BURSTThe Department of Justice (DOJ) on Wednesday announced the largest-ever seizure of cryptocurrency funds linked to so-called pig-butchering scams.
The U.S. attorney’s office filed a civil forfeiture complaint in the District Court for the District of Columbia to seize more than $225.3 million in cryptocurrency that federal prosecutors say was part of a sophisticated blockchain-based money laundering network meant to conceal the source of funds obtained through illegal scams.
According to the forfeiture complaint, the FBI and Secret Service used blockchain analysis and “other investigative techniques” to determine that the funds were connected to the illegal activity.
“This seizure of $225.3 million in funds linked to cryptocurrency investment scams marks the largest cryptocurrency seizure in U.S. Secret Service history,” Shawn Bradstreet, special agent in charge of the Secret Service’s San Francisco office, said in a statement.
“These scams prey on trust, often resulting in extreme financial hardship for the victims. The U.S. Secret Service, FBI, and our private partners worked diligently to trace these illicit transactions, identify victims and seize these funds so that they can eventually be returned to their rightful owners,” Bradstreet continued.
Much of the illegal funds on the network were obtained through cryptocurrency confidence schemes, commonly known as “pig butchering,” which, according to the complaint, “refers to a scam in which the victim is ‘fattened up prior to slaughter.’”
These scams work by developing relationships, including those romantic in nature, whereby “perpetrators gain trust or confidence from victims to deceive them into parting with their money.”
The scams work in several phrases: First the perpetrator “cold contacts” the victim, then establishes a relationship with them and eventually convinces them to send funds. The perpetrator then cuts off contact as soon as the victim grows suspicious.
The DOJ stated that there are more than 400 suspected victims worldwide, including dozens of U.S. residents who have confirmed losses through the scams.
“Today’s civil forfeiture complaint is the latest action taken by the Department to protect the American public from fraudsters specializing in cryptocurrency-based scams, and it will not be the last,” Matthew Galeotti, head of the DOJ’s criminal division, said in a statement.