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Feds Seize $61 Million in Tether Linked to ‘Pig Butchering’ Crypto Scams

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Feds Seize $61 Million in Tether Linked to 'Pig Butchering' Crypto Scams


A tip to Homeland Security unraveled a multi-wallet laundering scheme, which ultimately resulted in a $61 million Tether confiscation.

US federal agents have seized more than $61 million worth of USDT. Investigators traced the seized funds to cryptocurrency addresses allegedly linked to the laundering of criminal proceeds obtained through “pig butchering” schemes.

According to the official press release, the funds were connected to scams in which victims were recruited and manipulated into transferring money under false pretenses.

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Romance, Fake Profits, and $61M in USDT

Court filings state that criminal actors targeted victims by establishing trust and often posed as romantic partners. After gaining victims’ confidence, the scammers claimed to have specialized knowledge or techniques that could generate massive profits through cryptocurrency trading.

Victims were directed to fraudulent cryptocurrency trading platforms that closely resembled legitimate platforms in name and appearance. These fake platforms displayed fabricated investment portfolios and showed unusually high returns in order to encourage victims to invest increasing amounts of money.

When victims attempted to withdraw their funds, they were unable to do so and were frequently told they needed to pay additional “taxes” or “fees” to release their assets. According to authorities, these tactics were used to extract more money from victims.

Once funds were transferred to cryptocurrency wallets controlled by the scammers, the money was rapidly moved through multiple wallets to conceal its source, ownership, and control. In this case, Homeland Security Investigations (HSI) agents and analysts in Raleigh received a complaint through the HSI Tip Line and traced the victim’s funds through several cryptocurrency wallets involved in the alleged fraud and money laundering scheme.

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Authorities also revealed that some of those wallets still held significant amounts of victims’ funds, making them subject to seizure and forfeiture.

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Crackdowns

Tether has been involved in several financial crime investigations in coordination with international law enforcement agencies. The stablecoin issuer has assisted efforts to track, freeze, and support the seizure of illicit funds. On July 22, 2025, the US Department of Justice announced a civil forfeiture action against Buy Cash Money and Money Transfer Company that involved freezing and reissuing $1.6 million in USDT allegedly tied to Gaza-based terror financing.

In June 2025, Brazilian authorities recognized Tether’s assistance in blocking approximately $6.2 million, connected to a cross-border money-laundering scheme conducted through Klever Wallet. Also in June 2025, the Department of Justice and OKX enabled a civil forfeiture complaint seeking to seize roughly $225 million in USDT allegedly linked to pig butchering investment scams. In March 2025, the United States Secret Service froze $23 million in funds associated with transactions on the Russian-sanctioned exchange Garantex.

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Crypto World

CFTC Staff Share FAQ on Crypto Collateral

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CFTC Staff Share FAQ on Crypto Collateral

The US Commodity Futures Trading Commission has given more details on its expectations for the use of crypto as collateral amid a pilot program that the agency launched last year.

In a notice on Friday, the CFTC’s Market Participants Division and Division of Clearing and Risk responded to frequently asked questions that emerged from two staff letters issued in December that established a pilot allowing crypto to be used as collateral in derivatives markets.

The notice reminded futures commission merchants wanting to take part in the pilot that they must file a notice with the Market Participants Division “which includes the date on which it will commence accepting crypto assets from customers as margin collateral.”

The crypto industry has argued that crypto technology is best suited for 24-7 trading and instant settlement, and the CFTC’s guidance in December clarified what tokenized assets can be used as collateral, along with how to value them and calculate how much is needed for a trading position.

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CFTC aligns guidance with SEC

The CFTC made clear its guidance was to align with the Securities and Exchange Commission, as the two agencies work together on a regulatory framework for crypto.

The CFTC said that capital charges, the amount that must be held to cover losses, would be “consistent with the SEC” and that futures commission merchants should apply a 20% capital charge for positions in Bitcoin (BTC) and Ether (ETH), while stablecoins should get a 2% charge.

Source: Mike Selig

The notice added that futures commission merchants taking part in the pilot can only accept Bitcoin, Ether, or stablecoins for the first three months and must give prompt notice of any significant cybersecurity or system issues. They must also file weekly reports of the total crypto held across customer account types.

After the three-month period, other cryptocurrencies can be accepted as collateral and the reporting requirements will end.

Related: SEC interpretation on crypto laws ‘a beginning, not an end,’ says Atkins

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The notice also clarified that “only proprietary payment stablecoins may be deposited as residual interest in customer segregated accounts” and that futures commission merchants can’t accept other cryptocurrencies for that purpose.

The CFTC said that crypto and stablecoins cannot be used for collateral of uncleared swaps, but swap dealers can use tokenized versions of an eligible asset if it meets regulatory requirements and grants the holder the same rights in its traditional form.

Meanwhile, derivatives clearing organizations can accept crypto and stablecoins as initial margin for cleared transactions if they meet CFTC requirements regarding minimal credit, market, and liquidity risks.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

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