On Wednesday, September 23, 2026, the United States government filed a complaint in the US District Court for the District of Arizona seeking the forfeiture of about 3.25 million in USDT cryptocurrency tokens that federal prosecutors say were stolen from victims of a “pig butchering” investment fraud.
The civil action, filed in Phoenix by the office of U.S. Attorney Timothy Courchaine, names the tokens themselves as defendants. One batch totals 1,525,028.200939 USDT, and the other totals 1,729,218.135472 USDT. Each was tied to a separate address on the Ethereum network.
Prosecutors say Tether, the company that manages USDT, was served with a federal seizure warrant. It destroyed the tokens and reissued the same amount to a government-controlled wallet. The FBI now holds the funds.
According to the complaint, pig butchering schemes typically begin when scammers contact victims through social media or messaging apps and build personal relationships. Victims are steered to fraudulent trading websites or apps that display fabricated profits. When they try to withdraw money, they are told to pay taxes or fees and are eventually locked out.
The FBI’s Tucson office began identifying victims in March 2022. Investigators found at least six victims whose money went to the first address and at least eight whose money went to the second. Some were interviewed by phone, and others filed complaints with the FBI’s Internet Crime Complaint Center.
The complaint describes individual losses of about $5.2 million for a California woman, $2.7 million for another California victim, $2.3 million for a third, and $1.2 million for a Texas woman. It also lists $920,000 for an Alaska man and roughly $347,000 for a Chandler, Arizona, woman. Several victims were told they could withdraw money from retirement accounts without penalty, and some took out loans.
Prosecutors say the victims moved money from bank accounts to exchanges such as Coinbase and Gemini, then to wallet addresses supplied by the scammers. From late December 2021 through February 2022, the funds allegedly passed through intermediary addresses and were converted among several digital assets, including Shiba Inu, DAI, wrapped bitcoin and Luna. They were also commingled with other money. The funds reached the two defendant addresses on May 13, 2022.
Accounts on Binance and HTX, both opened in the name “On Chik Hau,” allegedly received and forwarded stolen funds. The Binance account was opened with a Malaysian identity card. The complaint says the same individual or individuals controlled both accounts. It adds that the United States is a restricted country for both exchanges.
Investigators also cite overlaps between the two sets of victims. Two victims, identified as Z.Z. and A.V., sent money that ended up at both addresses. Victims tied to each address were directed to the same fraudulent platforms, including Bitsen, ZBG and UBAY.
The government seeks forfeiture on two grounds. One is that the tokens are proceeds traceable to wire fraud. The other is that they were involved in money laundering.
Prosecutors said they hope to clear title so the assets can be returned to victims through the Attorney General’s remission process.
Please contact BlockTribune for access to a copy of this filing.
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