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Justice Department Seizes $868K in Tether Linked to Cryptocurrency Investment Scams
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The Justice Department announced today the civil forfeiture of $868,247 in Tether (USDT), alleging the funds represent illicit gains from a series of sophisticated cryptocurrency scams targeting victims across multiple states. The action underscores the growing federal crackdown on fraud within the rapidly evolving digital asset space.
The Department of Justice (DOJ) detailed that the seized funds are connected to schemes that defrauded at least four individuals between September 2022 and February 2025, wiht victims located in the District of Columbia, Texas, Illinois, and Florida. Co-conspirators allegedly laundered the stolen money through a complex network of cryptocurrency wallets in an attempt to conceal its origin and evade prosecution.
“these scams exploit the promise of high returns in the cryptocurrency market to prey on vulnerable individuals,” stated U.S. Attorney Jeanine Ferris Pirro. “We are committed to pursuing those who use digital assets to facilitate fraudulent schemes and holding them accountable for their actions.”
The examination originated in late 2022 when the FBI’s Honolulu Division Cyber Squad began investigating a report of a $1.3 million loss suffered by a Hawaii resident. The victim was targeted by the LME Crypto group, a fraudulent organization impersonating the London Metal Exchange. This group cultivated relationships with victims online before enticing them to invest in fake cryptocurrency trading platforms.
One victim of the LME Crypto Group, residing in the District of Columbia, reported a $30,000 loss to the FBI’s Internet Crime Complaint Center (IC3) in December 2023. The victim explained they believed the investment would yield “big profits in a short amount of time,” having purchased cryptocurrency through an online platform and invested it in an application called “LME.”
tactics of cryptocurrency Investment Fraud
According to the DOJ complaint, these scams typically begin with criminals initiating contact through seemingly accidental text messages, dating apps, or professional networking groups. Onc contact is established, perpetrators manipulate victims, gaining their trust and affection before recommending cryptocurrency investments, often touting their own purported success.
A common tactic involves directing victims to fraudulent investment platforms disguised as legitimate services. Perpetrators assist victims in opening cryptocurrency accounts – frequently on U.S.-based exchanges – and guide them through transferring funds from their bank accounts. These funds are then directed to cryptocurrency wallets controlled by the scammers.
Initially, the fraudulent platforms often display seemingly profitable returns, encouraging further investment. However, victims eventually find themselves unable to withdraw their funds, facing a series of excuses and ultimately being locked out of their accounts. The perpetrators frequently allow early, small withdrawals to build confidence and mask the underlying fraud.
Rising Tide of Cryptocurrency Crime
The scale of cryptocurrency investment fraud is substantial. The FBI’s IC3 reported approximately $5.8 billion in losses from such scams in 2024 alone, highlighting the urgent need for increased awareness and preventative measures.
Anyone who believes they may have been a victim of a cybercrime, including cryptocurrency scams, romance scams, or investment fraud, is urged to contact the FBI’s Internet Crime Complaint Center at https://www.ic3.gov.
The FBI Honolulu Field Office is leading the investigation, with support from the Justice Department’s Office of International Affairs and FBI’s Virtual Asset Unit. The DOJ also acknowledged Tether for its cooperation in facilitating the asset transfer.
The case is being prosecuted by Assistant U.S.Attorneys Kevin Rosenberg and Rick Blaylock Jr. of the District of Columbia, alongside trial Attorneys Stefanie Schwartz, Ethan Cantor, and Gaelin Bernstein from the DOJ’s Computer Crime and Intellectual Property Section, and Daniel Zytnick with the Consumer Protection Branch.
