Key Insights:
- The US Department of Justice confiscated 61 million USDT from a pig butchering crypto scam.
- HSI followed the money through wallets and assets frozen through Tether.
- Prosecutors secured prison terms as AI-driven scams surged in 2025
USDT seizure efforts by federal authorities in North Carolina have led to the confiscation of more than $61 million worth of Tether’s dollar-pegged stablecoin, USDt, in connection with a large-scale “pig butchering” cryptocurrency investment scam.
USDT Seizure Follows Multi-Wallet Tracing Effort
The U.S. Attorney’s Office for the Eastern District of North Carolina confirmed that more than $61 million worth of Tether’s USDt was seized following an investigation into a network accused of orchestrating a “pig butchering” scam.
Homeland Security Investigations (HSI) traced the movement of funds across multiple digital wallets, then identified addresses that still held substantial balances, which were frozen and made subject to forfeiture proceedings.
The suspects involved in the scheme allegedly identified themselves as romantic partners and claimed specialized knowledge of the cryptocurrency trade, according to prosecutors. Once they got in touch with victims via dating apps or social media, they allegedly developed relationships with them in weeks or months.
Source: United States Attorney’s Office, North Carolina
Authorities stated that once trust had been built, the suspects directed victims to professional-looking but fraudulent cryptocurrency investment websites. Moreover, the authorities identified several blockchain addresses that continued to hold substantial amounts of USDt. Those assets, totaling more than $61 million, were subsequently seized.
The Department of Justice acknowledged Tether’s cooperation in the process. In its statement, prosecutors noted that Tether assisted authorities in transferring the assets. The release described the case as another example of stablecoin issuers working with law enforcement agencies to freeze and recover funds linked to alleged criminal activity.
Authorities stated that the confiscated USDt represented funds obtained through fraudulent investment platforms that displayed fictitious portfolios and unusually high returns.
Additionally, the victims were said to have been encouraged to make further investments after seeing fake gains. When they attempted to withdraw funds, they were either blocked from doing so or instructed to pay additional “taxes” or fees. In many instances, communication ceased once further payments were demanded.
Prosecutors described the operation as a hybrid tactic commonly referred to as “pig butchering.” The method combines long-term emotional manipulation with financial exploitation.
The fraudulent websites used in the scheme displayed simulated trading activity and fabricated profit growth. A seizure of $61 million USDT was part of the fraud scheme and involved fake trading activity and an artificial increase of profits. Officials claimed that the confiscated funds are the cumulative losses of many victims, whose funds were combined into dozens of wallets and subsequently traced.
Expansive Outlay of Rogue Cryptocurrency.
The USTD seizure of $61 million is part of the larger campaign to tackle illegal cryptocurrency flows. In its Crypto Scams 2026 report, Chainalysis estimates that in 2025, total illicit cryptocurrency money transfers will have surpassed $158 billion.
However, that figure accounted for approximately 1.2% of total crypto transaction volume during the year. The statistics of the firm revealed that the number of artificial intelligence-based impersonation and social engineering fraud doubled annually.
A different case was published in December 2025, when a Bitcoin investor claimed that he lost his retirement fund after communicating with an online person who claimed to be a trader. According to the statement, the suspect allegedly used AI-generated images and a fake identity to build credibility, then referred the victim to a fake investment site.
Sentencing and Enforcement Actions.
Federal prosecutors have recently secured major prison sentences in cases involving pig butchering operations. In February, one of the central participants of a crypto laundering system that laundered over $70 million was convicted to 20 years of federal incarceration. Moreover, officials referred to the sentencing as a continuation of an initiative to combat extensive schemes of crypto investment fraud.
Prosecutors cited additional examples of large recoveries, including a $15 billion recovery connected to an entity identified as the Prince Group. Officials stated that such recoveries demonstrate increased capability to trace and freeze digital assets held in centralized stablecoin systems.
The Justice Department indicated that cooperation from centralized issuers is essential to enforcement. In the North Carolina case, the seized USDt was transferred with the issuer’s assistance after investigators identified relevant wallet addresses.
