On Friday, September 4, 2026, the United States government initiated a civil forfeiture action against approximately 83,398 USDT, a cryptocurrency equivalent to roughly $83,398 USD at current exchange rates, which was associated with a specific address on the Tron Network. The legal filing, a Verified Complaint in Rem, was lodged in the United States District Court for the Western District of New York.
The action targets USDT linked to a Tron Network address, which was allegedly “burned” and reissued by Tether Limited Inc. on or about April 7, 2026. This forfeiture action is being pursued under Title 18, United States Code, Sections 981(a)(1)(A) and 981(a)(1)(C), which pertain to the forfeiture of property involved in or derived from certain financial crimes.
According to the complaint, the U.S. Attorney’s Office for the Western District of New York alleges that the USDT in question is subject to forfeiture as it is believed to be proceeds traceable to violations of federal law, including wire fraud and money laundering offenses. The court documents detail a timeline of events beginning on or about December 22, 2025, when Tether Limited Inc. reportedly froze USDT tokens in the target address. Subsequently, on December 30, 2025, a federal seizure warrant was issued for any funds in the address.
The complaint further outlines the background of cryptocurrency fraud schemes, specifically referencing “pig butchering” scams. These schemes typically involve scammers building trust with victims through deceptive relationships, then luring them into investing in fraudulent virtual currency platforms.
The FBI’s Internet Crime Complaint Center (IC3) reported a significant increase in cryptocurrency fraud losses, with a total of $9.3 billion in 2024, a 66% rise from the previous year. Investment fraud within this category accounted for $5.8 billion in 2024.
Investigators traced the movement of victim funds through a series of cryptocurrency transactions. The funds were allegedly moved from Ethereum to the Tron network, commingling with other assets before ultimately reaching the target address.
The complaint asserts that the addresses involved in these transactions showed characteristics common to cryptocurrency investment schemes, including association with fraudulent platforms and rapid movement of funds. The investigation suggests that the perpetrator converted Ether tokens on the Ethereum network to Tether tokens on the Tron network.
The United States government is requesting an arrest warrant in rem for the Defendant Amount, and that all interested parties be cited to appear and show cause why the forfeiture should not be decreed. The government seeks a judgment condemning and forfeiting the USDT to the United States.
The complaint was filed by Michael DiGiacomo, United States Attorney, and Elizabeth M. Palma, Assistant United States Attorney.
Please contact BlockTribune for access to a copy of this filing.
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