Feds Seize $61M in Crypto Tied to Pig Butchering Scams

TLDR

• Pig butchering is the most common scam in crypto.
• The US Department of Justice has recently seized $61 million in USDT related to one of these schemes.
• They were able to track funds with help from Tether, which has frozen over $4 billion in funds to aid law enforcement.

Romance, fake trading platforms, and a whole lot of stolen money. That’s the ugly story behind a major crypto fraud operation that just got taken down by federal agents. It’s a tale we’ve mentioned a hundred times on Dypto Crypto, and it’s one every crypto beginner needs to hear.

On February 24, 2026, the US Attorney’s Office for the Eastern District of North Carolina announced the seizure of over $61 million worth of USDT — a stablecoin pegged to the US dollar. The funds were traced to what investigators describe as a pig butchering scheme: a type of scam that involves fake romance or fraudulent cryptocurrency investment platforms. Sometimes, it’s a bit of both. Let’s get after it.

What Is a Pig Butchering Scam?

The name is disturbing, but the concept is worth understanding. Pig butchering refers to the process of fattening up a pig before slaughter. In this context, the pig is the victim. It’s the number one scam for stealing crypto, according to one report from AMLBot.

Scammers typically reach out through social media, dating apps, or messaging platforms, posing as a romantic interest or a friendly stranger. Over days or weeks, they build trust and establish an emotional connection. Then, once they’ve reeled the victim in, they introduce the idea of a can’t miss cryptocurrency investment opportunity.

Victims are directed to fake trading platforms that look almost identical to legitimate ones — same name, same layout, same interface. These platforms display fabricated portfolio returns, showing massive gains to convince the victim to keep depositing more money.

When victims eventually try to withdraw their funds, the scammers stall. They might demand a tax or a processing fee before releasing the funds. Of course, the funds never come. And once the victim stops paying, the scammers vanish.

How the $61 Million Was Traced

This particular case began when a victim reported alleged investment fraud through the Homeland Security Investigations (HSI) Tip Line in Raleigh, North Carolina.

From there, HSI agents and analysts got to work tracing the stolen funds. Cryptocurrency transactions are recorded on a public blockchain, which means investigators can follow the money even when scammers try to cover their tracks by routing funds through dozens of different wallets.

In this case, the money moved through multiple cryptocurrency wallets to obscure its origin. But agents tracked it through every hop, ultimately locating wallets that still held large amounts of stolen funds. Those funds, over $61 million in USDT, were seized and are subject to forfeiture.

Tether, the company behind the USDT stablecoin, was officially acknowledged by the DOJ for assisting in the asset transfer. This isn’t the first time Tether has helped law enforcement. 

To date, the company has frozen around $4.2 billion in assets linked to illicit activity, working with over 310 law enforcement agencies across more than 64 countries.

“Tether’s cooperation with the Department of Justice highlights the need for blockchain transparency to empower law enforcement to act quickly and effectively against criminal activity,” said Paolo Ardoino, CEO of Tether.

Why Crypto Beginners Are a Target

Pig butchering scams are designed to exploit people who don’t yet know how crypto works. If you’re new to digital assets, here’s the hard truth: scammers are counting on your excitement and your trust.

Common red flags include:

• Someone you met online is pushing a “guaranteed” investment opportunity. Legitimate investments don’t come with guarantees, especially in crypto.
• A platform you’ve never heard of that promises unusually high returns. If the numbers look too good to be true, they are.
• Pressure to deposit more money before you can withdraw. This is the classic pig butchering trap.
• Fake fees are required to release your funds. No legitimate platform charges a tax to let you access your own money.

The emotional manipulation is what makes these scams so effective. By the time the victim realizes something is wrong, they’ve often invested a ton of money.

What Users Should Do to Stay Safe

Protecting yourself from crypto fraud doesn’t require advanced knowledge. A few basic habits go a long way.

Only use regulated, reputable platforms. Before depositing any money, verify that the platform is legitimate. If you can’t find anything, that’s a red flag.

Be skeptical of unsolicited investment advice. Whether it comes from a new online friend, a stranger in a Telegram group, or even someone claiming to be a crypto expert — always question who’s giving you advice and why. Scammers invest time and effort into earning your trust before making their move.

Never share your wallet credentials. Your private keys and wallet passwords are yours alone. No legitimate exchange, platform, or support team will ever ask for them.

If you suspect you’ve been targeted by a crypto scam, report it. In the US, you can file a report with the FBI’s Internet Crime Complaint Center (IC3) or through the HSI Tip Line, which is exactly how this $61 million seizure got started.

Crypto and Law Enforcement Are Getting Better at This

And that’s a good thing! One of the biggest misconceptions about crypto crime is that it’s untraceable. That is not the case at all.

Blockchain technology creates a permanent, public record of every transaction. While scammers try to obscure their tracks by bouncing funds between wallets, skilled investigators can follow that trail. 

Crypto is full of genuine opportunity. But it also attracts bad actors who prey on people who are just getting started. The $61 million seizure in North Carolina is a reminder that scams are sophisticated, emotionally manipulative, and devastatingly effective.

The best defense is education. Understand how the technology works, know the warning signs of fraud, and only invest through platforms you’ve done your homework on. If you’re just starting out, take it slow. There’s no rush, and no legitimate opportunity will disappear overnight.