Coinbase Supports Major USDT Scam Investigation

In a significant milestone for crypto crime enforcement, Coinbase played a crucial role in assisting the U.S. Secret Service in recovering $225 million in USDT linked to pig butchering scams. These scams, notorious in Southeast Asia, involve criminals building fraudulent relationships to manipulate victims into transferring crypto funds.

Tracing Illicit Crypto Transactions

During a focused investigative operation in late February 2024, Coinbase helped analyze blockchain data and onchain fund flows. This collaboration enabled the identification of over 130 Coinbase users who had unwittingly sent crypto to scam wallets, amounting to at least $2.3 million in losses. The recovered funds had initially been frozen by stablecoin issuer Tether in 2023 before being burned and reissued under Secret Service control.

Multi-Agency Cooperation and Wider Implications

The Department of Justice filed an enforcement action on June 18 following a comprehensive month-long probe into fraud networks operating across the region. Alongside Coinbase, exchanges like OKX and other unnamed platforms contributed to this notable seizure. This operation exemplifies the growing trend of digital asset firms cooperating with law enforcement to combat large-scale crypto fraud.

Addressing the Impact of Pig Butchering Scams

Pig butchering scams involve forced operators running fraudulent investment platforms targeting unsuspecting victims through fake romantic or business relationships. These schemes have caused significant financial damage worldwide, making this recovery one of the most substantial in crypto-related fraud history. Coinbase has also published resources to help victims submit relevant transaction records to authorities for restitution.