Crypto Firms Help Take Down International ‘Pig Butchering’ Scam

The cryptocurrency company Tether said Monday that it froze approximately US$225 million worth of its tokens from wallets linked to an international “pig butchering” scam ring in Southeast Asia that exploited more than 70 victims.

Tether CryptoTether cryptocurrency company voluntarily froze the illicit funds. More than 70 victims were scammed. (Photo: Satheesh Sankaran, Flickr, License)Pig butcheringis the term for an internet scam that combines phony romances with investment fraud involving cryptocurrencies. The name reflects the concept of fattening up a pig before slaughter, as the fraudsters strike up “relationships” with their victims over time, developing trust before moving in for the kill.

This is the largest freeze in the history of Tether’s cryptocurrency.

The crypto company, launched in 2014, is the largest stablecoin in the cryptocurrency arena. Its tokens are pegged to the U.S. dollar and follow its behavioral pattern, meaning that one Tether token (USD₮) is equivalent to one US dollar under optimal crypto market conditions.

Tether participated with another prominent crypto firm, OKX, and the U.S. Department of Justice in a months-long investigation that allowed the authorities to trace illicit funds from the romance scam network. Following the detection of these funds, the U.S. Secret Service initiated a freeze request and Tether initiated a voluntary freeze.

The U.S. Department of Justice, meanwhile, seized nearly $9 million of Tether crypto in connection with the case.

The ring recruited victims and convinced them to make cryptocurrency deposits, tricking them into believing they were investing in reputable cryptocurrency exchanges and companies. Instead, the funds were exchanged for several different cryptocurrencies, a money laundering technique known as "chain hopping." The technique is used to hide the origin, control, and ownership of funds.

Tether said that the frozen wallets are not associated with their own customers, but are on the secondary market, a kind of second-hand market where assets are re-traded.

Acting Assistant Attorney General Nicole M. Argentieri of the U.S. Department of Justice's Criminal Division stated, "The Department hopes that this asset recovery will serve to bring closure and a sense of justice to the more than 70 victims affected by this series of scams.

“This seizure should also serve as a reminder to cybercriminals that while the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise necessary to follow the money trail and confiscate it from victims."