DOJ Seizes $225 Million in Crypto Linked to Pig Butchering Scams

The U.S. Department of Justice has seized $225 million in cryptocurrency linked to pig butchering scams, emphasizing the funds were stolen from victims. This action is part of a broader strategy under Matthew Galeotti to address crypto crimes impacting everyday people and communities. The collapse of Heartland Tri-State Bank in Kansas, tied to embezzlement and crypto scams, highlights the real-world impact of these crimes.

Phil Selden, a member at Cole Schotz PC and former acting U.S. Attorney for the District of Maryland, noted that the seizure sends a clear message: the Department of Justice is prioritizing the protection of fraud victims. Selden described the seizure as a tone-setting case, indicating that the DOJ is proactive in ensuring that stolen crypto is seized and returned to its rightful owners, even before arrests are made.

Selden highlighted that this approach sets the direction for the Department of Justice under Matthew Galeotti, the new head of its criminal division. Galeotti, known for his experience in taking down organized crime rings, understands how criminal networks move money and exploit weak regulatory frameworks, ultimately hurting everyday people. This isn't just a tech or finance story, but a narrative about families losing their savings and small towns losing their banks.

The collapse of Heartland Tri-State Bank serves as a stark example. The bank became illiquid and collapsed in 2023 after its CEO, Shan Hanes, embezzled nearly $50 million and moved the funds to crypto wallets at the direction of pig butchering scammers. Hanes was also the largest victim in the DOJ's complaint, underscoring the severe impact of these crimes on local communities.

Selden anticipates that criminal charges are on the horizon, but the DOJ did not want to wait for an arrest to ensure the crypto was seized and could be returned to its owners. Extradition of overseas suspects is one possible path, though it's a slow and complicated process. Another strategy could involve luring suspects into U.S. jurisdictions where arrests are easier to carry out.

Even without arrests, extraditions, and high-profile trials, Selden believes the case has already done its job. It sends a message to victims that their losses are being taken seriously. Crypto crime isn't abstract or offshore; it's impacting real people and real communities, and the Department of Justice wants Americans to know it has their backs.