TLDR
Coinbase aids US Secret Service in largest crypto seizure, tracing $225M from fraud schemes.
Tether freezes 39 wallets, helping recover stolen crypto worth $225M in major bust.
US Secret Service seizes $225M tied to “pig butchering” crypto scam, marking a historic operation.
Global authorities ramp up crypto seizures, with Australia and Germany making major busts this year.
The US Secret Service has successfully seized over $225 million in cryptocurrency allegedly stolen through fraudulent investment schemes, marking the largest cryptocurrency seizure in the agency’s history. This operation was supported by Coinbase, which played a significant role in the investigation and subsequent asset recovery.
Coinbase Role in the Investigation
Coinbase, one of the largest cryptocurrency exchanges, revealed its involvement in assisting the US Secret Service with this major operation.
The company, as a result, confirmed its role in tracing millions of dollars in crypto transactions to illicit wallets and other suspicious account activities. Coinbase stated that between February 26 and February 29 of the previous year, its team conducted blockchain analysis and subpoenaed records to identify victims of a crypto investment scam.
According to the exchange, over 130 Coinbase customers were among those unknowingly defrauded by the scam, with total losses amounting to $2.3 million. By working with other exchanges, Coinbase and the Secret Service were able to trace the illicit flow of funds, helping to flag the victims and build a strong case to recover the stolen assets.
Collaboration with Other Exchanges and Tether’s Involvement
The investigation, which took place in 2024, saw collaboration between multiple cryptocurrency exchanges. The Secret Service traced some of the stolen funds back to accounts at OKX, another major crypto exchange. These accounts were as a result linked to individuals allegedly operating from scam compounds in Southeast Asia.
In addition to Coinbase’s work, Tether, the issuer of the USDT stablecoin, also assisted in the investigation. The stablecoin issuer froze 39 wallet addresses containing the stolen funds, which amounted to the $225 million seized by the Secret Service.
Tether then burned the tokens, permanently removing them from circulation. Later, the equivalent amount of new USDT was reissued and transferred to a wallet controlled by the Secret Service. This action was visible on the blockchain, offering a real-time example of how crypto can enhance transparency in law enforcement operations.
Largest Crypto Seizure in Secret Service History
This operation is now regarded as the largest cryptocurrency seizure ever conducted by the US Secret Service. Agent in Charge Shawn Bradstreet noted that this seizure represented a major milestone in their ongoing efforts to combat crypto-related scams.
The $225 million in assets was concurrently linked to a form of fraud known as “pig butchering,” a scam that has gained traction in recent years.
Pig butchering scams involve scammers building fake investment opportunities, usually involving cryptocurrencies, to lure victims into sending large sums of money. Once the victims are convinced that their investments are profitable, they are manipulated into sending more funds. This scam asa. result often involves high-pressure tactics and promises of large returns, which makes it difficult for many victims to recognize the fraud until it is too late.
Crypto Seizures Worldwide
The seizure by the US Secret Service is part of a broader trend of global authorities taking action against crypto-related crimes. Just this year, Australian authorities seized nearly 25 Bitcoin, worth over $2.6 million, which had been stolen from a French crypto exchange in 2013. Similarly, in Germany, law enforcement agencies seized $38 million in crypto from a platform used to launder funds after a major hack of the Bybit exchange.
These actions as a result reflect the growing efforts of law enforcement to tackle the rising trend of crypto scams and money laundering. While the transparency of blockchain technology makes it easier for authorities to trace illicit funds, the global nature of cryptocurrency presents ongoing challenges in combating these crimes.
Coinbase’s active involvement in helping identify victims and trace stolen assets emphasizes the critical role that cryptocurrency exchanges and stablecoin issuers play in supporting law enforcement efforts. As crypto-related crimes continue to rise, collaboration between exchanges and law enforcement agencies is likely to remain an essential part of the effort to address and mitigate such illegal activities.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
