Coinbase Aids Secret Service in Record $225M Crypto Scam Bust
Crypto exchange Coinbase has confirmed its pivotal role in the U.S. Secret Service’s largest-ever crypto seizure, helping authorities confiscate $225 million linked to global online scams.
Secret Service Cracks Down on “Pig Butchering” Scam Network
In a landmark enforcement move, the U.S. Department of Justice (DOJ) on June 18 filed to seize more than $225 million in cryptocurrency allegedly stolen through “pig butchering” scams—a form of digital fraud where victims are deceived into transferring large sums under the pretense of romantic or investment relationships.
Shawn Bradstreet, Special Agent in Charge at the U.S. Secret Service (USSS), said the seizure is now the largest crypto confiscation in the agency’s history.
Coinbase Traces Millions in Stolen Crypto
In a statement released Tuesday, Coinbase revealed it had worked closely with the Secret Service and several other exchanges in what it described as an “investigative sprint” to track scam operations and identify victims.
Between February 26 and 29, 2024, Coinbase’s team conducted blockchain forensics to trace illicit transactions across wallets. This work enabled the Secret Service to uncover over 130 Coinbase customers who had been unknowingly defrauded, with combined losses totaling $2.3 million.
“This blockchain analysis and subpoena records production allowed the USSS to identify more than 130 Coinbase customers who were unknowingly defrauded,” the company stated.
Tether Freezes and Burns $225M in USDT
The $225 million in seized funds primarily involved USDT, a stablecoin issued by Tether. In collaboration with U.S. authorities, Tether froze 39 wallet addresses holding the funds back in 2023 and later burned the tokens, effectively removing them from circulation.
The same amount in new USDT was subsequently reissued and transferred to a wallet under Secret Service control, with the full process visible on-chain.
“This process was visible onchain, offering a real-time example of how crypto can enhance transparency in law enforcement operations,” Coinbase emphasized.
Funds Linked to Scam Compounds in Southeast Asia
Coinbase also revealed that some of the frozen assets were traced to 140 accounts on OKX, a competing crypto exchange. Many of these accounts, according to the company, were connected to individuals detained at scam compounds in Southeast Asia—notorious hubs for forced labor and online fraud operations.
Global Agencies Increasingly Seizing Illicit Crypto
This seizure adds to a growing list of international crypto crackdowns:
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In May, the Australian Federal Police confiscated nearly 25 Bitcoin, then worth $2.6 million, connected to a 2013 hack involving a French crypto exchange.
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Earlier, in February, German police seized €34 million ($38 million) in digital assets tied to a laundering ring operating via the eXch platform. The funds were reportedly linked to the $1.4 billion Bybit hack.
