Coinbase Aids U.S. Secret Service in Seizing $225 Million in Stolen Crypto

Crypto exchange Coinbase played a pivotal role in assisting the U.S. Secret Service in tracking and seizing $225 million in stolen cryptocurrency. This significant operation was linked to a global fraud scheme involving human trafficking and romance scams, commonly known as “pig butchering” scams. These scams lure victims into fake online relationships and financial schemes, resulting in substantial losses.

The seized funds, primarily held in the stablecoin USDT, were frozen in December 2023 by Tether after authorities identified connections to the fraudulent syndicate. Coinbase collaborated closely with investigators to trace the stolen crypto onchain and identify victims eligible for restitution. This involved a multi-day analysis of wallet activity and transaction flows originating from its platform.

Special Agent in Charge Shawn Bradstreet of the U.S. Secret Service highlighted the significance of this operation, stating that it marked the largest crypto seizure in the agency's history. The FBI and the U.S. Attorney’s Office also played crucial roles in the case. Tether, the issuer of USDT, emphasized its commitment to working with law enforcement and monitoring suspicious activity, claiming to have frozen over $2.7 billion in tokens tied to criminal use cases since its launch.

Coinbase directed potential victims to file a claim through the FBI’s Internet Crime Complaint Center. The Department of Justice (DOJ) indicated its intention to return the funds to victims, although no specific timeline for restitution has been provided. More than 400 people are believed to have lost millions through fake crypto investment platforms, according to the complaint.

The FBI reported that crypto investment fraud led to more than $5.8 billion in losses in 2024. Overall, Americans lost over $9.3 billion to scams involving digital assets last year, according to data from the agency’s Internet Crime Complaint Center. On the same day as the DOJ’s announcement, officials in New York reported seizing $140,000 and freezing another $300,000 in connection with a similar investment scheme that ran fake ads on social media. That case involved over 300 victims and more than $1 million in losses.

This operation underscores the growing importance of cryptocurrency in financial crimes and the need for robust collaboration between law enforcement and private sector entities. The seizure highlights the effectiveness of Coinbase's tools and expertise in tracking and recovering stolen digital assets, demonstrating the company's commitment to supporting law enforcement efforts in the fight against cybercrime. The successful recovery of $225 million in stolen cryptocurrency is a testament to the evolving landscape of financial crime and the critical role that technology and collaboration play in mitigating its impact.