In a groundbreaking joint operation, stablecoin issuer Tether has collaborated with Chainalysis, Binance, OKX, and regional law enforcement to freeze nearly $50 million in USDT linked to a sophisticated “pig butchering” scam based in Southeast Asia. This latest development highlights the increasing importance of industry cooperation in dismantling cross-border criminal networks that exploit cryptocurrencies for illicit activities.
Known as “pig butchering” scams, these fraudulent schemes have evolved into a global criminal enterprise that combines elements of investment fraud and human trafficking. Perpetrators lure victims through various means such as social media, dating apps, or unsolicited text messages, establishing relationships before pressuring them into fake investment opportunities involving cryptocurrencies. Simultaneously, traffickers exploit captive laborers to run the scams from compounds.
Chainalysis investigators were able to trace nearly $50 million in stolen USDT through a complex web of addresses, ultimately identifying five main wallets where the funds were consolidated. Victims unwittingly transferred assets into scam-controlled addresses between November 2022 and July 2023, leading to the movement of $46.9 million to intermediary accounts before dispersing into five final wallets.
As part of the operation, Tether froze the funds in June 2024 at the request of Asia-Pacific authorities. This initiative follows a significant case in November 2023, where Tether and OKX collaborated with the U.S. Department of Justice to freeze $225 million in USDT linked to international human trafficking and romance scams. A U.S. judge subsequently authorized the seizure and burning of these assets in June 2024, marking a historic recovery for the Secret Service.
Tether CEO Paolo Ardoino emphasized the company’s commitment to supporting global law enforcement efforts in disrupting pig butchering scams and providing restitution for victims. Binance’s Head of Intelligence and Investigations, Erin Fracolli, underscored the importance of public-private partnerships in combating criminal activities and compensating victims. OKX investigators highlighted the global reach of pig butchering scams and the need for proactive measures to protect vulnerable individuals.
In its broader campaign against illicit finance, Tether reported freezing over 1,850 wallets associated with crimes across 45 jurisdictions in collaboration with 180 agencies. This initiative resulted in the recovery of $1.86 billion in assets, demonstrating Tether’s expanding enforcement capabilities. However, challenges persist, with delays in Tether’s blacklisting process due to a two-step multisignature system creating potential windows for criminals to move funds before freezing takes effect.
Pig butchering scams have emerged as a significant threat to crypto investors, with losses totaling $3.6 billion in 2024, according to a report from Web3 security firm Cyvers. These scams predominantly target users on the Ethereum blockchain, with organized crime groups in Southeast Asia orchestrating the majority of operations. Governments and industry stakeholders are intensifying their efforts to combat these schemes, with recent seizures and partnerships aimed at curbing fraudulent activities.
The collaborative efforts of Tether, Chainalysis, Binance, OKX, and law enforcement agencies highlight the importance of coordinated action in safeguarding the crypto sector from criminal exploitation. By leveraging industry expertise and resources, stakeholders can disrupt illicit networks and protect investors from financial harm.