The perpetrators gained the trust of their victims through a scam called "pig killing".
The United States Department of Justice (DOJ) said in an April 3 statement that it has seized $112 million worth of digital assets related to a crypto investment scam.
US Department of Justice seizes millions of dollars in cryptocurrency
Assistant Attorney General Kenneth A. Polite, Jr. said authorities will return the seized funds to the victims and will work to raise public awareness, writing:
“These particularly vicious frauds, where scammers carefully cultivate relationships with their victims over time, have destroyed families and left individuals with their life savings.”
In related scams, perpetrators gradually gain the trust of victims through communication methods such as social networks, dating websites, phone calls, text messages, etc. Ultimately, the criminals convince their targets to invest in fake cryptocurrency platforms and then transfer the stolen funds to their own addresses.
The U.S. Department of Justice said the scam is called "shazhupan," which means "pig-killing plate" in Chinese. Most of the victims are between 30 and 49 years old.
The agency authorized the seizure of six crypto accounts in three states in Arizona, the Central District of California, and the District of Idaho. The seized cryptocurrency accounts were allegedly used to launder money from the aforementioned scam.
The DOJ’s Broader Role in Crypto Crime
The U.S. Department of Justice noted that cryptocurrency fraud, including hog-killing schemes, increased 183% between 2021 and 2022, with $2.57 billion in stolen funds. This accounted for the majority of fraud reported to the FBI Online Crime Center, totaling $3.31 billion.
The agency has also seized cryptocurrency on other occasions. In November 2022, it reported seizing 50,000 BTC associated with Silk Road, worth $1.05 billion at the time. In February 2022, it confiscated 94,000 BTC related to the Bitfinex theft, worth $3.6 billion at the time. The FBI, an agency under the U.S. Department of Justice, seized $260,000 in assets, including NFTs, in February 2023.
The Justice Department has also taken direct action against certain cryptocurrency projects and individuals involved. It recently targeted CoinMixer, Terra, Bitzlato, and associates of the OneCoin scam led by “crypto queen” Ruja Ignatova.
