Coinbase said on Tuesday that it played a key role in helping the U.S. Secret Service seize $225 million in stolen cryptocurrency.
The funds date back to 2023 and were linked to a human trafficking group running a romance fraud. Coinbase traced the funds on the blockchain, worked with law enforcement to identify victims, and flagged accounts for restitution.
Tracing the Stolen Funds
Last week, the U.S. Secret Service, Federal Bureau of Investigation and the U.S. Attorney’s Office filed an order to seize roughly $225 million in crypto from alleged fraudsters.
In December 2023, Tether froze approximately $225 million of USDT held in self-custodial wallets associated with a “pig butchering” scam. Investigators say that the scheme lured victims into fake relationships before stealing their money.
Coinbase staff spent several days tracing transactions back to their origin. They matched the illicit wallets to transfers sent from Coinbase accounts. The company then analysed account activity to spot victims who may qualify for compensation.
“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 analyse account activity to flag victims,” the firm said in a statement.
U.S. Secret Service Special Agent in Charge Shawn Bradstreet called it the largest crypto seizure in the agency’s history. The Department of Justice also thanked Tether for quickly freezing the funds early in the probe.
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Tether’s Ongoing Fight Against Crime
Tether stated that its action demonstrates its commitment to combating financial crime and supporting law enforcement.
The company noted that crime in the crypto world keeps growing in both scale and complexity. To date, Tether has frozen more than $2.7 billion in assets tied to illegal activity.
“As the scale and sophistication of crypto-related crime continue to evolve, Tether’s commitment to safeguarding users and supporting global enforcement efforts has set a new benchmark for financial security in the digital asset ecosystem,” the company said.
Binance Joins Forces on Ransom Case
In a separate case, Binance’s Financial Intelligence Unit worked with the Philippine National Police to trace a $3.75 million ransom payment.
The suspects sent money through private casino junket operators before converting it to crypto. By sharing on-chain data, Binance helped law enforcement officers pinpoint suspects and follow the money across multiple platforms.
European License and New Headquarters
Last week, Coinbase announced its work with U.S. authorities, the company revealed it won a Markets in Crypto Assets licence from Luxembourg’s financial regulator.
This licence will allow Coinbase to offer a wider range of services across Europe under EU rules. As part of the move, Coinbase will shift its regional headquarters from Ireland to Luxembourg.
Company leaders said the licence marks a big step in their plan to expand in Europe. They believe Luxembourg’s clear rules on digital assets will help protect customers and build trust in the market.
What Comes Next?
Coinbase encouraged anyone who believes they were tricked by the scam to file a report with the FBI’s Internet Crime Complaint Center at IC3. Victims who come forward may recover some of their stolen funds.
Both Coinbase and Tether say they will keep working with law enforcement around the world to fight fraud. As regulators press for more oversight, crypto firms appear ready to help track bad actors and safeguard users.