US Prosecutors Move to Seize $3.44M USDT from Fake Ethereum Scheme

Edgen Crypto·Mar 11 2026, 12:47

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Key Takeaways

U.S. authorities are moving to permanently forfeit $3.44 million in Tether (USDT) seized from a multi-state crypto investment scam. The scheme tricked investors into sending Ether (ETH) to fraudulent wallets for a fake gold-backed investment opportunity. This action is part of a wider, increasingly effective crackdown on illicit crypto activities by U.S. law enforcement, signaling greater risk for scammers and potentially more security for investors.

U.S. prosecutors filed a civil forfeiture action to permanently recover $3.44 million in USDT seized from a fraudulent investment scheme.
The scam involved luring victims on messaging apps to send ETH to wallets controlled by fraudsters, which was then laundered through intermediary addresses into USDT.
The seizure reflects a broader trend of successful enforcement, with stablecoin issuer Tether reporting it has assisted in freezing approximately $4.2 billion in illicit funds over the last three years.

Prosecutors Move to Seize $3.44M from Fake Ethereum Scheme

On March 10, 2026, the U.S. Attorney’s Office in Boston initiated a civil forfeiture action to permanently confiscate approximately $3.44 million in Tether (USDT). The funds, originally seized in February and March 2025, are linked to a sophisticated investment scam that defrauded individuals across Massachusetts, Utah, and South Carolina. The investigation began in late 2024 after victims reported being manipulated into participating in what was pitched as an exclusive Ethereum investment opportunity backed by physical gold.

Scammers initiated contact through seemingly mistaken text messages on platforms like WhatsApp and Telegram, building trust before introducing the fraudulent investment. Victims were instructed to purchase Ether and transfer it to wallets controlled by the criminals. The funds were then funneled through a series of intermediary addresses, converted into USDT, and moved to unhosted wallets to obscure their origin.

Enforcement Actions Intensify as Seizures Mount

This forfeiture action is the latest in a series of successful efforts by U.S. authorities to claw back digital assets from fraudulent operations. It demonstrates a growing capability to trace and seize cryptocurrencies used in illicit finance. Other recent enforcement actions include the recovery of $327,829 in USDT from a romance scam and the seizure of over $61 million in USDT connected to a large-scale "pig-butchering" scheme in North Carolina.

The trend is underscored by increased cooperation between law enforcement and industry players. Tether, the issuer of USDT, reported last month that it has frozen approximately $4.2 billion in assets linked to illicit activity over the past three years. This proactive collaboration highlights a maturing ecosystem where illicit actors face greater hurdles in laundering their proceeds, providing a measure of security for the broader digital asset market.