The U.S. government has seized a $2.12 million Ethereum wallet through a civil in rem forfeiture lawsuit, according to reports from AMBCrypto. The action targeted 2,117,677.97 USDT held in the crypto wallet, with the complaint claiming the funds originated from a massive investment scam linked to a 'pig-butchering' operation. In civil in rem actions, property itself becomes the target rather than prosecutors charging an individual in a criminal case.
According to the complaint, scammers employed sophisticated tactics to target victims through dating apps, WhatsApp, social media, and phony job offers. Once victims were engaged, scammers directed them to fraudulent cryptocurrency investment platforms that promised guaranteed returns. These platforms displayed fictitious profits to encourage larger deposits from unsuspecting investors. As reported by AMBCrypto, many victims, including one from Tennessee, lost significant sums after being tricked into paying extra tax or verification fees when attempting to withdraw their money. The fraud network also transferred stolen assets across multiple Ethereum wallets to hide their source, but investigators were able to link the assets through blockchain analysis.
The fraud network attempted to hide the source of stolen funds by transferring them across multiple Ethereum wallets. However, investigators were able to link the assets to the target wallet through blockchain analysis, as reported by AMBCrypto. The USDT is subject to forfeiture under federal law as it represents proceeds of wire fraud and money laundering. Since Tether issued the tokens, authorities worked with the company to freeze the USDT in the crypto wallet. Additionally, the stolen assets had already been transferred through intermediary crypto wallets, preventing victims from successfully withdrawing their funds.
The complaint highlighted the wider increase in cryptocurrency investment fraud, with the FBI receiving more than 41,000 complaints about losses totaling $5.8 billion in 2024, according to AMBCrypto. The crypto industry experienced 207 hacking incidents in H1 2026, more than double the 85 hacks reported in the same period in 2025, according to TRM Labs. Notably, 126 incidents occurred in Q2, reflecting increased vulnerabilities across DeFi protocols.
