DOJ Moves to Recover $225 Million from Crypto Scammers

Authorities have identified accounts implicated in laundering funds from 'pig butchering' schemes.

In a significant legal move, the Department of Justice disclosed it has filed a civil suit to claim approximately $225.3 million in digital currencies connected to fraudulent crypto investment operations. The DOJ reported it zeroed in on accounts participating in an elaborate blockchain-based laundering network siphoning money from over 400 alleged fraud victims.

Details of this legal action were shared through a filing in the US District Court for the District of Columbia, which reveals the collaboration between the US Secret Service and the FBI. Their investigation uncovered scammers linked to numerous clusters of Tether stablecoin holdings. The fraudulent operation falls under the notorious 'pig butchering' scams—a tactic where victims, sometimes through deceitful romantic relationships, are lured into seemingly lucrative crypto ventures, only for the scammers to vanish with the investments. Per the DOJ, these operations traffic their operatives to countries in Southeast Asia to engage victims—a tactic allegedly used by this particular group.

The DOJ explained that Tether and the crypto exchange OKX sounded the alarm in 2023 about several accounts suspected of funneling illicit funds through a complicated network of transactions. Among those affected is Shan Hanes, the former president of Heartland Tri-State Bank, currently serving a 24-year sentence for misappropriating millions for one of the premier 'pig butchering' con jobs. A roster of additional victims is included in the complaint, all of whom lost vast amounts without engaging in any illicit activities themselves. An FBI analysis, referenced in the press release, notes that reported crypto investment scams led to $5.8 billion in losses in 2024.

According to DOJ statements, funds recovered through this action will be directed towards compensating identified scam victims. Additionally, the pro-crypto stance of the Trump administration has previously acknowledged that any seized assets not designated for restitution could potentially support a US cryptocurrency reserve.