US Government Targets Three Tether Addresses Holding Funds from Crypto Romance Scam

On Monday, March 11, 2024, the United States Government filed a civil forfeiture complaint against three tether addresses holding cryptocurrency worth over eight million dollars.

In the complaint filed with the United States District Court for the Northern District of California, prosecutors allege that the digital assets held in the three tether addresses are subject to forfeiture as they represent the proceeds of multiple fraud schemes, including romance scams and unauthorized trading. According to the complaint, an individual known as AF lost over 1.3 million dollars through a “pig butchering” scam where they were defrauded into investing in a fake cryptocurrency trading platform.

The complaint describes how AF was initially contacted on a dating app by an individual who went by “Sisi Li.” Sisi Li quickly steered the conversations toward cryptocurrency and introduced AF to an associate known as “David Wu,” who claimed to be an experienced crypto trader. Wu convinced AF to download a trading app and link it to a fake company called BCGroup.cc. Through manipulative tactics and fabricated trading gains displayed on the app, Wu was able to induce AF into transferring over 1.3 million dollars worth of tether (USDT) and other cryptocurrencies to BCGroup.cc from June to September 2022.

Prosecutors performed a blockchain analysis to trace the stolen funds through a series of 103 crypto addresses. They allege that the funds were intentionally moved between multiple addresses, known as “chain hopping”, in an effort to conceal their source and ownership before many transfers eventually ended up at cryptocurrency exchanges. Three main tether token addresses, referred to as Subject Accounts A, B, and C in the complaint, were identified as continuing to hold portions of AF’s stolen funds totaling over eight million dollars at the time of filing.

If proven, the complaint asserts that the digital assets held in the three subject accounts are subject to forfeiture because they either represent or were derived from proceeds involved in criminal wire fraud and money laundering offenses. The case demonstrates continued efforts by law enforcement to utilize blockchain transaction tracing and follow illegal funds on public ledgers.

Please contact BlockTribune for access to a copy of this filing.