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- The frozen funds were associated with scammers who orchestrated romance scams.
- The Justice Department also hinted at forthcoming “significant cryptocurrency enforcement actions”.
The United States Department of Justice seized approximately $9 million worth of Tether [USDT] on 21st November as part of a coordinated effort with Tether to freeze $225 million in illicit funds linked to a criminal organization engaged in romance scams.
The frozen funds were associated with scammers who orchestrated romance scams, colloquially known as “pig butchering” scams, where fraudsters build online relationships with unsuspecting individuals, ultimately tricking them into investing in purported legitimate ventures.
Coordinated action freezes $225 mln
Acting Assistant Attorney General Nicole Argentieri emphasized the scammers’ deceptive tactics. He stated they created websites that falsely assured victims of profitable returns on their investments.
In reality, these criminals were pilfering cryptocurrency, leaving victims empty-handed.
Despite the cryptocurrency landscape being perceived by some as an avenue to launder ill-gotten gains, Argentieri asserted that law enforcement is actively honing its expertise to trace and recover such funds for the benefit of victims.
The U.S. Secret Service’s analysts played a crucial role in tracing the laundered cryptocurrency. They employed techniques like “chain hopping,” involving the movement of funds through various wallet addresses and exchanges to obfuscate their origin.
Tether, a prominent stablecoin provider, also contributed to the operation by assisting in the transfer of the seized assets.
Notably, in 2020, the U.S. government took control of approximately 70,000 Bitcoin [BTC] linked to the infamous Silk Road. Earlier reports from October suggested that the U.S. government held over $5 billion in crypto.
DOJ hints at more enforcement actions to follow
The Justice Department, on the same day, hinted at forthcoming “significant cryptocurrency enforcement actions” in collaboration with the U.S. Treasury and the Commodity Futures Trading Commission (CFTC).
Meanwhile, the DOJ also issued an official statement regarding charges against Binance [BNB] and its former CEO, Changpeng Zhao (CZ).
This statement followed a deal reached earlier on the same day, where CZ pleaded guilty to charges. The agreement included substantial penalties, with Binance required to pay over $4 billion, and CZ fined $50 million, directed to the CFTC to settle charges against the exchange and its founder.
Furthermore, the exchange will acknowledge Zhao’s resignation from the CEO position. He will also be prohibited from involvement in Binance’s operations or management.
However, the ban on CZ’s presence will only last for three years from “the date a monitor is appointed.” Richard Teng – the former Global Head of Regional Markets, will be the new CEO.