We are proud to share that we closely collaborated with the United States Secret Service (USSS) on an extensive investigation into a crypto fraud scheme. Fraudsters used social engineering techniques to build trust with victims over time, an approach commonly known as “pig butchering.” This joint effort resulted in the largest-ever crypto seizure by the USSS, totaling approximately $225 million.
The USSS investigation targeted sophisticated fraud rings that prey on individuals, luring them into fake cryptocurrency investments. Victims of pig butchering schemes are gradually encouraged to deposit increasing amounts, only to eventually discover their funds have been stolen.
The $225 million in question was initially frozen by Tether in 2023, after being linked to pig butchering in a United States Department of Justice investigation. The stolen funds were tied to the perpetrators’ accounts at a non-Kraken centralized exchange. Identifying the victims and returning their funds presented a challenge, requiring significant knowledge of blockchain analytics.
In March 2024, we joined several cryptocurrency exchanges in an intensive, weeklong law enforcement sprint. Our compliance and investigative teams provided rapid, real-time responses to crucial information requests and our timely provision of transaction and account information was instrumental in identifying nearly 500 victims. This directly supported the USSS in obtaining the seizure warrant for the unprecedented $225 million confiscation of stolen funds.
We remain dedicated to cooperating with law enforcement to safeguard the cryptocurrency ecosystem. Our rapid-response approach and meticulous record-keeping reflect our ongoing commitment to security, transparency and protecting our customers. We also have strict policies and procedures to protect client privacy while supplying data when we have a legal obligation to do so.
We continue to actively participate in efforts aimed at identifying and stopping fraud, supporting victim recovery and maintaining trust within the crypto community.
“Protecting clients is our highest priority, and we’re proud to have supported efforts leading to this historic recovery of stolen funds. Our rigorous compliance practices, cutting-edge security protocols, and onchain investigative capabilities reflect our deep commitment to safeguarding client assets and preserving confidence in crypto. We will continue to fight fraud and help ensure the crypto ecosystem remains safe and secure for all users,” said David Zacks, Kraken Deputy Chief Compliance Officer.
If you believe you are a victim of cryptocurrency fraud, we encourage you to report your case to your local authorities and to the FBI Internet Crime Complaint Center at https://www.ic3.gov/. Your prompt reporting can help prevent future scams.
