Cryptocurrency Firms Halt $47 Million of Funds Linked to Romantic Scams
In a significant move against cybercrime, cryptocurrency companies, including Chainalysis, Binance, OKX, and Tether, have successfully seized nearly $50 million worth of funds stolen via romance baiting scams.
The efforts, which began in 2022, have seen the seizure of funds using Chainalysis' investigative tools. These tools identified several wallets associated with a romance baiting operation based in Southeast Asia. The operation is believed to have used a method called "pig butchering," a term coined by Interpol to describe a specific type of scam involving cryptocurrency.
According to a Chainalysis report from February, associated losses from romance baiting rose 40% year-on-year (YoY) in 2024 to comprise a third of total crypto fraud revenue. This increase in scams is a concerning trend, with the number of deposits to romance baiting scammers increasing 210% YoY in 2024.
One such instance involved funds transferred from a consolidation wallet to five different wallets, which were then seized. The exact timeline and details of the investigation are not provided in the article. However, it is known that Tether shared the investigation's findings with an APAC law enforcement agency and froze the funds in June 2024 at its direction.
The crime is made possible by online marketplaces like Huione Guarantee, which has processed over $49 billion in cryptocurrency transactions since 2021. Romance baiting operations typically involve romance and investment fraud, where vulnerable individuals are approached on dating sites, groomed by scammers, and persuaded to invest in some kind of investment scam.
It's unclear why it took so long to publicize these efforts. However, Tether CEO Paolo Ardoino has stated a dedication to working with law enforcement agencies worldwide to freeze funds associated with pig butchering scams and all manner of illicit activity.
In another notable incident, Tether and OKX collaborated with the US Department of Justice (DOJ) to freeze around $225 million in USDT linked to an international human trafficking syndicate in Southeast Asia responsible for romance scams in November 2023.
The seizure of these funds is a testament to the power of collaboration between cryptocurrency companies and law enforcement agencies in the fight against cybercrime. As the use of cryptocurrency continues to grow, it is crucial that measures are put in place to protect users from such scams and ensure the integrity of the system.
