US Authorities Seize $61 Million in USDT from Pig Butchering Scams
By John Nada·Feb 25, 2026·4 min read
US authorities have seized over $61 million in USDT linked to pig butchering scams, highlighting the rise in crypto fraud and the need for regulatory measures.
US Federal agents have seized over $61 million worth of USDT linked to a large-scale 'pig butchering' investment scam, targeting victims through deceptive online relationships. According to the US Attorney’s Office for the Eastern District of North Carolina, these scammers posed as romantic partners and claimed to have special trading expertise, luring victims to fake crypto platforms that showcased fictitious investment portfolios with unrealistic returns. Once victims invested, the scammers blocked their withdrawals and demanded additional fees, illustrating the sophisticated nature of these frauds.
The recent seizure is a significant milestone in combating crypto fraud, particularly as it highlights the increasing capabilities of US authorities to trace and freeze stablecoin flows associated with such scams. By leveraging advanced tracking technologies, investigators from Homeland Security Investigations were able to trace the illicit funds across multiple wallets used for laundering before identifying several addresses that still held substantial amounts, leading to the seizure and forfeiture process. This development underscores not only the effectiveness of law enforcement in tackling these sophisticated scams but also the complexities involved in tracking digital currencies.
Tether, the issuer of USDT, played a crucial role in this investigation by cooperating with law enforcement officials. The US Attorney’s Office stated, "The Department of Justice and HSI acknowledges Tether for its assistance in transferring these assets.” This collaboration marks a growing trend where stablecoin issuers are increasingly working with authorities to freeze and recover funds flowing through US dollar-pegged tokens like Tether’s USDT. Such cooperation is vital, especially as the crypto landscape evolves and presents new challenges for both investors and regulators.
The surge in crypto fraud, particularly pig butchering scams, is alarming. Data from Chainalysis indicates that losses from crypto scams reached $17 billion in 2025, with AI-driven impersonation schemes increasing by 1,400% year-on-year. This trend is particularly concerning, as it signals a shift in the tactics employed by scammers, who are blending romance scams with bogus trading opportunities to exploit emotional vulnerabilities. For instance, in December 2025, a Bitcoin investor reported losing his retirement savings after being groomed by an online “trader” who utilized AI-generated images and a fabricated persona to build trust, only to later convince him to move his coins into a fake investment platform.
The implications of these scams extend beyond individual financial losses; they pose a significant risk to the broader financial system as scammers become more sophisticated, blurring the lines between legitimate and fraudulent investment opportunities. The ease with which scammers can create convincing online personas and fraudulent platforms has made it increasingly difficult for average investors to discern between real and fake investment opportunities, leading to a growing need for consumer education and awareness.
Moreover, US prosecutors are increasingly pursuing harsher penalties against perpetrators of these schemes. Recent cases have resulted in substantial prison sentences for key figures involved in crypto laundering operations. For example, a major figure in a pig butchering-linked crypto laundering operation involving over $70 million was sentenced to 20 years in federal prison in February. Such sentences reflect how seriously courts are now treating this category of crime and indicate a growing commitment to holding fraudsters accountable.
As regulatory scrutiny intensifies around crypto fraud, there may be more stringent measures aimed at protecting investors and enhancing the integrity of the crypto market. Lawmakers and regulatory bodies are beginning to recognize the urgent need for regulatory frameworks that can effectively address the unique challenges posed by digital currencies. This growing regulatory focus could lead to more comprehensive consumer protection laws that empower investors and help mitigate the risks associated with crypto investments.
This seizure serves as a stark reminder of the vulnerabilities within the burgeoning crypto landscape. As scams grow more prevalent, the need for robust regulatory frameworks and consumer education becomes ever more pressing. The collaboration between authorities and stablecoin issuers like Tether could set a precedent for future efforts to combat crypto-related fraud and secure investor confidence. The current landscape underscores the importance of vigilance among cryptocurrency users, as well as the need for ongoing dialogue between regulators, law enforcement, and the crypto community to foster a safer investment environment.