U.S. Justice Department Seizes $9M in Crypto from Romance Scam Ring

On November 21, 2023, the U.S. Justice Department announced a significant disruption in cybercrime activities, seizing nearly $9 million in Tether (USDT) from an international scam organization. This organization was involved in executing romance scams and cryptocurrency confidence scams, infamously known as “pig butchering.”

The scam network targeted over 70 victims across the United States, luring them with fake investment opportunities through non-existent trading platforms. Acting Assistant Attorney General Nicole M. Argentieri stated that this operation aimed at deceiving ordinary investors, leaving them with substantial financial losses. The U.S. Secret Service’s thorough analysis and tracing of cryptocurrency transactions were instrumental in identifying and seizing the fraudulent funds. These funds were quickly laundered through multiple cryptocurrency addresses and exchanged across various digital currencies, a tactic known as “chain hopping.”

The successful seizure is a result of the collaborative efforts between the Justice Department and the U.S. Secret Service. U.S. Attorney Ismail J. Ramsey emphasized the department’s commitment to justice for fraud victims, particularly in prominent cryptocurrency hubs like Silicon Valley. Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office reaffirmed the agency’s dedication to protecting the financial security of U.S. citizens.

The USSS San Francisco Field Office led the investigation, with Trial Attorney Georgiana MacDonald and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips managing the case and related forfeiture actions. Additionally, Tether’s cooperation in transferring the seized assets was acknowledged by the department.

Victims of cryptocurrency scams are encouraged to report incidents to the FBI’s Internet Crime Complaint Center (IC3) and the Federal Trade Commission’s (FTC) Consumer Sentinel Network.

This seizure is part of a broader effort by U.S. authorities to combat cryptocurrency-related fraud and crime. The U.S. government has previously demonstrated its capability to recover illegal funds in similar scenarios, such as the seizure of about 70,000 Bitcoins connected to the Silk Road in 2020. An October report by 21.co indicated that the U.S. government holds over $5 billion in seized cryptocurrency assets.

The Justice Department’s recent seizure of $9 million in Tether underscores the U.S. government’s ongoing commitment to combating cyber-enabled financial fraud and protecting investors. This case serves as a cautionary tale about the risks associated with cryptocurrency investments and the importance of vigilance in the digital finance landscape.

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Dismissal of Lawsuit Against Tether and Bitfinex Affirmed, Plaintiff Drops Appeal

The U.S. District Court for the Southern District of New York has finalized the dismissal of a class action lawsuit against Tether and Bitfinex. This lawsuit, initially filed by plaintiffs Shawn Dolifka and Matthew Anderson in 2021, targeted the stablecoin issuer Tether and its affiliated company Bitfinex. The primary allegation centered on the claim that Tether’s USDT stablecoin was not backed one-to-one with U.S. dollars as the company had stated. The plaintiffs argued that Tether and Bitfinex did not maintain adequate reserves for the USDT in circulation, thereby misleading investors and the market​​​​.

Judicial Proceedings and Outcome

The case saw a decisive turn when Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York issued a comprehensive 6-page decision. This decision included an order dismissing the class action lawsuit in its entirety, citing the meritless nature of the claims. Following the denial of Dolifka’s motion to amend his complaint, the plaintiffs chose not to appeal the judgment, effectively bringing the legal battle to a close. This outcome has been viewed as a significant legal victory for Tether and Bitfinex, as it upholds the dismissal of what was deemed a baseless lawsuit​​​​​​.

Implications and Future Considerations

Despite this legal victory for Tether and Bitfinex, the lawsuit highlighted ongoing concerns and controversies surrounding Tether’s claims about its USDT reserves. The case has brought to light the critical need for transparency and accurate disclosure in the cryptocurrency industry, particularly for stablecoins, which play a vital role in the market. This dismissal, while affirming Tether and Bitfinex’s position, also serves as a reminder of the legal and regulatory scrutiny that crypto entities can face​​​​.

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Tether Q3 Attestation: 85.7% Cash Reserves, $330M Loan Cut, $670M Research Spend

In a newly published assurance opinion, Tether Holdings Limited disclosed its financial standing for Q3 2023, substantiated by a comprehensive assessment conducted by BDO, a globally recognized independent public accounting entity. The attestation, dated October 31, 2023, reaffirms the veracity of Tether’s Consolidated Reserves Report (CRR) as of September 30, 2023, offering a detailed breakdown of the assets maintained by the Group.

