Coinbase Assists U.S. Officials in $225M Stablecoin Seizure Linked to “Pig Butchering” Scam

U.S. crypto exchange Coinbase has confirmed that it supported the U.S. Secret Service in recovering approximately $225 million in stolen Tether (USDT), tied to a large-scale fraud operation known as a “pig butchering” scam.

These scams typically involve criminals pretending to build a romantic or professional relationship with victims. Once trust is established, the scammers convince their targets to deposit funds into fake crypto platforms. After draining enough funds, they disappear without a trace.

Stolen Funds Traced and Seized

As part of the investigation, Tether froze 39 wallets linked to pig butchering schemes in late 2023. Coinbase then collaborated with law enforcement to trace the stolen funds on-chain and identify affected users. The exchange discovered that 130 of its customers had collectively lost over $2 million to the scam.

Following these efforts, U.S. authorities seized $225 million in USDT connected to the fraudulent activity. Tether responded by burning the confiscated tokens on-chain and minting a new batch of equal value to support the restitution process.

The FBI is now leading the initiative to return funds to verified victims. Those affected must submit transaction records from Coinbase or other platforms to demonstrate they were targeted. Federal agencies, including the FBI and U.S. Secret Service, continue to prioritize pig butchering scams as a major threat in the evolving crypto crime landscape.

Tether Earns DOJ Praise Over Enforcement Aid

In a related development, the U.S. Department of Justice (DOJ) praised Tether’s cooperation in a major enforcement operation. The stablecoin issuer assisted authorities by leveraging blockchain analytics to freeze access to illicit funds and actively supported the enforcement process.

Tether stated that the operation reflects its broader compliance efforts and ongoing commitment to transparency. According to the company, it has now frozen over $2.7 billion in USDT linked to suspicious activity, working with more than 255 enforcement agencies across 55 countries.

For instance, in March 2025, Tether collaborated with the U.S. Secret Service to freeze $23 million in USDT tied to the sanctioned Russian exchange Garantex. It also worked with TRM Labs, the Tron network, and Spanish authorities to help disrupt over $100 million in illicit funds.

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