US authorities have announced the seizure of millions of dollars’ worth of cryptocurrency linked to a romance and investment fraud gang that used so-called “pig butchering” tactics.
The Department of Justice (DoJ) said it was able to intercept $9m worth of Tether, a cryptocurrency pegged to the US dollar. It traced the funds via cryptocurrency addresses allegedly linked to a known fraud gang that exploited over 70 victims.
Pig butchering often starts with an unsolicited message on social media or a dating site. Once the scammer has won the victim’s confidence over a period of time, they will persuade them to make crypto investments – in what turn out to be non-existent trading platforms.
Acting assistant attorney general Nicole Argentieri of the Justice Department’s Criminal Division, said she hoped the seizure would bring closure to the victims affected by this scam ring whilst serving as a warning to cyber-criminals.
“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States,” she added.
“These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing.”
According to the DoJ, US Secret Service analysts were able to trace deposits made by the victims even as they were swiftly laundered through dozens of cryptocurrency addresses and exchanged for different currencies, in a technique known as “chain hopping.”
The case highlights the value of victims reporting fraud, even when all seems lost, to bodies like the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Consumer Sentinel Network.
Although significant, the seizure pales in comparison with the $112m captured in April from six cryptocurrency wallets used to launder the proceeds of pig butchering scams.