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Cryptocurrency exchange Coinbase states it played a “critical role” in assisting a US Secret Service inquiry that led to the confiscation of $225 million associated with crypto investment frauds earlier this month.
On June 18, the Department of Justice submitted a request to seize over $225 million in cryptocurrency retrieved by the Secret Service that was reportedly taken by pig butchering fraudsters, which Agent in Charge Shawn Bradstreet mentioned at that time was the largest cryptocurrency confiscation in the organization’s history.
In a blog entry on Tuesday, Coinbase declared that it participated alongside several other exchanges in an “investigative sprint” with the Secret Service in 2024 to identify scam victims, scrutinize chain flows, and assist in forming a case to confiscate the cryptocurrency.
Over 130 Coinbase clients ensnared by fraud
Coinbase mentioned that from February 26 to February 29 last year, its team traced millions in crypto transactions to illicit wallets and other account activities that could support identifying scam victims for the Secret Service.
“This blockchain analysis and the production of subpoena records enabled the USSS to identify over 130 Coinbase customers who were unknowingly defrauded, amounting to $2.3 million in losses,” Coinbase stated.
The Secret Service also traced some of the frozen assets back to 140 accounts at the cryptocurrency exchange OKX, many of which were registered in the names of individuals detained at scam locations in Southeast Asia, according to Coinbase.
Tether incinerates $225 million in USDT
Stablecoin issuer Tether, recognized by the DOJ for its aid in the investigation, frozen 39 wallet addresses containing the $225 million in 2023, predominantly in its eponymous stablecoin Tether (USDT). The issuer later incinerated all the tokens.
Coinbase noted that an equivalent amount of new USDT was subsequently reissued and dispatched to a wallet governed by the Secret Service.
“This process was observed on-chain, providing a real-time instance of how cryptocurrency can promote transparency in law enforcement activities,” the exchange remarked.
Related: Australia identifies $123M crypto laundering operation behind security firm
Burning tokens means they are permanently eliminated from circulation. Typically, this is done by transferring them to an inaccessible wallet address.
Global agencies confiscating stolen cryptocurrency
In May, the Australian Federal Police confiscated nearly 25 Bitcoin (BTC), valued at over $2.6 million, which were allegedly associated with a theft of 950 Bitcoin taken from a French cryptocurrency exchange in 2013.
Several months earlier, in February, German authorities seized 34 million euros ($38 million) in cryptocurrency from eXch, a cryptocurrency platform reportedly utilized to launder funds stolen post Bybit’s $1.4 billion hack.
Magazine: Coinbase hack indicates the law likely won’t safeguard you: Here’s why
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