A day after Tether “voluntarily” froze 25 million in $USDT found to be connected to an international crime syndicate, the US Department of Justice (DoJ) announced seizing a part of it.
In an official press release, the DoJ revealed the seizure of nearly $9million worth of Tether that was traced to cryptocurrency addresses allegedly associated with a human-trafficking syndicate.
The organisation in question is said to have exploited over 70 victims through romance scams and cryptocurrency confidence scams, which are widely known as “pig butchering”.
Criminal actors associated with it targeted victims in convincing them to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. These were in-fact non-existent platforms.
Agents and analysts from the US Secret Service (USSS) successfully managed to trace those victim deposits and observed that the funds were quickly laundered through several cryptocurrencies.
The malicious actors did this via a money laundering technique which is often referred to as “chain hopping”. Here, it “layers” the proceeds of criminal activity into new cryptocurrency ecosystems, all to hide the nature, source, control, and ownership of those proceeds.
The department also acknowledged Tether for its assistance in “effectuating the transfer of these assets”. The stablecoin issuer has been involved in the investigation with the DOJ from the start, along with Web3 technology company OKX, with the help of the Tools from blockchain analysis firm Chainalysis.
The latest development comes right after what Tether called the largest-ever freeze of $USDT in history. As per on-chain data, the funds were located across 37 wallets, with the majority of those tokens previously being transferred to OKX.
Claiming this to have set a precedent for the industry, the CEO of Tether, Paolo Ardoino had said: “Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for safety within the crypto space. Our recent collaboration with the Department of Justice underscores our dedication to fostering a secure environment. We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry.”
The US Attorney Ismail J. Ramsey for the Northern District of California called the latest seizure a culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service. As per the Federal Bureau of Investigation (FBI), these kinds of scams have cost US citizens about $3.3bn last year.
The Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division also commented on the DoJ’s feat saying: “The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams.
“This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”
