Federal prosecutors in Albany have filed a civil forfeiture complaint seeking to recover more than $12 million in Tether’s USDT stablecoin linked to an investment fraud scheme.
The complaint targets balances traced to wallets controlled by a spoofed trading platform and describes how victims were recruited through unsolicited text messages. Ten Mandarin-speaking people were steered into fake investment accounts on a site called ShakepayEX, designed to look like a legitimate Canadian exchange. After deposits, the platform blocked withdrawals by inventing fees and new requirements and pressured victims to send more funds. Prosecutors say losses exceeded $10 million.
The case highlights growing use of civil forfeiture to intercept funds on stablecoin networks, with prosecutors coordinating with issuers and exchanges to freeze assets before they disappear into harder-to-trace channels. In June the Department of Justice filed a separate civil forfeiture action seeking $225 million in USDT tied to so-called “pig butchering” scams — one of the largest crypto-linked seizures to date.
Ari Redbord, global head of policy at TRM Labs, told Decrypt that civil forfeiture has become “one of the most important tools in crypto investigations,” because it both disrupts illicit activity and creates a path to return funds to victims. Prosecutors say restitution is now a central consideration, especially when arrests are difficult in non-cooperative jurisdictions.
What this means for users: Civil forfeiture can recover money that would otherwise vanish, but prevention remains the best defense. Be wary of unsolicited investment messages, verify platform domains and official apps, and never send funds to accounts you haven’t independently confirmed.
Source: Decrypt. Read the original coverage for full details.