful year for almost all crypto projects. Assets including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and more reached their all-time high.

Crypto users have increased in number, and so have the fraudsters in the sector. Again, in 2021, a couple of South African brothers defrauded people of $3.6 Billion through their digital asset startup Africrypt. In another incident, the FBI arrested a couple who stole virtual currencies worth the same valuation in the year that followed.

Since the fall of FTX, the now bankrupt crypto exchange, and the TerraUST ecosystem, regulators have tightened their scrutiny towards the sector. Both entities had a significantly negative impact on the sector. Billions of dollars were wiped from the market. However, the market has managed to surpass $1 Trillion in market capitalization again.

According to Chainalysis, crypto inflows to known illicit accounts have declined by 65 percent. Moreover, social media has become a breeding ground for scammers. Users easily fall for easy profits that bad actors throw in front of them. Similarly, romance scams are on the rise too. A malicious actor will act as a friend or a love interest to pull money out of the victim’s bag.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.