In a major breakthrough for crypto crime enforcement, Coinbase has revealed its critical role in helping the U.S. Secret Service (USSS) seize $225 million worth of stolen USDT. The funds were tied to widespread “pig butchering” scams — a type of fraud that often starts with fake romantic or business relationships online.
What Are Pig Butchering Scams?
“Pig butchering” scams are a growing concern in the digital finance world. Victims are often lured into what seems like a personal or business relationship, only to be tricked into investing large sums of money into fake crypto projects or wallets controlled by fraudsters.
In late 2023, stablecoin issuer Tether froze 39 wallet addresses linked to such scams. This action kicked off a major investigation led by the USSS.
Coinbase’s Role in the Investigation
Coinbase, one of the largest U.S.-based crypto exchanges, partnered with law enforcement to track the stolen funds. Using blockchain analysis tools, Coinbase helped trace the movement of funds across wallets and platforms — including 140 accounts on the OKX exchange.
In the process, Coinbase identified over 130 customers who were unknowingly defrauded, uncovering around $2.3 million in individual losses.
Returning the Funds to Victims
To ensure victims have a chance at recovering their stolen assets, the US Secret Service launched a public campaign. Affected users can now submit claims through the FBI’s Internet Crime Complaint Center (IC3).
Coinbase has also stepped in to help its affected users by providing guidance on how to access and submit their transaction histories.
As part of the restitution process, Tether burned the frozen USDT and reissued new tokens to a wallet controlled by the USSS, ensuring a secure and verifiable distribution to eligible victims.
Why This Matters
This successful recovery shows how public and private sectors can work together to fight crypto fraud. It also highlights the transparency benefits of blockchain — where every transaction leaves a digital trail that can be followed with the right tools and cooperation.
It’s a clear reminder: even in the world of decentralized finance, accountability is still possible.
