In a significant crackdown, the US Department of Justice has seized nearly $9 million in funds linked to over 70 victims across the country involved in so-called "pig farming" scams.
The culprits collaborated to create and promote fake investment companies and cryptocurrency exchanges, duping investors into depositing their money, which was then misappropriated.
Efforts to launder the ill-gotten gains involved using chain-hopping techniques, a method where rapid and successive transactions aim to switch between cryptocurrencies to evade detection. Criminals often convert tokens into so-called "privacy coins" like Monero or Z-cash, making tracing more challenging compared to mainstream tokens like Bitcoin and Ethereum.
Cryptocurrency laundering has evolved beyond traditional methods such as mixers and tumblers. Chain hopping, coin exchanges, and cross-chain bridges have become favored techniques for attempting to evade law enforcement.
Decentralized coin exchanges enable users to trade directly without intermediaries, while cross-chain bridges facilitate the transfer of assets and information between different blockchains. Although these services can serve legitimate security purposes, they are susceptible to abuse for money laundering.
The investigation, led by the US Secret Service San Francisco Field Office, linked the criminals' laundering attempts to various wallet addresses associated with the criminal organization. Reports submitted through the FBI's and FTC's cybercrime reporting portals further supported the case.
The Justice Department did not disclose the identities of the cybercriminals or any arrests made. The case remains under the purview of the DOJ's Computer Crime Division, the National Cryptocurrency Enforcement Team, and Assistant US Attorneys Chris Kaltsas and Galen Phillips for the Northern District of California.
The seized funds were converted into the US dollar-pegged stablecoin USDT (Tether), and the Department of Justice commended Tether's involvement in facilitating the smooth transfer of assets.
This enforcement action underscores the Secret Service's commitment to safeguarding the US financial system and combating digitally enabled financial fraud.
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