In one of the largest crypto asset recoveries in U.S. law enforcement history, Coinbase has played a pivotal role in helping the U.S. Secret Service trace and reclaim $225 million in Tether (USDT) linked to widespread “pig butchering” scams.
According to a June 24 announcement by the crypto exchange, Coinbase collaborated with the Secret Service during a four-day “investigative sprint” in February 2024. The exchange provided crucial on-chain analytics and subpoena record support, which ultimately helped agents trace illicit transactions and identify over 130 Coinbase users who unknowingly sent cryptocurrency to scam wallets, representing at least $2.3 million in losses.
The recovery stems from a sweeping fraud investigation that the Department of Justice (DOJ) formalized on June 18. The probe targeted transnational criminal networks operating across Southeast Asia, where victims—many of whom were trafficked—were coerced into running fake investment platforms. These schemes typically exploit online romantic or business relationships to lure targets into transferring crypto funds.
The stolen funds had been frozen in late 2023 after Tether, the issuer of the stablecoin, blacklisted 39 wallet addresses tied to suspicious activity. Blockchain analysis later revealed that many of the wallets were connected to 140 OKX exchange accounts linked to the scam compounds.
Following the freeze, Tether burned the tainted USDT and reissued the tokens to a wallet now controlled by the Secret Service, securing the funds for eventual restitution to victims. Coinbase has since issued a public guide to help affected users submit their transaction records to law enforcement agencies.
This seizure is the latest in a series of enforcement actions targeting the illicit use of USDT. In March, crypto exchange MEXC froze over 1,500 accounts connected to a market manipulation scheme affecting Vietnam and CIS countries. In September 2024, Tether’s T3 Financial Crime Unit—working with TRON and TRM Labs, teamed up to establish a unit dedicated to combating illicit activities associated with Tether’s USDT on the TRON blockchain.
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