Federal authorities confiscate $61M in Tether connected to pig butchering scam
The confiscation of $61 million in USDT by North Carolina authorities demonstrates how federal law enforcement can successfully track and confiscate stablecoin transactions connected to pig butchering fraud operations, even as artificial intelligence-powered impersonation schemes continue their rapid growth.
Federal law enforcement officials operating in North Carolina have confiscated over $61 million in USDt connected to an extensive "pig butchering" cryptocurrency investment fraud operation that targeted victims using fabricated online romantic connections and deceptive trading websites.
Based on information from the US Attorney's Office for the Eastern District of North Carolina in Raleigh released Tuesday, the fraudsters impersonated romantic interests and represented themselves as possessing specialized trading knowledge.
The perpetrators subsequently directed their targets to professionally designed but fraudulent cryptocurrency platforms that displayed fabricated investment accounts showing abnormally high profits that encouraged them to deposit additional funds, after which the fraudsters prevented their withdrawals and requested additional payments when victims attempted to recover their money.
Law enforcement personnel from Homeland Security Investigations followed the victims' assets through numerous digital wallets employed to obscure the illicit proceeds until they located several blockchain addresses that continued to contain significant sums, which authorities then confiscated and designated for forfeiture proceedings.
Federal prosecutors highlighted that Tether provided cooperation during the investigation: "The Department of Justice and HSI acknowledges Tether for its assistance in transferring these assets," according to the official statement, marking another instance of stablecoin companies collaborating with law enforcement to confiscate and retrieve assets moving through US dollar-backed digital currencies such as Tether's USDt (USDT).
Crypto fraud scams on the rise
This recent enforcement action arrives during a period of rapid expansion in cryptocurrency-related fraud, including pig butchering operations that combine romance-based deception with fraudulent investment schemes.
According to Chainalysis' 2026 Crypto Scams report data, cryptocurrency scam-related losses during 2025 totaled $17 billion, with artificial intelligence (AI) powered impersonation and social engineering fraud increasing by 1,400% compared to the previous year and proving significantly more lucrative than conventional phishing or promotional giveaway scams.
In a single case occurring in December 2025, a Bitcoin holder reported losing his entire retirement nest egg after being manipulated by an internet-based "trader" who employed AI-created photographs and a completely fabricated identity to establish credibility before persuading him to transfer his digital assets into a counterfeit investment website.
Federal prosecutors have begun to obtain substantial prison terms against those orchestrating these criminal networks.
During February, a central operator in a pig butchering-connected cryptocurrency money laundering scheme involving more than $70 million received a 20-year federal prison sentence, demonstrating how seriously judicial systems are currently addressing this form of criminal activity.