The U.S. Department of Justice has seized an Ethereum-based wallet holding 2,117,677.97 USDT, tracing the funds back to a “pig-butchering” investment scam that used counterfeit trading platforms to drain victims of their savings. The action proceeded through civil in rem forfeiture, a legal mechanism that targets the cryptocurrency assets directly rather than requiring a criminal conviction of any individual first.
In its filing, the DOJ stated that “the USDT is subject to forfeiture under federal law as it represents the proceeds of wire fraud and money laundering.” Tether, the issuer of the stablecoin, worked with investigators to freeze the tokens once the wallet had been identified.
How the Scam Operated
According to court documents, the network behind the fraud recruited victims through a mix of dating apps, WhatsApp messages, social media outreach, and fake job postings. Once contact was established, targets were steered toward counterfeit cryptocurrency investment platforms that displayed fabricated profit dashboards designed to encourage progressively larger deposits.
The mechanics followed a familiar pattern for this type of fraud: when victims eventually tried to withdraw their supposed gains, they were often told to pay additional “tax” or “verification” fees first. No withdrawals ever materialized, because the platforms themselves were entirely fictitious. At least one victim named in the case was based in Tennessee.
Tracing the Money Trail
Investigators used blockchain analysis to follow the stolen funds as they moved across multiple Ethereum wallets in an attempt to obscure their origin. That tracing effort ultimately linked the laundered proceeds to the wallet now subject to forfeiture.
A Growing Problem
The case adds to a mounting body of federal data on crypto-related fraud. The FBI's most recent reporting, covering 2024, logged more than 41,000 complaints tied to cryptocurrency fraud, totaling $5.8 billion in losses. Separately, the first half of 2026 saw 207 hacking incidents across the crypto industry, more than double the 85 recorded in the first half of 2025 — a trend that underscores why federal agencies have leaned more heavily on civil forfeiture and stablecoin issuer cooperation to claw back stolen funds.