Reserve Composition and Liquidity Maintenance

A notable revelation from the CRR is the record percentage of reserves Tether now holds in Cash and Cash Equivalents (C&Ceq), marking a historic 85.7%. A significant portion of these reserves, amounting to US$ 72.6 billion, is held in US Treasury Bills, depicting both direct and indirect exposure. This strategic allocation accentuates Tether’s ongoing commitment to ensuring liquidity and fostering stability within the broader stablecoin sphere.

Prudent Financial Management

Further emphasizing prudent financial management, the report elucidates a substantial contraction in secured loans extended by Tether, exceeding $330 million, augmenting confidence in the firm’s judicious asset management approach. This reduction aligns with Tether’s publicly declared ambition of diminishing, and eventually eliminating, secured loan exposure from its reserves, leveraging its surplus reserves and undistributed profits to attain this objective.

Investment in Research and Excess Reserves

Tether’s financial disclosure also unveiled investments exceeding $670 million in Q3 2023, and over $800 million year-to-date, funneled into industry-aligned research domains. Although these investments are external to the reserves backing the issued tokens, they showcase Tether’s long-term vision and resilience, particularly amid fluctuating gold and Bitcoin valuations. The report confirmed a stable excess reserves buffer, in spite of market volatilities, with a fair value evaluation causing a diminution of US $116 million for gold inventory and US $195 million for Bitcoin positions as of end Q3 2023.

Independent Verification and Assurance

BDO’s independent attestation reinforced that Tether’s consolidated assets, evaluated at a minimum of US$ 86.4 billion, surpassed its consolidated liabilities amounting to US$ 83.2 billion, with US$ 83.15 billion pertaining to digital tokens issued. This positive assessment underscores the robust financial health of Tether Group, even as it continues to diversify its investment portfolio into sustainable energy, Bitcoin mining, data, and P2P technology, with Q3 2023 investments in these sectors reaching nearly US$ 669 million, totaling around US$ 809 million since the onset of the year.

The Q3 attestation stands as a testament to Tether’s unwavering commitment to transparent and responsible financial stewardship, fortifying its position as a credible and stable entity in the crypto-finance ecosystem.

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Tether Intervenes on Terrorism Funding, Freezing 32 Cryptocurrency Addresses

Tether, the preeminent stablecoin firm globally, has once again exemplified its resolve against illicit financial activities by freezing 32 cryptocurrency addresses, implicated in terrorism and warfare funding within Israel and Ukraine. The move showcases the intensifying collaboration between cryptocurrency establishments and global law enforcement to counteract the rising tide of digital-financed crime.

Global Collaboration Against Cybercrime

Tether’s proactive stance signifies a broader trend within the cryptocurrency sector to neutralize the menace of cyber-financed terrorism and unlawful activities. The firm has a history of aligning with law enforcement agencies globally, aiding 31 entities across 19 jurisdictions thus far. The cumulative effect of these collaborations has been the freezing of assets totaling $835 million, predominantly linked to theft via blockchain and exchange hacks, with a lesser portion associated with various other crimes.

The collaborative endeavor spans a multitude of nations including, but not limited to, Brazil, Singapore, the Philippines, Germany, South Korea, Norway, Poland, Switzerland, Greece, Canada, Croatia, Italy, Argentina, Australia, Belgium, the Cayman Islands, China, Netherlands, El Salvador, Germany, Hong Kong, India, Ireland, Israel, Kyrgyzstan, New Zealand, Spain, Taiwan, the UK, Ukraine, Estonia, and the United States.

Focused Action in Israel and Ukraine

In the latest action, Tether has frozen 32 addresses holding $873,118.34, identified as conduits for illegal funding within Israel and Ukraine. The firm’s cooperation with the National Bureau of Counter Terrorism Financing (NBCTF) in Israel epitomizes the ongoing efforts to curb cryptocurrency-fueled terrorism and warfare.

Although the figure represents a minuscule fragment of the broader $445 billion global economic cost attributed to cybercrime, it underscores the novel capabilities blockchain technologies impart to the global financial architecture in terms of security and asset recovery.

Blockchain: A Double-Edged Sword

Despite the potential misuse, Tether’s CEO, Paolo Ardoino, emphasizes the traceability feature inherent in blockchain technology, dispelling the common misperception of cryptocurrency transactions being veiled in anonymity. “Cryptocurrency is a powerful tool, but it is not a tool for crime,” elucidates Ardoino, underscoring that every blockchain transaction is indelibly recorded, making fund movement traceable by anyone.

