US gov’t chasing USDT held on Binance after $1M pig-butchering scam

Date: 2024-06-11T17:23:52+00:00

Location: protos.com

The US has launched a forfeiture complaint against almost $200,000 worth of tether (USDT) held on Binance in connection to pig-butchering scams that stole over $1 million. That’s according to documents filed in the District Court of Columbia.

The court claims that the USDT represents the proceeds of “wire fraud, wire fraud conspiracy, money laundering, and money laundering conspiracy.” 

According to the documents submitted on June 7, an anonymous victim of two pig-butchering scams, reported to the police that they had lost roughly $1.1 million between January 2021 and December 2022. 

The victim first developed a romantic relationship with a scammer known as Eva Markus on Facebook Dating, believing they were an engineer and diamond mine owner. Markus convinced the victim her diamond mine had exploded and that she needed the funds to hire an attorney to return to America. The victim transferred more than $400,000.

Read more: Another Chinese money laundering scheme tied to Deltec and Tether

The victim then started a second romantic relationship with another woman on Facebook Dating claiming to be called Lisa Warren. Warren claimed to invest in crypto and convinced the victim, who was looking to recoup their losses from Markus, to send her $55,000 in bitcoin as an investment.

The victim was then persuaded to sell their home and hand over the profits as a crypto investment, altogether sending roughly $600,000 in crypto. However, after some digging and recovering only $15,000 in funds, the victim realized they had been scammed and alerted the police. 

Binance froze USDT for FBI

The bitcoin sent to Warren’s wallet address was used to track down the illicit funds. Authorities discovered funds from the Markus scam had been mostly cashed out but that roughly half of the funds lost to Warren remained intact. 

The FBI traced the crypto transactions to a Binance account held under the name Izuchukwu Henry Okolo. Binance discovered in November 2023 that Okolo had converted their bitcoin to 196,721 USDT. The exchange froze the funds and alerted the FBI who later seized them.

Binance has come under increased scrutiny after US regulators appointed legal firm Sullivan & Cromwell and forensic accounting expert Forensic Risk Alliance to monitor the exchange. The firms will check that Binance is adhering to money-laundering and sanction laws following its $4.3 billion settlement with the US government. 

The documents also disclose that criminals involved in the pig butchering scams may be victims themselves. The US has also found Okolo’s submitted claims about the nature of the seized USDT to be false. 

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