DOJ Aims to Seize $225 Million in Cryptocurrency from Investment Fraudsters

Overview of the Seizure

In a notable enforcement action, the Department of Justice (DOJ) has initiated a civil complaint aimed at seizing approximately $225.3 million in cryptocurrency associated with fraudulent investment schemes. The DOJ announced this development, emphasizing its effort to target accounts linked to a “sophisticated blockchain-based money laundering operation” that has affected over 400 fraud victims.

Details of the Legal Action

The 75-page complaint submitted to the US District Court for the District of Columbia provides comprehensive details regarding this seizure. According to the document, investigations by the U.S. Secret Service (USSS) and the Federal Bureau of Investigation (FBI) have connected scammers to multiple groups responsible for transactions involving Tether stablecoin tokens. The fraudulent activities fall under a category known as “pig butchering,” a long-term confidence scam that manipulates individuals—often through deceptive romantic relationships—into investing in fraudulent cryptocurrency ventures, after which the scammers vanish with the investments. The DOJ claims that the operators involved in this particular scam trafficked their employees to Southeast Asian nations to directly interact with victims.

Law Enforcement Collaboration

In 2023, both Tether and cryptocurrency exchange OKX reported concerns to law enforcement regarding a network of accounts believed to be facilitating the laundering of funds obtained through these fraudulent means. Among the victims identified is Shan Hanes, the former president of Heartland Tri-State Bank, who was sentenced to 24 years in prison for stealing millions to invest in one of the most notorious pig butchering scams. The complaint features other individuals who lost substantial sums, mistakenly believing they were making legitimate investments.

Impact on Victims and Future Use of Seized Funds

The DOJ has stated that any finances recovered from this action will be allocated to reimbursing the identified victims of these fraudsters. Additionally, previous assertions from the pro-crypto Trump administration indicate that any unclaimed forfeited funds could potentially be directed toward establishing a U.S. cryptocurrency reserve. An FBI report highlighted by the DOJ press release noted that losses related to crypto investment fraud reached an alarming total of $5.8 billion in 2024.