Tether Aids DOJ in Recovering 16% of Stolen Cryptocurrency

The U.S. Department of Justice (DOJ) has commended stablecoin issuer Tether for its role in recovering $40,300 in stolen cryptocurrency linked to a fraudulent scheme that impersonated the Trump-Vance Inaugural Committee. The scam, which took place in December 2024, involved impersonators deceiving a political donor into sending $250,300 in USDT on the Ethereum blockchain. The scammers used a deceptive email address, swapping an “I” for a lowercase “L” to mimic the legitimate email of the committee's co-chair, thereby tricking the victim into transferring the funds.

Upon receiving the funds, the scammers quickly moved the assets through multiple wallets within hours. However, law enforcement agencies were able to trace the transactions and successfully recover $40,300 of the stolen cryptocurrency. The DOJ specifically acknowledged Tether for its assistance in facilitating the transfer of these assets, highlighting the company's growing cooperation with law enforcement in freezing and recovering illicit funds.

This case is not the first instance where Tether has aided in the recovery of stolen funds. In June, the DOJ credited the company for its assistance in dismantling a $225 million crypto pig-butchering scheme. Tether has been repeatedly praised by various agencies for its prompt action in freezing suspicious assets and supporting investigations. This proactive approach contrasts with the scrutiny faced by rival stablecoin issuer Circle, which has been accused of overlooking the use of its stablecoin USDC by North Korea-linked hackers and other malicious actors.

On-chain investigator ZachXBT raised concerns about Circle’s compliance standards, noting that despite significant wallet flows tied to sanctioned actors, the company has not taken action to investigate or freeze the involved wallets. This criticism comes as Tether continues to enhance its compliance practices, demonstrating a shift from its previously criticized loose standards to a more proactive and compliant approach. The DOJ's acknowledgment of Tether's assistance in this case underscores the importance of collaboration between law enforcement and cryptocurrency companies in combating financial fraud and protecting victims.