The Department of Justice (DOJ) has made headlines on Wednesday with the announcement of the largest-ever seizure of cryptocurrency funds associated with notorious pig-butchering scams. In a significant legal move, the U.S. attorney’s office filed a civil forfeiture complaint in the District Court for the District of Columbia, seeking to confiscate over $225.3 million in cryptocurrency. Federal prosecutors allege that this substantial amount is tied to a complex blockchain-based money laundering network designed to obscure the origins of funds acquired through illegal scams.
According to the forfeiture complaint, the FBI and Secret Service leveraged advanced blockchain analysis and various investigative techniques to establish that these funds were indeed linked to illicit activities. Shawn Bradstreet, the special agent in charge of the Secret Service’s San Francisco office, emphasized the significance of this seizure, stating, “This seizure of $225.3 million in funds linked to cryptocurrency investment scams marks the largest cryptocurrency seizure in U.S. Secret Service history.”
Bradstreet further noted the impact of these scams on victims, saying, “These scams prey on trust, often resulting in extreme financial hardship for the victims.” The collaborative efforts of the U.S. Secret Service, FBI, and private sector partners were crucial in tracing these illicit transactions, identifying victims, and ultimately seizing the funds for potential restitution to the rightful owners.
The bulk of the funds in question were reportedly acquired through cryptocurrency confidence schemes, commonly referred to as “pig butchering.” The term describes a scam tactic where the victim is “fattened up prior to slaughter,” meaning that perpetrators cultivate a relationship—often romantic in nature—to gain the victim's trust. Once trust is established, these fraudsters deceive victims into parting with their funds.
Typically, these scams unfold in several phases. Initially, the perpetrator will “cold contact” the victim, followed by establishing a rapport. After building this relationship, they convince the victim to send money, often cutting off communication immediately once the victim begins to have doubts. The DOJ has identified over 400 suspected victims globally, including numerous U.S. residents who have reported losses as a result of these scams.
Matthew Galeotti, head of the DOJ’s criminal division, addressed the seriousness of the issue, stating, “Today’s civil forfeiture complaint is the latest action taken by the Department to protect the American public from fraudsters specializing in cryptocurrency-based scams, and it will not be the last.” This statement underscores the ongoing commitment of the DOJ to combat financial fraud and enhance consumer protection in the rapidly evolving world of cryptocurrency.
