Tether, Binance, Chainalysis aid $47m pig butchering crackdown in APAC

Following a joint investigation with Chainalysis, OKX, Tether, and Binance, law enforcement in the Asia-Pacific region froze millions of dollars linked to pig butchering scams.

Authorities froze almost $47 million in USDT after investigators traced victim deposits to crypto scam wallets operating out of Southeast Asia. Per the official report, investigators used Chainalysis’ blockchain tracing tools to follow funds from victims across dozens of addresses, uncovering transfers made between November 2022 and July 2023 to pig butchering wallets controlled by scammers.

In some cases, victims made multiple transfers within a single month, while others continued sending funds for as long as seven months into the same fraudulent addresses.

The stolen funds, amounting to about $46.9 million, in USDT (USDT) were initially consolidated in a single wallet, before being spread across five wallets. To maintain credibility with victims, scammers sent back small amounts, about $63,900 in one instance, to make the fake investments appear real. 

Once the scam network was mapped, Chainalysis shared intelligence with exchanges and regional authorities. Acting on this, stablecoin issuer Tether froze the funds in June 2024, with Binance and OKX helping confirm links between the wallets and scam activity.

https://twitter.com/chainalysis/status/1961096850469240849?ref_src=twsrc%5Etfw” target=”_blank

This action follows a similar U.S. case in late 2023, when Tether and OKX assisted the Department of Justice in freezing $225 million in USDT linked to human trafficking and romance scams. The seizure became one of the largest crypto cases in the agency’s history, with the funds eventually recovered a few months ago to provide restitution for victims.

What are pig butchering scams?

Pig butchering, sometimes called “romance” or “investment” scams, involves criminals building long-term relationships with victims, often through dating apps or random text messages. Once trust is gained, victims are persuaded to invest in fake opportunities, including fraudulent crypto schemes, before the scammers cut off all contact.

The illicit funds are usually laundered through various channels before being cashed out. The name “pig butchering” comes from the way fraudsters “fatten up” victims with trust before “slaughtering” them financially. 

Initially targeting Asian victims, these schemes now reach victims worldwide, with losses running into billions annually. In 2024, pig butchering scams wiped out $3.6 billion from the crypto industry, making them one of the biggest threats to the industry. 

Need for strong security measures to combat crypto scams

Beyond pig butchering scams, the crypto industry faces a wider range of threats from malicious actors. So far this year, losses from various scams and hacks have exceeded $3.1 billion. Despite the recoveries and crackdowns on these networks, the consistent trend of attacks, particularly as malicious actors adapt their tactics, highlights the need for stronger defenses. 

Educating users and strengthening industry-wide security practices are crucial to reducing exposure, and continued collaboration between industry members and law enforcement is essential to create a powerful front and ensure a safer crypto ecosystem.