Cryptocurrency company Tether seized $1.4 million on behalf of U.S. law enforcement investigating a tech support scam targeting elderly citizens, the company announced Tuesday – as it tries to turn around its reputation. reputation amid accusations that its USDT coin is the currency of choice for online fraudsters.
U.S. Attorney’s Office for the Northern District of Illinois announced the seizure on Friday and “thanked Tether for its assistance in completing the transfer of these assets.”
“The Company will continue to voluntarily assist law enforcement in protecting the safety and security of its users and the broader crypto community,” Tether said in A liberation.
According to a January affidavit requesting permission to seize the funds, the ongoing investigation involves a tech support scam in which cybercriminals pose as Microsoft or Apple employees after a pop-up on a victim’s computer warns her that her device is compromised and that she should call the companies for help.
“The project affected people located throughout the United States,” the affidavit states.
In one case, a victim called a number purporting to be for Apple Support after a pop-up alert appeared on their computer. They convinced him that his Social Security number had been compromised, that his financial assets were at risk, and that he needed to transfer his funds to a so-called “Treasury account.”
As part of this elaborate scheme, the scammers provided a letter with the forged signature of Federal Reserve Chairman Jerome Powell, saying that a “fraud prevention officer” would perform the “revalidation of…bank accounts and assets financial”. They also provided a fake letter from the bank holding the victim’s retirement account instructing the victim to liquidate the funds and transfer them to the supposedly secure account.
He was then asked to install a program allowing remote access to third parties and to “leave a phone line ‘on'” throughout the day to monitor activity. The scammers asked him to make wire transfers to two banks that had deals with Crypto.com, where he opened accounts.
He was tasked with installing the Exodus digital currency wallet and ended up transferring $3-4 million across multiple accounts before following the same process for his wife’s accounts, which he was told could be compromise.
A large portion of the funds were then transferred to USDT, a stable currency pegged to the US dollar, and then transferred elsewhere by the cybercriminals. According to the affidavit, the FBI identified wallets containing funds stolen from five victims, which Tether froze at their request.
After “burning” the funds, Tether reissued “the equivalent amount of USDT tokens associated with each address and (transferred) that USDT to a government-controlled wallet.” According to the FBITech support scams inflicted losses of over $924 million in 2023.
Tether and law enforcement have teamed up in the past to seize illicit funds. In November, the Department of Justice announcement the seizure of $9 million in USDT stolen from more than 70 victims in so-called pig butchery scams.
The same week, Tether announcement that she had “voluntarily” frozen USDT worth $225 million “linked to an international human trafficking syndicate in Southeast Asia responsible for a global “pig butchery” romance scam “.
A vast United Nations Office on Drugs and Crime report on transnational crime in Southeast Asia recently discovered that USDT “has become a favored choice for regional cyber fraud operations and money launderers due to its stability and the ease, anonymity and low fees of its transactions.”
The company responded directly to the report, saying its partnerships with law enforcement provide “unprecedented surveillance, surpassing traditional banking systems that for decades have been the means to launder substantial sums of money.”
This week, Tether announcement that USDT circulation had exceeded $100 billion for the first time.
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