U.S. authorities have seized more than $225 million in Tether (USDT), marking the largest cryptocurrency seizure in the history of the U.S. Secret Service. The funds were confiscated from what prosecutors described as a “sophisticated blockchain-based money laundering network” involved in kidnapping, human trafficking, and other serious crimes.
Major Bust of Crypto Crime Syndicate
The investigation began when global crypto exchange OKX alerted law enforcement to suspicious activity linked to 144 accounts suspected of laundering proceeds from cryptocurrency scams. Further analysis revealed that 434 victims had fallen prey to the network, with about 60 providing interviews to authorities. These victims reported losing roughly $19 million to fraudulent crypto investment schemes posing as legitimate trading platforms.
One notable victim was Shan Hanes, former CEO of Heartland Tri-State Bank, who in 2023 embezzled $47 million from the bank to invest in what turned out to be a crypto scam.
Southeast Asian Scam Compounds and Forced Labor
Federal prosecutors detailed how these criminal operations are largely orchestrated out of Southeast Asia. The schemes are often run from so-called “scam compounds” in Myanmar, the Philippines, Laos, and Cambodia—facilities where human trafficking victims are forced into conducting elaborate online scams via dating platforms, text messages, and other digital channels.
The scope of the network highlights the growing convergence of organized crime, human trafficking, and crypto-based financial fraud across the region.
Network Traced to the Philippines
Although the network operated internationally, authorities found that all 144 suspicious OKX accounts had IP addresses located in the Philippines. Following the seizure of the USDT, several Philippines-based organizations came forward to claim ownership of the frozen assets.
Among these was Infiniweb Technology Inc., an entity flagged in the U.S. Attorney’s complaint for its reported links to Xionwei Technologies. In 2023, Xionwei was implicated in a Philippine congressional report accusing it of involvement in kidnapping and human trafficking. Xionwei, an offshore gambling operator, is also entangled in controversies surrounding former Philippine President Rodrigo Roa Duterte, who faces trial at the International Criminal Court for alleged crimes against humanity.
Also Read: Bank of America Moves Into Stablecoins as TRON Dominates USDT Transfers
The U.S. government’s unprecedented $225 million USDT seizure not only highlights the increasing scale of crypto-related crime but also underscores the international and often exploitative networks driving such schemes. With ongoing investigations and potential criminal prosecutions looming, this case serves as a stark warning to crypto exchanges, investors, and regulators worldwide.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
