DOJ and Tether Recover $3.3M in Crypto Scam Crackdown: How Fraudsters Targeted Victims
In a major win against cryptocurrency fraud, the U.S. Department of Justice (DOJ) announced it has recovered over $3.3 million in digital assets linked to a network of online investment scams. The announcement, made on May 23, underscores ongoing efforts to disrupt cybercriminals exploiting the crypto space.
A federal judge approved the forfeiture of approximately $2.5 million in cryptocurrency, with an additional $868,000 seized in a separate but related case. The DOJ confirmed that the funds were tied to highly coordinated investment scams designed to manipulate unsuspecting victims into handing over their money.
These fraud schemes often start innocently enough: a text message, a dating app match, or a connection request on a professional networking platform. From there, scammers engage victims in conversation, build trust over days or weeks, and ultimately introduce what appears to be a promising crypto investment opportunity.
Victims are typically directed to what look like legitimate trading platforms. In reality, these are fake websites designed to mimic reputable crypto exchanges, all under the scammers' control. The scheme involves convincing individuals to transfer money from their bank accounts to real crypto exchanges, then to move those assets onto the fraudulent platforms.
In some cases, the sites even show phony profits and allow minor withdrawals to build credibility. But once larger amounts are deposited, victims are cut off from access, and the scammers disappear with the funds.
“These scams don’t just drain bank accounts — they devastate lives,” said FBI Special Agent Stacey Moy. “They prey on trust, isolating victims and leaving them with little recourse once the fraud is complete.”
The DOJ also credited Tether, the company behind the USDT stablecoin, for its role in the investigation. Tether has collaborated with law enforcement to help trace and freeze illicit funds, a practice the firm has consistently supported over the years.
This case is part of a broader push by federal agencies to crack down on crypto-related crime. As digital assets continue to enter the mainstream, regulators and tech partners alike are ramping up efforts to protect consumers and shut down abuse of decentralized finance.