US Wants to Return $2.3 Million to Crypto Scam Victims

Reading Time: 2 minutes
  • The US Attorney’s Office in Massachusetts wants to seize $2.3 million in cryptocurrency stolen from victims in a “pig butchering” scam
  • The funds were recovered from two Binance accounts following a nine-month investigation
  • The funds were routed through Binance, which helped trace more victims

The US Attorney’s Office in Massachusetts has launched a civil forfeiture action targeting $2.3 million worth of cryptocurrency recently stolen from victims in a “pig butchering” scam. 

The cryptocurrencies, comprising USDC, USDT, TRX, SOL, and ADA, were seized from two Binance accounts in January following the discovery of the activity. These accounts were linked to a successful attempt to trick one victim into transferring $400,000 to the scammers, which then allowed investigators to identify connections to another 36 victims.

Pig Butchering Scams on the Rise

The investigation into the pig butchering scam, which is one of the fastest-growing types of fraud, began in spring 2023. Pig butchering scams, also known as pig slaughtering scams, are a type of fraud scheme where scammers use manipulative tactics to deceive victims into investing in fraudulent cryptocurrency ventures, often by promising them guaranteed returns. 

Scammers typically establish a level of trust with victims through online communications, such as social media or messaging platforms, and then persuade them to invest in fake cryptocurrency projects or trading schemes, running with the money once it has been ‘invested’. 

Scammers Used Binance

In most scenarios the funds are unrecoverable, but in this case, a civil forfeiture action has been possible thanks to the use of a centralized exchange in Binance. It follows similar efforts, including the recent seizure of $1.4 million in Tether by the U.S. Attorney’s Office in Chicago, related to a suspected tech support scam targeting the elderly.

The seized cryptocurrency is believed to be traceable to proceeds of wire fraud and money laundering, making it subject to forfeiture and, hopefully, return to the victims. The effort is not without precedent: in April last year, the Department of Justice announced the seizure of around $112 million worth of cryptocurrencies associated with pig butchering scams covering Arizona, Los Angeles, and Idaho.