US authorities plan to return millions in seized crypto to victims of a fake investment scam.
Case Details and Fraud Scheme
Federal authorities in Ohio seek to confiscate $8.2 million in crypto seized from three wallets. These funds are connected to victims' losses in a fraudulent investment scheme. Scammers used a tactic known as 'pig butchering,' where they initiated conversations with victims through random 'wrong number' texts and gained their trust before luring them into fake investment platforms.
How Victims Were Deceived
Victims initially set up legitimate accounts on platforms like Crypto.com and Coinbase. They were then persuaded to move their money to fake investment sites controlled by scammers. Initially, some victims could withdraw small amounts, reinforcing the scam's legitimacy. However, access to their funds was eventually blocked, and scammers demanded additional 'tax' payments.
Investigation and Current Status
A woman from Lake County, Ohio, lost her life savings of $663,000 to such a scheme. She reported the fraud to the FBI in June 2024, prompting an investigation. Through blockchain analysis, authorities traced the stolen crypto to three wallets. With a seizure warrant and Tether's assistance, the funds were frozen and transferred to a law enforcement-controlled wallet. The U.S. Attorney asked the court to formally seize the recovered assets, noting additional amounts linked to money laundering and wire fraud.
US authorities continue to combat the rise of crypto scams like 'pig butchering' and work to return funds to victims.
