Simply put
- The U.S. federal government has moved to seize $225.3 million in USDT, which is Tether’s dollar-pegged stablecoin.
- This particular cryptocurrency is linked to what’s known as “pig slaughter” or confidence fraud.
- Tether collaborated with the U.S. Secret Service to facilitate these seizures.
On Wednesday, officials revealed they filed to seize a significant amount of tethers. This marks a notable forfeiture associated with the “pig slaughter” scam.
The U.S. Department of Justice, after an investigation, determined that a substantial amount of funds flowed through the OKX exchange after victims were scammed.
According to the DOJ, all cryptocurrencies involved are in the form of Tether’s USDT coins, which rank as the third largest digital asset by market cap.
Initially, Tether’s 2023 investigation pointed to the token’s illegal use being connected to human trafficking.
The complaint highlights that over $225.3 million in cryptocurrency is tied to an intricate blockchain-based money laundering scheme, involving numerous transactions that obscured the origins and control of the funds derived from fraudulent cryptocurrency investments.
Fraudsters allegedly distributed their earnings across various large cryptocurrency accounts to mask the origin of the illegally obtained money.
Tether CEO Paolo Ardoino commented, stating they are establishing compliance standards for digital assets to ensure that stablecoins aren’t misused by malicious entities.
According to court documents, Tether reported to the U.S. Secret Service in 2023 after tracing more than 144 accounts back to the scam, commonly referred to as “pig slaughter.”
These scams typically originate from China, using fake social media profiles and emotionally manipulative stories, leading people to part with their money after building trust. The term “pig slaughter” comes from the idea of deceiving individuals, akin to fattening pigs before their slaughter.
Law enforcement identified 144 accounts associated with the Philippines that reportedly deposited an astounding $3 billion over a year, indicating massive money laundering activities.
The DOJ has yet to respond to comments regarding this situation.
USDT serves as a stablecoin, designed to maintain parity with the dollar, and is often the most traded digital asset in the market.
These tokens, which exist across multiple blockchains, are commonly utilized by traders for entering and exiting crypto trades, serving as a fundamental component of the digital asset ecosystem.
Tether, based in El Salvador, claims to regularly work with law enforcement to identify possible illegal uses of its product, having frozen $2.7 billion worth of tokens linked to criminal activities.
