Tether collaborates with multiple CEXs to freeze $50 million in Pig-butchering scams funds, delivering a heavy blow to the Southeast Asian encryption fraud industry.

Stablecoin issuer Tether has collaborated with Chainalysis and mainstream CEXs to conduct cross-border operations with law enforcement agencies, successfully freezing $50 million USDT related to "Pig-butchering scams" in Southeast Asia. The operation traced 19 involved addresses, ultimately locking down 5 major Wallets, revealing a transnational criminal network combining investment fraud and human trafficking. This collaboration demonstrates the cryptocurrency industry's ability to work together to combat illegal fund flows and sets a new benchmark in the global fight against crypto fraud.

[Details of the Cross-Border Joint Action Disclosure]

In the latest disclosed joint operation, investigators discovered through on-chain tracking that between November 2022 and July 2023, victim funds were transferred to a network of addresses controlled by a scam group. The funds ultimately converged into a main wallet, which transferred $46.9 million through intermediary accounts and then dispersed to five final wallets. Notably, to make the scam appear more convincing, the scammers returned $63,900 USDT to the victims from one of the wallets, which is a typical characteristic of Pig-butchering scams.

(Source: Chainalysis)

[Pig-butchering scams analysis in depth]

The "Pig-butchering scams" got their name from the criminal methods used—scammers first "fatten up" their victims by establishing a trust relationship, ultimately extracting maximum economic benefit. This criminal model combines investment fraud and human trafficking, luring victims through social media, dating apps, or even misdirected text messages. After establishing a relationship, the scammers coerce victims into participating in fraudulent investment schemes (usually involving Crypto Assets), while the trafficked laborers (most of whom are imprisoned within the compound) are forced to carry out the scams in person.

[Industry collaboration becomes key to anti-fraud]

Tether CEO Paolo Ardoino emphasized: "Unlike other crypto assets like Ethereum and Bitcoin, Tether has the technical capability to freeze known illegal funds. We are committed to supporting global law enforcement in combating Pig-butchering scams and helping victims obtain compensation." Erin Fracolli, head of CEX intelligence and investigations, pointed out that this case demonstrates the importance of public-private collaboration, while another CEX investigator added that Pig-butchering scams are no longer only targeting Asian victims but are affecting users worldwide.

[Law enforcement actions continue to expand]

This action is an extension of Tether's efforts against illegal finance. In September 2024, the company reported freezing over 1,850 wallets related to crimes in 45 jurisdictions, collaborating with 180 institutions to recover $1.86 billion in assets. The company also assisted in handling cases related to cybercrime groups such as the sanctioned Russian exchange Garantex and North Korea's Lazarus.

However, challenges still exist. A report from AMLBot in May 2025 pointed out that Tether's two-step multi-signature system could lead to delays in blacklist processing, with a time window of up to 44 minutes before funds are completely frozen. Analysts warn that this gap could allow criminals to transfer millions before the restrictions take effect.

【Shocking data reveals the scale of scams】

According to a report by Web3 security company Cyvers, Pig-butchering scams have become the biggest threat to crypto investors, causing losses of $3.6 billion in 2024. This type of scam, which drains funds after cultivating relationships over weeks or months, mainly targets users of the Ethereum blockchain. The Cyvers report indicated a 40% increase in cyber threats last year, with 165 incidents resulting in losses of $2.3 billion. Access control vulnerabilities were the most common attack vector, causing losses of $1.9 billion, while smart contract vulnerabilities and address poisoning accounted for an additional $525 million in losses.

[Global Response Upgrade]

Governments and industry participants are strengthening their responses. In June, the U.S. Department of Justice seized $225.3 million USDT, the largest confiscation of crypto assets related to Pig-butchering scams to date. These funds were laundered through mainstream CEX Wallets, with many accounts held in the names of human trafficking victims. Coinbase assisted the U.S. Secret Service in tracking illegal money flows and identifying over 130 scammed customers.

At the same time, India is intensifying its efforts to combat investment fraud, collaborating with Google and Facebook to tackle fraudulent advertisements and phishing schemes. Cooperation with the private sector is also expanding, as mainstream CEX has recently joined the global initiative T3+ initiated by Tether, TRM Labs, and others, which has frozen over $250 million in illegal assets since the end of 2024.

[Conclusion]

Tether's recent joint freezing action demonstrates the cryptocurrency industry's determination and capability to combat illegal activities. With pig-butchering scams causing over $5.8 billion in losses globally (2024 data), public-private cooperation has become a key mechanism for protecting the healthy development of the industry. Although there are still challenges such as response time technically, multinational collaboration, on-chain tracking technology, and industry information sharing are building an increasingly comprehensive defense system against crypto crimes. Investors should enhance their ability to identify pig-butchering scams, while industry participants need to continue strengthening cooperation to jointly maintain the security and trust of the cryptocurrency ecosystem.