Tether COLLABORATES With FBI And DOJ, Seizes Funds

March 12, 2024 4:03 pm Comments

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:

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.”

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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