Crypto Exchange Coinbase Plays Central Role in Historic Law Enforcement Operation
Coinbase has announced it played a pivotal role in helping the U.S. Secret Service seize $225 million in cryptocurrency linked to widespread crypto investment scams. The seizure, which took place earlier this month, is the largest in the Secret Service’s history, according to federal officials.
The operation targeted a “pig butchering” scam ring—a type of fraud that manipulates victims into investing in fake crypto ventures. These schemes have been increasingly tied to criminal networks operating out of Southeast Asia, where victims are recruited or trafficked into scam compounds.
Coinbase’s Investigative Support
Coinbase revealed in a blog post that it took part in a collaborative investigative sprint in 2024 alongside several other exchanges and law enforcement agencies.
Between Feb. 26 and Feb. 29, 2024, Coinbase’s compliance and investigation teams:
- Traced millions in illicit crypto flows
- Flagged and analyzed suspicious wallet activity
- Identified over 130 Coinbase users unknowingly scammed, amounting to $2.3 million in customer losses
This critical data helped the Secret Service build a detailed case, ultimately leading to the recovery and seizure of funds.
OKX, Tether Also Played Roles
The investigation also uncovered that 140 OKX exchange accounts—some reportedly held by individuals at scam compounds in Southeast Asia—were linked to the frozen funds. These accounts were frozen during the investigation.
Stablecoin issuer Tether was another key player in the case. In 2023, it froze 39 wallet addresses containing $225 million in USDT and later burned the tokens. Tether then reissued the equivalent amount of new USDT, transferring them to a wallet under Secret Service control.
“This process was visible on-chain,” Coinbase noted, “highlighting how blockchain transparency can enhance real-time law enforcement actions.”
Global Crackdown on Crypto Crime Intensifies
This record-breaking seizure is part of a growing global trend. In May, Australian authorities seized 25 BTC worth over $2.6 million from an old French exchange theft. Earlier this year, German police confiscated €34 million in crypto tied to laundering from the Bybit hack.
As governments ramp up digital asset regulation, collaboration between exchanges and agencies is proving crucial in tracking illicit flows and recovering stolen crypto.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.