A joint investigation involving Coinbase and the US Secret Service has led to the seizure of USD 225 million in USDT linked to pig butchering scams.
Pig butchering is a form of cryptocurrency-enabled fraud that has increasingly targeted retail investors. The funds were frozen and later destroyed by Tether before an equivalent sum was reminted and transferred into wallets controlled by US authorities. The recovered amount is currently held in custody, with a restitution process now in motion for identified victims.
The operation, which involved the identification and seizure of 39 digital wallet addresses, traced the illicit funds to 140 accounts on the OKX exchange. Several of these accounts were reportedly opened in the names of individuals coerced into working in scam compounds across Southeast Asia, illustrating the intersection between digital fraud and human trafficking.
The Secret Service confirmed the recovery of the funds at the end of 2023. It marked the largest cryptocurrency seizure by US authorities associated with online investment fraud schemes.
Blockchain analysis and Coinbase’s involvement
Coinbase worked alongside the Secret Service and other crypto exchanges between 26–29 February 2024 in a coordinated effort to trace the movement of stolen cryptocurrency. The collaboration relied heavily on blockchain analytics and legal subpoena processes to follow the money trail back to platform-based transactions.
Through these methods, investigators identified over 130 Coinbase users who had unknowingly sent funds to fraudulent wallets. The collective losses of these individuals amounted to approximately USD 2.3 million. According to representatives from Coinbase, these victims reflect only a portion of a wider pool of individuals likely affected by similar scams across the cryptocurrency ecosystem.
Victim Restitution Process Underway
Following the seizure, US authorities initiated a formal victim restitution process, which is being managed through the FBI’s Internet Crime Complaint Centre. Affected individuals are being asked to provide documentation of their transactions, typically by retrieving and submitting historical wallet activity from their respective crypto platforms.
Coinbase has issued support resources to help impacted users locate and supply the required information. The exchange is continuing to coordinate with law enforcement during the claims process, including facilitating customer support for access issues.
Officials from Coinbase noted that the on-chain nature of the process offered visibility into enforcement actions and highlighted how blockchain data can support investigative transparency.
