Federal prosecutors used civil asset forfeiture to recover about $1.7 million in USDT and BUSD tied to a cryptocurrency investment and money laundering scheme. Authorities cleared title to the stablecoins and are working to return assets to victims who were contacted via text and social media and moved to encrypted apps.

The United States Attorney’s Office in the Eastern District of Virginia announced civil asset forfeiture proceedings that recovered roughly $1.7 million in stablecoins — primarily USDT and BUSD — connected to a cryptocurrency investment fraud and money laundering scheme. Prosecutors say perpetrators initially contacted victims through text messages and social media, then shifted communications to encrypted messaging applications where they persuaded victims to transfer digital assets into fraudulent investment platforms. Through coordinated investigations and asset-tracing techniques, authorities located the stablecoins, initiated civil forfeiture to clear title, and began processes to return proceeds to identified victims. The release highlights the government’s increasing use of civil forfeiture to disrupt crypto-enabled scams and to repatriate funds to defrauded investors, while also noting challenges such as cross‑platform transfers and mixing services that complicate recovery. The case reflects ongoing efforts by federal prosecutors to pair traditional forfeiture tools with blockchain tracing to hold fraudsters accountable and mitigate losses to retail victims of online investment schemes.