US Seizes Over $225 Million in “Crypto-Confidence Scams”

Largest Cryptocurrency Seizure in US History

According to the DOJ, the seizure of $225.3 million in cryptocurrency, primarily Tether (USDT), was the result of a joint investigation by the USSS and the FBI, with assistance from Tether and the OKX exchange, which identified 144 accounts involved in “pig butchering” scams — a type of crypto-confidence scam. Scammers use fake relationships, often through dating apps or social media, to build trust with victims, then lure them into investing in fake cryptocurrency trading platforms. Victims’ funds are transferred to wallets controlled by the scammers, then laundered through a series of “chain hopping” transactions to obscure their origins.

The seizure involved hundreds of victims in the United States and more than 400 globally, with losses averaging millions of dollars per case. The FBI reported that cryptocurrency scams caused more than $5.8 billion in losses in 2024, up 45% from 2023. The DOJ stressed that the seizure was not only intended to cut off criminal funding but also send a warning message to international fraudsters.

The rise of crypto-confidence scams

The cryptocurrency market is at its peak in 2025, with a total market capitalization of $3.5 trillion and Bitcoin and Ethereum ETFs attracting $50 billion in institutional inflows in Q1. However, this growth has also been accompanied by a rise in sophisticated scams. Crypto-confidence scams, or “pig butchering,” are one of the most common forms of fraud, targeting inexperienced investors. Scammers often pose as lovers, financial experts, or friends to lure victims into transferring crypto to fake platforms, then lock their accounts or disappear.

The FBI recorded more than 69,000 complaints of crypto scams in 2023, with losses of $5.6 billion, and the number continued to rise in 2024. Projects like SharpLink Gaming (purchase of $463 million in ETH) and Trident Digital ($500 million in XRP reserves) show institutional interest, but also increase the appeal of crypto to criminals. This comes as the Trump administration pushes crypto-friendly policies, such as the GENIUS Act, but also emphasizes the need for increased enforcement to protect investors.

Marking a Step Forward in Law Enforcement

The $225.3 million seizure is a significant milestone, surpassing the $112 million seizure in 2023 and second only to the $3.36 billion Bitcoin seizure from Silk Road in 2021 in terms of total financial value. The collaboration between the USSS, FBI, Tether, and OKX demonstrates the growing ability of authorities to trace blockchain transactions, even when scammers use “chain hopping” techniques to launder money. The FBI used advanced blockchain analysis tools and international coordination to identify 37 wallets containing illicit funds, while Tether assisted by freezing these wallets.

The event highlighted the role of the FBI Virtual Assets Unit (VAU), established in 2022, and Operation Level Up, which has prevented $285 million in potential losses for more than 4,300 victims since 2024. It also demonstrated effective coordination between law enforcement agencies and the private sector, setting a new standard for handling cryptocurrency crimes.

Impact on investor confidence

The seizure sends a strong message that authorities can track and seize digital assets, even if the criminals are located overseas. This could boost institutional investor confidence in the crypto market, especially as firms like BlackRock (which aims to be the largest digital asset manager by 2030) and JPMorgan (which has applied for the trademark JPMD) expand their investments. However, the scale of the $5.8 billion loss by 2024 also raises concerns about financial security, especially for uninformed retail investors.

“Pig butchering” scams often target vulnerable people, such as the elderly or those new to the market. The FBI recommends that investors report early to the Internet Crime Complaint Center (IC3) and avoid shady investment platforms, but public education remains a major challenge.

Despite the great success, the seizure still faced a number of challenges:

• Scammers often operate from Southeast Asia, the Middle East, or Africa, where laws are weak or prosecutions are difficult. Seizing money does not guarantee arrest.

• Only a portion of the seized funds can be returned to victims, due to legal costs and difficulties in identifying wallet owners.

• Scams like Polyhedra (ZKJ token collapse due to “financial attack”) show that the cryptocurrency market is still vulnerable to manipulation, requiring stronger protections.

Disclaimer: The information presented in this article is the author's personal opinion on the cryptocurrency field. It is not intended to be financial or investment advice. Any investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in the article do not represent the official position of the platform. We recommend that readers conduct their own research and consult with a professional before making any investment decisions.

Compiled and analyzed by HCCVenture

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