Coinbase Helps Recover $225M in Stolen USDT from Pig Butchering Scams

Coinbase, a leading U.S.-based cryptocurrency exchange, has played a key role in helping the U.S. Secret Service (USSS) recover approximately $225 million in Tether (USDT) stolen through “pig butchering” crypto scams. These scams, often disguised as romantic or business relationships, involve fraudsters gradually gaining victims’ trust before convincing them to invest in fake cryptocurrency platforms. Once funds are deposited, the scammers vanish.

The recovery operation marks one of the largest crackdowns on crypto-related fraud in U.S. history. In late 2023, Tether, the issuer of USDT, froze 39 wallets linked to these scams. Working alongside the USSS, Coinbase helped track on-chain transactions and identify affected users, uncovering 130 victims who collectively lost over $2 million on the exchange.

The USSS seized a total of $225 million in stolen funds, which Tether subsequently burned on-chain. The same amount was then reissued to enable victim compensation. The Federal Bureau of Investigation (FBI) has now launched a restitution process, asking victims to submit transaction records from Coinbase or other exchanges to verify their losses.

Pig butchering scams have become a top enforcement priority for federal agencies like the FBI and the USSS due to their rising prevalence and devastating financial impact. These scams often originate overseas, making international collaboration and blockchain tracing critical tools for recovery efforts.

This case highlights the growing importance of crypto compliance and forensic capabilities in combating digital asset fraud. As regulators and exchanges like Coinbase strengthen cooperation, such efforts are becoming more effective in identifying fraud, freezing assets, and returning stolen funds to victims.