$1.4 million in Tether seized in customer support scam crackdown

abdelaziz Fathi

The U.S. Attorney’s Office in Chicago, Illinois, has seized around $1.4 million in Tether (USDT) as part of a crackdown on a customer support scam operation.

S&P casts doubt on Tether's stability, USDT reserves

The seizure was conducted on March 12 and targeted funds believed to be the proceeds of fraud, mainly victimizing elderly individuals.

This operation was led by the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI), with assistance from Tether. The scam involved tricking victims through a popup ad that falsely claimed their computers were compromised.

When victims called the provided fake customer support number, they were further misled into believing their bank accounts were at risk. Scammers posing as support agents then convinced the victims to transfer their bank funds into USDT under the guise of safeguarding their assets, effectively taking control of the victims’ tokens.

This case marks one of the first instances in the U.S. of recovering USDT from an unhosted digital currency wallet. While details on the exact method of recovery remain undisclosed, an affidavit filed on January 24 suggests that law enforcement was able to trace the stolen funds to five distinct wallets. These wallets appeared to have been involved in a wire fraud scheme, with assets moved in small amounts through intermediary addresses, likely in an attempt to launder the proceeds.

Despite Tether’s operations being outside the U.S., American regulators, through the Office of Foreign Assets Control (OFAC), has mechanisms to influence the stablecoin’s offshore activities.

One notable instance of regulatory intervention involves Tether’s connection with Tornado Cash, a cryptocurrency mixer on the Ethereum network, which was sanctioned by OFAC in August 2022 for money laundering activities. This action confirmed the ability of regulatory bodies to impact the usage of tether indirectly, through international cooperation and measures targeting associated entities.

Earlier in February, JPMorgan Chase suggested that impending stablecoin regulations could pose challenges for Tether. They argue that such regulations are likely to favor stablecoins offering greater transparency and adherence to emerging KYC and AML standards, thereby reducing Tether’s appeal. This regulatory shift could also affect the decentralized finance (DeFi) sector, where USDT plays a critical role as a form of collateral and liquidity.

Read this next


BlockDAG Offering a Fresh Take on Meme Coin Development Amid Solana’s Challenges and Floki Inu’s Price Fluctuations With 30,000x ROI

Dive into how BlockDAG’s innovative presale, low-code platforms, and potential 30,000x ROI, outperform Solana’s technical hurdles and Floki Inu’s market predictions.


BlockDAG Excels With $2.2M In Miner Sales And Moonshot Teaser, Overshadowing Litecoin’s Rally And Dogwifhat’s Market Highs

Explore how BlockDAG’s $2 million Miner Sales & Moonshot Teaser eclipse the Litecoin price recovery and the Dogwifhat all-time high.


BlockDAG Leads Top 6 Cryptocurrencies to Buy in 2024 with a Potential Price Surge to $10 Leaving Cosmos, BNB, and Ethereum Behind

Discover the top six cryptocurrencies in 2024, including BDAG’s remarkable growth potential, BNB’s durability, Cosmos’ connectivity, and ETH’s eco-friendly advances.

Retail FX

Weekly Roundup: Prop firm arbitrarily accounts, Interactive Brokers’ CFDs in Japan

FX, Fintech and cryptocurrency markets have been bustling with activity over the past week, as is often the case. Keep yourself informed and ahead of the curve with a curated selection of crucial stories and developments that are most relevant to those engaged in the markets.


BlockDAG Redefines Crypto Mining as Presale Tops $18.5M, Outshining Ethereum ETF & Dogecoin Dynamics

The recent approval of the first Ethereum ETF in Hong Kong underscores a significant advancement in the cryptocurrency’s mainstream acceptance. While Ethereum continues to attract institutional attention, the Dogecoin price prediction suggests a possible resurgence, despite its current undervaluation from past highs.

Digital Assets

Bitcoin halving is done: ViaBTC mines historic block 840K

The Bitcoin network has confirmed its fourth-ever halving block, mined by the cryptocurrency pool ViaBTC, according to data from Blockchain.com. This significant event in the Bitcoin ecosystem reduced the mining reward by half, a deflationary measure occurring approximately every four years to control the issuance of new bitcoins and curb inflation.

Retail FX

True Forex Funds now offers Match-Trader and cTrader platforms

Proprietary trading firm True Forex Funds today announced the launch of Match-Trader, a multi-asset trading platform developed by California-based FX technology provider Match-Trade Technologies.

Retail FX

CySEC hits FXORO parent with €360,000 fine

The Cyprus Securities and Exchange Commission (CySEC) has fined MCA Intelifunds, trading as FXORO, a total of €360,000 for multiple violations of the Cypriot investment laws.  

Digital Assets

Binance’s CZ in good mood ahead of sentencing, says partner

Yi He, co-founder of cryptocurrency giant Binance, has shared a positive outlook on the legal situation of the exchange’s former CEO, Changpeng Zhao. Zhao is currently awaiting a sentencing hearing scheduled for April 30 in the United States.