US Attorney's Office Seizes $61 Million in USDT Linked to 'Pig Butchering' Crypto Investment Scams

The United States Attorney’s Office for the Eastern District of North Carolina (EDNC) announced on February 25, 2026, the seizure of approximately $61 million in Tether (USDT) allegedly connected to the laundering of proceeds from cryptocurrency investment fraud schemes, commonly known as “pig butchering.”

Federal agents from Homeland Security Investigations (HSI) traced the funds through multiple cryptocurrency wallets following a victim report, with the Department of Justice acknowledging Tether’s assistance in transferring the seized assets.

Seizure Details and Legal Context

Federal law enforcement officials announced the forfeiture of over $61 million worth of Tether, a stablecoin pegged to the US dollar, in connection with an ongoing investigation into transnational cryptocurrency fraud. The seizure represents one of the larger cryptocurrency forfeitures in the Eastern District of North Carolina’s history.

US Attorney Ellis Boyle stated, “The seizure of a staggering $61 Million dollars’ worth of funds linked to cryptocurrency fraud shows that, in the Eastern District of North Carolina, cheaters never win. Our asset forfeiture team worked along with HSI to take the profit out of crime.”

The asset forfeiture action targets cryptocurrency addresses that investigators allege were used to launder funds stolen from victims of investment fraud schemes. The seized assets will be subject to formal forfeiture proceedings as the investigation continues.

Mechanics of the ‘Pig Butchering’ Scheme

According to court filings, criminal actors employed a multi-stage fraud strategy targeting victims through relationship-building tactics. Perpetrators established trust with victims under the pretense of romantic relationships before introducing fraudulent investment opportunities.

Once trust was established, scammers claimed to possess specialized techniques for generating substantial profits through cryptocurrency trading. Victims were directed to fake cryptocurrency trading platforms that closely mimicked legitimate exchanges in both name and appearance. These fraudulent platforms displayed fabricated investment portfolios showing unusually high returns, deliberately designed to encourage increasingly large deposits.

When victims attempted to withdraw funds, they encountered various obstacles, including demands for “taxes” or “fees” purportedly required to release their money. These tactics were used to further exploit victims and extract additional funds.

Funds Tracing and Asset Recovery

The investigation began when a victim reported alleged investment fraud through the HSI Tip Line in Raleigh, North Carolina. Agents and analysts from Homeland Security Investigations traced the victim’s funds through multiple cryptocurrency wallets used in the fraud and money laundering scheme.

Investigators determined that once victim funds transferred to cryptocurrency wallets under the scammers’ control, the money was rapidly routed through numerous intermediary wallets to obscure the nature, source, control, and ownership of the stolen proceeds. Despite these layering techniques, agents successfully identified several wallets that still contained substantial amounts of victim funds eligible for seizure and forfeiture.

HSI Charlotte Acting Special Agent in Charge Kyle D. Burns commented, “Criminal actors and professional money launderers use cyber-enabled fraud schemes to swindle their victims and conceal their ill-gotten gains. HSI special agents work diligently to trace the illicit proceeds of crime across the globe to disrupt and dismantle the transnational criminal organizations that seek to defraud hardworking Americans.”

The Department of Justice and HSI acknowledged Tether’s cooperation in facilitating the transfer of the seized assets, highlighting the role of stablecoin issuers in assisting law enforcement with asset recovery efforts.

FAQ: Understanding Crypto Seizures and Pig Butchering Scams

What is a “pig butchering” scam in cryptocurrency?

Pig butchering is a type of investment fraud where scammers build trust with victims over time—often through fake romantic relationships—before “butchering” them by convincing them to invest increasingly large sums in fraudulent cryptocurrency platforms. The term refers to fattening a pig before slaughter. Scammers use fake trading platforms displaying unrealistically high returns to encourage more deposits, then block withdrawal attempts with various fee demands.

How did federal agents trace and seize $61 million in cryptocurrency?

HSI agents traced victim funds through multiple cryptocurrency wallets using blockchain analysis techniques. Despite scammers routing money through numerous wallets to hide its origin, investigators followed the transaction trail to identify wallets still containing stolen funds. The seizure was executed by gaining control of the private keys or working with Tether to freeze and transfer the USDT assets, which requires issuer cooperation for stablecoins.

What happens to **** seized** cryptocurrency after a federal forfeiture?**

Seized cryptocurrency is held by law enforcement pending formal forfeiture proceedings. Once forfeiture is finalized through the court system, the assets may be liquidated, with proceeds potentially used for victim restitution or deposited into the Department of Justice Assets Forfeiture Fund, which supports law enforcement activities. The process follows federal asset forfeiture laws and requires judicial approval.

How can individuals protect themselves from crypto investment scams?

The FBI and HSI recommend being skeptical of unsolicited investment opportunities, especially those initiated through dating apps or social media. Red flags include promises of guaranteed high returns, pressure to invest quickly, requests to pay fees for fund withdrawal, and platforms that closely mimic legitimate exchange names. Victims should report suspected fraud to the HSI Tip Line or FBI Internet Crime Complaint Center (IC3).

Law Enforcement Coordination and Industry Cooperation

The seizure demonstrates ongoing coordination between federal law enforcement agencies and cryptocurrency industry participants. Tether’s cooperation in transferring the seized assets reflects increasing engagement between stablecoin issuers and regulatory authorities in combating financial crime.

The investigation remains active, with federal authorities continuing to analyze blockchain transactions and pursue additional leads related to the fraud network. The US Attorney’s Office for the Eastern District of North Carolina has not disclosed whether specific individuals have been identified or charged in connection with the seized funds.