Coinbase has announced its significant contribution to the seizure of $225 million in cryptocurrency connected to cybercrime, thanks to its collaboration with law enforcement agencies.
Fraud Scheme and Fund Seizure
The seized funds were primarily in USDT, a stablecoin pegged to the value of the U.S. dollar. In December 2023, Tether froze approximately $225 million in crypto after being alerted that the money might be tied to criminal activity. The wallets holding the funds were believed to belong to a human trafficking group running a scam known as "pig butchering," in which scammers trick people into fake online relationships and convince them to send money.
Coinbase's Role in the Investigation
Last week, the U.S. Secret Service, FBI, and U.S. Attorney's Office officially filed an order to seize the funds. Coinbase stated that it worked closely with investigators, using blockchain tools to track the movement of the cryptocurrency and analyze account activity linked to its platform. "Coinbase team members conducted a multi-day effort to trace millions in cryptocurrency transactions back from illicit wallets to the sends from our platform and analyze account activity to flag victims," said the company in its announcement.
Support from Tether and Conclusions
U.S. Secret Service Special Agent in Charge Shawn Bradstreet noted that this was the largest crypto seizure in the agency's history. The Department of Justice also thanked Tether for taking swift action to freeze the funds early in the investigation. Tether confirmed its commitment to fighting crime and assisting law enforcement, stating that it has frozen over $2.7 billion in crypto tied to illegal activity.
The information regarding this seizure highlights the importance of cooperation between cryptocurrency platforms and law enforcement in combating cybercrime. Coinbase encouraged anyone who believes they were tricked by the scam to report to the FBI's Internet Crime Complaint Center.
