Tether COLLABORATES With FBI And DOJ, Seizes Funds

Tether, the issuer of the USDT stablecoin, has collaborated with the FBI and the DOJ to seize $1.4 million in funds from a wallet.

According to Tether and U.S. authorities, the wallet was tied to a fraud network that targeted senior citizens—the seizure will presumably go toward reimbursing victims of this scam.

While I applaud Tether for helping these victims get their money back, this collaboration between Tether and U.S. law enforcement raises some concerns.

More specifically, it highlights the problems inherent in centralized forms of cryptocurrency. If Tether could access this wallet and seize these funds, what is to stop Tether from accessing any other wallet and seizing those funds?

Crypto was created as an alternative to the traditional financial system and all its centralized pitfalls. Tether announced the successful seizure of the assets on Tuesday:

Tether Assists US Government in Seizure of Illicit Funds Linked to Tech Scam

Read more ⬇️https://t.co/l5S9HxPQRB

— Tether (@Tether_to) March 12, 2024

Not news but in case you missed it from founder of tether @paoloardoino in his own words: "we're collaborating with the FBI, DOJ and Mossad".

Stay safe anon. On the flip side, USDT is here to stay tho. pic.twitter.com/cWI9Bm2hEg

— Patrick Aljord (@patcito) March 12, 2024

Crypto Slate detailed the alleged scam:

The fraudulent scheme targeted vulnerable elderly individuals through deceptive pop-up advertisements. These misleading ads falsely alerted victims to compromised devices, leading them to seek assistance from supposed tech support.

Upon contacting the provided number, victims fell into the trap of scammers who claimed their accounts were compromised. Subsequently, victims were directed to individuals posing as bank representatives, who coerced them into converting their funds into cryptocurrencies and transferring them to hacker-controlled wallets.

Gabor Gurbacs remarked: “Tether routinely assists authorities to root out illicit activity, scams and bad actors. This is a good illustration of Tether assisting the DOJ and FBI. I’d venture to guess that stablecoins do more than many banks to safe-keep the financial system.”

Tether routinely assists authorities to root out illicit activity, scams and bad actors. This is a good illustration of Tether assisting the DOJ and FBI. I'd venture to guess that stablecoins do more than many banks to safe-keep the financial system. https://t.co/xmZwttHxlz

— Gabor Gurbacs (@gaborgurbacs) March 12, 2024

🤝@Tether_to has collaborated with the #FBI and the Department of Justice to seize $1.4 million in $USDT from a crypto wallet linked to a scam network.

This operation is part of their commitment to combating financial fraud within the cryptocurrency ecosystem.

— Satoshi Talks (@Satoshi_Talks) March 12, 2024

Daily Hodl provided this statement from the Northern District of Illinois State Prosecutor:

“The alleged fraud scheme, which remains under investigation, was initiated by a computer popup that indicated a victim’s computer had been compromised.

The popup directed the victim to contact Microsoft or Apple, depending on the victim’s operating system, at a certain telephone number.

Once on the phone, the perpetrators, posing as tech support employees, informed the victim that the victim’s bank account had also been compromised.”

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