US DOJ and Tether Shut Down $3.3 Million Crypto Fraud Network

The US Department of Justice (DOJ) announced on May 23 that it has recovered more than $3.3 million in digital assets connected to crypto-based fraud.

According to press statements, US District Judge Amir Ali approved the forfeiture of roughly $2.5 million in cryptocurrencies. Separately, the authorities seized another $868,000 in digital assets tied to a similar scam.

Tether-Backed Operation Helps DOJ Recover Millions

The DOJ said the asset forfeitures are part of a wider campaign to dismantle crypto-related fraud and strip criminals of any gains.

“Whether they are in our district’s streets or hiding behind a computer screen abroad, the United States will continue to hold fraudsters and grifters responsible, seize money they scam from hardworking Americans, and use our authority to compensate victims,” US Attorney Jeanine Ferris Pirro said.

The DOJ explained that the seized assets are tied to sophisticated cryptocurrency investment scams.

These schemes typically begin with scammers reaching out to victims via unsolicited text messages, dating apps, or professional networking platforms. Once communication is established, the fraudsters build rapport and trust over time.

The scammer then promotes what appears to be a successful cryptocurrency investment opportunity. Victims are often guided to seemingly legitimate platforms that are, in fact, controlled by the criminals. These platforms mimic real investment sites to mislead users.

The victims are encouraged to create accounts on popular cryptocurrency exchanges and transfer funds from their bank accounts. Once the assets are converted to crypto, they are then moved to fake platforms controlled entirely by the scammers.

These platforms may display high returns to entice larger deposits. In some cases, victims are allowed to withdraw a small amount of profit to build credibility and encourage continued investment.

Eventually, access is revoked, excuses are made, and victims lose control of their funds entirely. By then, the perpetrators have already funneled the funds to wallets under their control.

FBI Special Agent Stacey Moy noted the human cost of these operations, saying that these schemes manipulate vulnerable victims into losing devastating amounts of money.

“We hope today’s announcement brings a measure of justice to the victims and serves as a reminder, the FBI will hold fraudsters accountable, no matter where they are located,” he added.

Meanwhile, the DOJ also thanked Tether, the issuer of the USDT stablecoin, for supporting the investigation. Over the years, the firm has consistently worked with law enforcement to restrict bad actors from using its network.