US Aims to Retrieve $12M USDT Connected to Crypto asset Investment Fraud
Prosecutors in Albany are pursuing over $12 million in USDT, which they claim was linked to a cryptocurrency investment fraud. They have initiated a civil forfeiture action to reclaim the funds. This further indicates that authorities are addressing crypto fraud in a manner consistent with traditional financial crimes.
Details of the Scam
The fraud started with unsolicited text messages advertising lucrative investment options. These messages directed victims to a counterfeit trading website known as ShakepayEX. The network was designed to resemble a legitimate Canadian digital currency exchange, but it was fake. Individuals who made deposits were then subjected to phony fees and hurdles when attempting to withdraw their funds. Many were instructed to deposit additional money before being able to retrieve their own funds. In total, over $10 million was siphoned from unwitting users.
US DOJ Moves to Reclaim $12M in USDT Linked to Crypto Scam. Civil forfeiture has emerged as “one of the most vital tools in crypto investigations,” for retrieving funds and disrupting unlawful acts.
— Crypto News
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The Rationale for Civil Forfeiture
To retrieve the stolen cryptocurreny, the government is implementing civil forfeiture. This method permits them to confiscate assets believed to be associated with criminal acts, even in the absence of a criminal conviction. It has become a prevalent strategy in cases of crypto fraud. The underlying principle is straightforward: secure the assets before they disappear and endeavor to return them to their rightful owners.
Part of a Broader Trend
This is not the first instance of the Justice Department utilizing this tactic. Earlier this year, it initiated a comparable action regarding $225 million in USDT associated with pig butchering scams. That marked the largest USDT seizure documented to date. During that instance, law enforcement collaborated with Tether and distributed ledger analysts to trace and freeze the funds. Similar cooperation is now occurring again in this situation.
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Ensuring Civil Forfeiture Benefits Victims
Civil forfeiture was primarily regarded as a means to prevent criminals from utilizing illicit funds. Now, it is also evolving into a method for providing victims a means of recovery. By quickly identifying and freezing suspicious wallets, authorities can stop stolen assets from being transferred through mixers or cashed out. If the courts authorize the forfeiture, those assets can ultimately be returned to individuals who suffered losses.
Next Steps
The upcoming phase is for the courts to determine if the confiscated funds are definitively linked to unlawful activities. If so, the government may legally assume possession of the assets. This would pave the way for compensating victims. Additionally, this case contributes to wider efforts aimed at enhancing the security of crypto markets. Prosecutors are bullish that robust enforcement, in tandem with quicker partnership among platforms, will prevent future scams from escalating to this magnitude.
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Key Takeaways
- Federal prosecutors are working to recover over $12 million in USDT linked to a fraudulent crypto site named ShakepayEX.
- Victims were misled through random texts and duped into transferring funds to a bogus trading network that imitated an authentic network.
- The government is leveraging civil forfeiture to freeze and reclaim assets, even without a criminal conviction.
- This case follows a significant $225 million USDT forfeiture earlier this year, highlighting a growing trend in addressing crypto scams.
- Authorities hope civil forfeiture will emerge as a dependable means for assisting victims in retrieving stolen digital currency funds.
The post US Seeks to Recover $12M USDT Tied to Crypto Investment Scam appeared first on 99Bitcoins.
