Crypto scam organization disrupted through seizure of nearly $9M

(KRON) – The seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U.S. dollar, was traced to cryptocurrency addresses allegedly associated with an organization that exploited over 70 victims through romance scams and cryptocurrency confidence scams, the Justice Department announced Tuesday.

“The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams. This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. 

According to court documents, criminal actors collaborated to target victims and convince the victims to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. However, the purported firms and cryptocurrency exchanges were non-existent trading platforms. 

Agents and analysts from the U.S. Secret Service were able to trace those victim deposits and observed that the funds were laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, a money laundering technique often referred to as “chain hopping,” according to the Department of Justice. 

“This seizure is the culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of fraud and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”