DOJ Files Complaint to Seize $225.3 Million in Cryptocurrency Linked to Scams

The Department of Justice (DOJ) reported yesterday that it has filed a civil complaint to seize approximately $225.3 million in cryptocurrency associated with various crypto investment scams. According to the DOJ, it traced and targeted accounts that were part of a sophisticated blockchain-based money laundering network, which dispersed funds taken from over 400 suspected victims of fraud. In a press release

The complaint, The 75-page complaint, filed in the US District Court for the District of Columbia, provides further details regarding the seizure. The US Secret Service (USSS) and the Federal Bureau of Investigation (FBI) have linked the scammers to seven groups of Tether stablecoin tokens. This fraudulent activity falls under a category commonly referred to as “pig butchering,” which is a long-running confidence scam designed to deceive victims—often through fake romantic relationships—into believing they are making profitable crypto investments, only for the scammers to vanish with their funds. Pig butchering rings frequently traffic the workers who directly communicate with victims from Southeast Asian countries, a tactic that the DOJ alleges this particular ring employed.

The DOJ indicated that Tether and the crypto exchange OKX first alerted law enforcement in 2023 about a series of accounts they suspected were facilitating the laundering of fraudulently obtained currency through a vast and intricate web of transactions. Among the alleged victims is Shan Hanes, referred to in the complaint as S.H., the former president of Heartland Tri-State Bank, who was sentenced to 24 years in prison for embezzling tens of millions of dollars to invest in one of the most notorious most devastating pig butchering scams. The complaint also lists several other victims who lost thousands or even millions of dollars under the impression that they were making legitimate investments, none of whom committed any crimes themselves. According to An FBI report, the press release noted that overall crypto investment fraud resulted in reported losses totaling $5.8 billion in 2024.

The DOJ stated that any money recovered from this seizure will be allocated towards returning funds to the known victims of the scammers. Furthermore, the fervently pro-crypto Trump administration has previously indicated that forfeited funds not distributed to victims could be utilized to finance a US cryptocurrency reserve.