(Bloomberg) -- The US government seized almost $9 million worth of Tether tokens traced to an organized network of scammers who stole millions from victims across the country.
The Justice Department said the crackdown was tied to scams commonly known as “pig butchering,” where the organization exploited more than 70 victims by creating non-existent crypto trading platforms.
The announcement came a day after Tether Holdings Ltd. said it froze approximately $225 million in holdings of its USDT cryptocurrency amid an investigation into an international human trafficking group. Tether collaborated with the Justice Department, the company said in a Monday, along with crypto exchange OKX.
“Pig-butchering” is a scheme in which scammers fatten up a victim’s trust over time with a pretend romantic or personal relationship and made-up investment gains, before taking the money and vanishing. The Financial Crimes Enforcement Network, an arm of the US Treasury, issued a warning this year over the prevalence of such crimes, which has led to billions in losses among US victims.
A Tether spokesperson didn’t immediately respond to questions on whether its $225 million token freeze was connected to the Justice Department’s announcement.
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Stablecoins like USDT are cryptocurrencies that aim to maintain a one-to-one value with more stable assets like the US dollar. They can be used by traders to buy other tokens or store wealth in digital wallets, before being cashed out for real money on exchanges.
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