The U.S. Department of Justice has initiated a process to take $12 million in USDT connected to a network of “pig butchering” scams. The goal is to return money to victims and put pressure on operators who move funds illegally. The action relies on civil forfeiture and blockchain analysis, with cooperation from Tether.
The forfeiture action
The $12 million in USDT relates to fraud operations that blend romantic trickery with false investment plans. These schemes are called “pig butchering” because victims are groomed over time before large sums are extracted. The DOJ is using civil forfeiture to make potential repayments faster, aiming both to recover funds for victims and to disrupt the networks facilitating the scams.
The human cost is stark, illustrated by cases such as a woman in Illinois who lost nearly $1 million and a professional in the U.S. from India who lost about Rs 4 crore. These examples show the damage to personal savings and confirm the DOJ’s priority in these matters.
Legal basis and civil forfeiture
The legal basis includes 18 U.S.C. § 981(a)(1)(C), which permits taking assets derived from fraud and illegally moved funds. Civil forfeiture allows seizure of assets connected to crime without a criminal conviction, accelerating recovery but also sparking legal arguments about procedural protections. Brief definitions: Civil forfeiture allows the seizure of assets said to connect to crime without a criminal conviction; “Pig butchering” combines romantic fraud with false investment offers to extract large sums from victims.
On-chain tracing and Tether’s cooperation
On-chain tracing is central to the investigation, following flows between wallets, identifying patterns of illicit movement, and mapping points where authorities request freezes. This approach aims to recover funds and adds pressure on operational centers in regions known for these networks.
Tether is working with authorities on the investigations. CEO Paolo Ardoino says the company cooperates and points to blocks and freezes of USDT linked to illegal activity, and Tether says it is transparent in these efforts. This cooperation illustrates how stablecoin issuers can assist with tracing and sanctions.
For traders and managers, the message is clear: increased regulation and private-sector cooperation reduce the money available to illegal operators, while enabling quick actions on wallets linked to suspect addresses. The action prioritizes quick repayment and the disruption of fraud networks, and its success will depend on the ability to follow the on-chain trail and turn seizures into repayments.
