Crypto Scam: U.S. Authorities Move to Seize $3.4M in Tether Linked to Fraud Scheme

Key Insights:

• U.S. prosecutors seek forfeiture of 3,444,470 USDT tied to a multi-state crypto scam targeting victims.
• Scammers used fake ETH investment offers backed by gold to persuade victims to transfer funds.
• Authorities continue seizing USDT linked to fraud, including cases worth $327K and over $61M.

Crypto scam investigators in the United States have moved to seize approximately $3.44 million in USDT, the stablecoin issued by Tether, that authorities say is tied to an online investment fraud operation.

Federal prosecutors filed a civil forfeiture action seeking control of the digital assets after investigators linked the funds to a scheme that targeted victims in several states.

The announcement came from the U.S. Attorney’s Office in Boston. Prosecutors said law enforcement seized 3,444,470 USDT in February and March 2025 as part of an investigation into an alleged crypto scam.

Authorities stated that scammers persuaded victims to transfer cryptocurrency to wallets controlled by the perpetrators. Investigators said the funds were later moved through intermediary wallets and converted into USDT before being transferred to noncustodial addresses.

Officials said the investigation began in late 2024 after at least four individuals reported losses. The victims included two residents of Massachusetts and individuals living in Utah and South Carolina.

The prosecutor explained that fraud schemes often rely on manipulation and trust-building. According to authorities, the perpetrators build online relationships before persuading their victims to invest in fraudulent cryptocurrency opportunities.

Fake ETH Investment Scheme Used in the Crypto Scam

Investigators said the crypto scam began with messages that appeared to be sent by mistake. The initial contact often occurred through text messages or encrypted platforms such as WhatsApp and Telegram.

After communication started, the individuals behind the scheme gradually built trust with the victims. Authorities said the perpetrators then introduced what they described as an exclusive Ethereum investment opportunity.

The scammers allegedly said the investment program was supported by physical gold. Victims believed the opportunity was legitimate and acted on instructions given during online conversations.

Investigators stated that the victims bought Ether (ETH) and transferred the money to wallet addresses provided by the scammers. Court documents state that the perpetrators controlled these intermediary wallets.

Crypto scam involving Tether/Source: DOJ

Once the ETH arrived, investigators said the funds were sent to other addresses. Authorities said the perpetrators then converted the cryptocurrency to USDT.

According to prosecutors, the converted Tether stablecoins were transferred to unhosted wallets controlled by the scheme’s operators. Investigators said this process enabled the perpetrators to hide the movement and ownership of the funds.

Officials said federal law bans the use of wire communications to commit fraud. Authorities also said that financial transactions that are intended to disguise the proceeds of a crime violate federal laws against money laundering.

U.S. Authorities Increase Seizures of USDT Linked to Fraud

The civil forfeiture action allows the government to seize assets linked to alleged criminal activity. Courts must first resolve any third-party claims before authorities can permanently forfeit the funds.

Prosecutors claimed that the seized 3,444,470 USDT might eventually be returned to victims when the legal process finishes. The case is one of several forfeiture cases stemming from crypto fraud investigations in Massachusetts.

In another instance, the U.S. Attorney’s Office previously filed proceedings to recover roughly $327,829 in USDT stemming from a romance scam involving a Massachusetts resident in 2024. In that instance, investigators linked it to fraudulent communications that induced the victim to transfer digital assets.

Authorities have also implemented broader enforcement measures regarding stablecoins. In North Carolina, federal investigators seized more than $61 million in USDT associated with a massive pork butchering investment scheme.