Pierluigi Paganini
March 29, 2025
On February 27, 2025, the U.S. Attorney’s Office in Ohio filed a civil forfeiture complaint for $8.2M in USDT (Tether) linked to a ‘romance baiting’ scam. Fraudsters used anonymous messaging apps to deceive victims into fake financial relationships. One Cleveland victim liquidated her retirement savings, sending over $650K in crypto to a fraudulent investment platform.
“The FBI used blockchain intelligence to trace the flow of funds across multiple platforms and networks — from centralized exchanges, to Ethereum and TRON, through DeFi protocols, and into final storage wallets.” reads the report published by the blockchain cybersecurity firm TRM Labs. “Despite complex laundering methods, the investigation revealed common routing patterns and wallet reuse that helped agents piece together the full laundering scheme.”
A romance baiting scam, aka pig butchering scam, is a type of financial fraud in which scammers build trust with victims over time, manipulating them into making large investments in fraudulent schemes.
A pig butchering scam is a manipulative fraud where scammers build trust with victims over time, often via social media or dating apps, before exploiting them financially. They introduce fake investment opportunities, convincing victims to invest large sums. After convincing them with small returns, the scammer eventually locks accounts and disappears with the funds. The scam involves emotional manipulation, leaving victims financially devastated and reluctant to report the fraud.
According to TRM Labs, the FBI uncovered laundering patterns tied to romance baiting scams, leading to a dual legal forfeiture for wire fraud and money laundering. Tether froze the funds in June 2024, burned the USDT tokens, and reissued them to law enforcement in November 2024. The seizure paves the way for restitution to victims, with the FBI tracing additional victims through seized wallets.
The complaint reveals that the scammer-controlled addresses contained funds from multiple pig butchering victims. The DOJ used dual legal theory to seize $8.2 million: funds tied to fraud were forfeited under wire fraud law, and remaining funds under money laundering law. This ensures restitution for known and unidentified victims as the FBI traces further addresses.
Pig butchering scams are rapidly growing crypto frauds, often connected to human trafficking in Southeast Asia. They exploit vulnerable individuals through financial grooming, causing significant damage.
“First employed by Chinese organized crime groups, the particular type of investment fraud scheme detailed below initially targeted victims inside China then expanded worldwide during the global pandemic.” reads the complaint. “Operating from compounds in Cambodia and Myanmar, these criminal syndicates often operate by forcing human trafficking victims in Southeast Asia to participate in the schemes against their will. The schemes take advantage of the ability of cryptocurrency to be transferred securely and globally, without intermediaries and the safeguards established, and inherent to, the traditional financial system.”
“This case underscores how public-private partnerships, sophisticated tracing tools, and smart legal strategies can lead to real-world impact. It’s not just about seizing crypto — it’s about getting justice for victims, many of whom lose their life savings.” concludes TRM.
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