Coinbase Aids US Secret Service in $225 Million Crypto Scam Recovery

Coinbase has confirmed that it assisted the US Secret Service in recovering over $225 million in cryptocurrency connected to a large-scale scam operation uncovered in 2023. The exchange revealed that its team played a key role in tracing crypto movements and identifying victims impacted by one of the most significant fraud cases involving digital assets**.**

ContentsFederal investigation uncovers international scam networkCoinbase tracks transactions and identifies victimsPig butchering and other crypto scams surge in 2024The case centers around a scam network behind a “pig butchering” scheme that targeted victims worldwide. The fraud involved criminals posing as crypto investors online to deceive individuals into depositing funds into fake investment platforms. The recovered assets mark the largest crypto seizure in US Secret Service history.

Federal investigation uncovers international scam network

In December 2023, Tether froze approximately $225 million worth of USDT after suspecting the funds were linked to a human trafficking ring. The scam operated through romance-based deception, where fraudsters gained victims’ trust before convincing them to invest in false crypto ventures. The Secret Service worked alongside the FBI and the US Attorney’s Office to investigate the case, identifying dozens of victims in the US and more than 400 worldwide.

Investigators used blockchain analytics and forensic techniques to examine hundreds of thousands of transactions. Their goal was to determine if the assets were involved in theft or money laundering, as the scammers attempted to obscure the origins of the funds using complex transaction trails.

## Coinbase tracks transactions and identifies victims

Coinbase stated that its team spent several days analyzing crypto transactions tied to the scam. The exchange helped trace funds from illicit wallets back to sources on its platform and flagged accounts involved in the case. This effort allowed authorities to identify specific victims eligible for restitution. The company also encouraged individuals who suspect they were affected to file a report with the FBI’s Internet Crime Complaint Center.

The partnership emphasizes the increasing role of public-private partnership with regard to combatting crypto-related offenses. It also portrays the potential of the blockchain analytics of the recovery of cryptocurrencies that are stolen.

Pig butchering and other crypto scams surge in 2024

Scam activity in the crypto space has grown significantly this year. A report from Chainalysis shows a 210% increase in deposits to pig butchering scams in 2024, though the average deposit amount dropped by over half. The trend suggests scammers may be prioritizing volume over high-value targets.

There is also a boom in address poisoning, crypto drainers, and blackmail scams. A May attack was one of the biggest ones and it almost caused an investor to lose more than 68 million wrapped Bitcoins before they were returned.