The U.S. Department of Justice recently made a significant move to seize $2.3 million in cryptocurrency believed to be associated with an elaborate “pig butchering” scam. The scam, which involved convincing victims to invest in fraudulent schemes, led to financial and emotional damage for many individuals across the United States. The investigation into the scheme began in spring 2023, revealing that a Massachusetts resident was among those who fell victim to the fraud by wiring over $400,000 into a crypto wallet.
In response to the scam, the U.S. Attorney’s Office, District of Massachusetts, filed a civil forfeiture action to recover the funds connected to the alleged “pig butchering” scheme. The seized cryptocurrency, totaling approximately $2.3 million, included various digital assets such as USD Coin (USDC), Tether (USDT), Tron (TRX), Solana (SOL), Binance Coin (BNB), Cardano (ADA), and Ether (ETH) from two accounts linked to the scam. The Department of Justice stated that the crypto was believed to have originated from wire fraud activities and was likely involved in money laundering.
The seizure of funds in this scam sheds light on the growing issue of investment fraud in the cryptocurrency space. According to a recent report by the Federal Bureau of Investigation (FBI), investment losses related to cryptocurrencies rose significantly from $2.57 billion in 2022 to approximately $3.94 billion in 2023, marking a 53% increase. These losses accounted for the majority of investment fraud in the country, representing around 86% of the total investment fraud losses amounting to $4.57 billion for the year.
The civil forfeiture process enables third parties with potential claims to the seized property to come forward and have their claims adjudicated before the assets are officially forfeited to the U.S. government. The recovered funds may then be redistributed to the victims of the scam, providing some measure of justice for those who were deceived and financially harmed. The actions taken by the U.S. Department of Justice serve as a reminder of the importance of vigilance and caution in the cryptocurrency market to protect oneself from falling victim to fraudulent schemes like the “pig butchering” scam.
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