
Cleveland, Ohio – In a recent legal action, the United States government has filed a civil complaint seeking the forfeiture of 200,000 Tether (USDT) cryptocurrency, valued at approximately $200,000. This move comes after a significant fraud incident in February 2024, where an Ashtabula, Ohio, resident had approximately $340,000 worth of bitcoin transferred from their virtual currency wallet without their authorization. The victim did not initiate the transaction, which was directed to an unknown cryptocurrency address.
Blockchain Analysis Leads to Discovery
Virtual currencies like bitcoin and Tether are recorded on a public digital ledger called a blockchain. This distributed network of computers tracks every transaction, ensuring that each virtual currency address, transaction, and balance is transparently and permanently recorded.
In this case, law enforcement utilized blockchain analysis to trace the stolen funds. Through several investigative steps, they were able to track approximately $200,000 of the victim’s bitcoin that had been fraudulently transferred. These funds were traced to two cryptocurrency addresses on the Ethereum blockchain. During the investigation, it was discovered that the stolen bitcoin had been converted into Tether (USDT), a stablecoin designed to maintain a 1:1 peg to the U.S. dollar.
Freezing and Forfeiture Efforts
In March 2024, Tether Limited Inc., the issuer of USDT, froze the tokens held in the two cryptocurrency addresses after the fraud was uncovered. Following this action, a federal seizure warrant was issued on July 31, 2024. As a result, 200,000 USDT tokens were transferred to a virtual currency wallet controlled by U.S. law enforcement.
On October 3, 2024, a civil forfeiture complaint was filed by the United States, seeking to officially seize the 200,000 USDT tokens. If successful, the government aims to return the forfeited funds to the victim in Ashtabula, Ohio. The complaint notes that these claims are allegations, which the government must prove by a preponderance of evidence should the case proceed to trial.
FBI Investigates Cryptocurrency Fraud
The Federal Bureau of Investigation (FBI), specifically the Cleveland Field Office, is actively investigating this case, as well as other cryptocurrency fraud schemes targeting victims across the United States, including in Northern Ohio.
This case is being handled by Assistant U.S. Attorneys James L. Morford and Daniel J. Riedl, who are leading efforts to prosecute those responsible and recover the stolen assets.
This case underscores the increasing threat posed by cryptocurrency fraud and the importance of blockchain analysis in tracing and recovering stolen digital assets.