US Govt. Files Forfeiture Action Against Scam-Linked Tether Held in Binance

Documents filed in the US District Court of Columbia showed that the government has launched a forfeiture complaint against $200,000 worth of Tether (USDT) held in Binance exchange. The cryptos were linked to a popular pig-butchering crypto scam worth $1.1 million.

The court describes the nation of action as “wire fraud, wire fraud conspiracy, money laundering, and money laundering conspiracy activity.”

The Federal Bureau of Investigation (FBI) seized funds in USDT from criminals abroad involved in “pig-butchering” scams, the documents revealed. It is a type of online investment scam where perpetrators create fake profiles to lure victims into fraudulent investment schemes.

Reportedly, an anonymous victim of two separate pig-butchering scams made a complaint to the police. According to the statement, they had lost around $1.1 million between January 2021 and December 2022.

The US is seeking to “lawfully forfeit” the Tether crypto to:

• punish and deter criminal activity by depriving criminals acquired through illegal activities,
• promote and enhance cooperation among federal and foreign law enforcement agencies,
• recover assets that may be used to compensate victims.

Two Romance Scams

A victim developed relationship with the first scammer on Facebook’s dating app in the name Eva Markus, in December 2020. The account had a women profile picture claiming as Markus, investigations revealed.

The scammer had a LinkedIn profile with same name, claiming to be an engineering consultant from Boston, currently in Turkey.

In Jan 2021, Markus told the victim that the diamond mine that she was working exploded, convincing the victim to send funds to hire an attorney to return to the US. The victim reportedly transferred over $400,000.

In a second romance scam, the victim fell to the trap of another scammer, claiming to be Lisa Warren. The perpetrator convinced the victim to invest in crypto and transfer funds to a wallet controlled by Warren.

In an attempt to recoup the losses incurred from Markus, the victim sent Warren $55,000 in Bitcoin. Warren then persuaded the victim to sell their house and invest more in crypto.

After several follow-ups the victim only received $15,000 back out of roughly $600,000, realizing it was a scam.

The FBI later traced victim’s funds to a Binance account, following which, Binance froze the funds and alerted authorities.

The US Federal Trade Commission (FTC), Monday, issued a warning against the rise of crypto-related “pig-butchering” scams or romance scams.