Tether’s unyielding support for law enforcement, however, does not deflect the skepticism and critique from some journalistic quarters and industry detractors. The criticism often juxtaposes the crypto industry’s swift action against the seemingly languorous or inadequately equipped traditional financial systems in combating criminal financing.

Tether’s Persistent Vigilance

Tether reiterates its enduring commitment to fostering responsible blockchain technology utilization and acting as a formidable barricade against cybercrime. This vigilance, aligned with global law enforcement agencies, accentuates the proactive measures the cryptocurrency domain is taking to stymie criminal use effectively.

The ongoing efforts embody a robust testament to the blockchain’s traceability, serving as a formidable deterrent against illicit activities, thereby elevating the security protocols within the global financial realm.

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Alameda Research Minted Over $39 Billion USDT, Amounting to Nearly Half of Tether’s Circulating Supply

A recent disclosure by Conor Grogan, Director at Coinbase, unveiled a noteworthy involvement of Alameda Research in the minting of Tether (USDT) tokens. Through meticulous on-chain data analysis, it was found that Alameda was responsible for minting a massive $39.55 billion of USDT. This figure represents roughly 47% of Tether’s circulating supply as of October 10, 2023. A prior report by Protoss had estimated the minting at around $36.7 billion, however, Grogan managed to update these figures by identifying additional wallets associated with the minting process.

Alameda’s Asset Management and USDT Minting

It was further revealed that the amount of minted USDT exceeded Alameda’s assets under management (AUM) at the pinnacle of the cryptocurrency market. This data was obtained from information submitted by Sam Bankman-Fried (SBF) to Forbes for their annual World’s Billionaires publication. The revelation implies a significant role played by Alameda in the USDT market, contributing vastly to the stablecoin’s circulating supply.

Redemptions and Offchain Coordination

The process of accurately determining redemptions remains challenging due to Tether’s offchain coordination of burns. Unlike other platforms, Tether lacks deposit addresses; hence entities send funds directly to the treasury for redemptions. Grogan speculated that assuming all USDT redemptions from FTX were from Alameda, they would have redeemed $3.9 billion USDT, with the majority transpiring over two days in May during an event termed the Luna implosion.

Public Reactions and Further Inquiries

The public’s reaction to these findings was mixed, with some individuals inquiring about the veracity of the corresponding deposits to Tether’s bank account against the minted USDT. Others questioned the methodology employed by Grogan in discovering the additional wallets, to which he responded by citing various sources including public information, court filings, and bankruptcy consolidations wherein the FTX estate was given key control of the Alameda accounts.

Insights from 2021 by Alameda’s Former CEO

In a discourse dating back to 2021, Sam Trabucco, the former CEO and crypto quant trader at Alameda Research, elaborated on USDT’s trading dynamics. Trabucco discussed the volatility of USDT’s premium over other stablecoins like USDC, attributing it to the complex creation and redemption process for USDT. He further explained how adept firms like Alameda could leverage these price deviations to align USDT’s price closer to $1, especially during instances where it diverged from this peg.

The significant quantity of USDT minted by Alameda Research underpins the close relationship between large crypto trading firms and stablecoin operations. Grogan’s findings provide a glimpse into the intricate dynamics of USDT’s minting and redemption processes, illuminating the mechanisms that assist in maintaining the stablecoin’s peg to the US dollar.

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JPEX Claims 70% of Voting Users Agree to Dividend Scheme; Lawmaker Warns of Debt Risks

Key Takeaways

JPEX, a virtual asset trading platform, has initiated a DAO stakeholder dividend scheme.

70% of participating users have reportedly agreed to the scheme.

Lawmaker Huang Junshuo warns that converting from creditors to shareholders could entail debt risks.

The platform is under suspicion for fraud, with at least 11 arrests and nearly HKD 1.37 billion involved.

Scheme Details and User Participation

JPEX, a virtual asset trading platform suspected of operating without a license, according to ON.cc, recently proposed a “DAO Stakeholder Dividend Scheme” for user subscription. According to the scheme, users can convert their dividends into an equivalent amount of Tether (USDT) with a two-year lock-in period. The voting for this proposal started on September 22, and JPEX claims that 70% of participating users have agreed to it. However, the platform did not disclose the total number of voters.

Lawmaker’s Warning

Accounting sector lawmaker Huang Junshuo, speaking on a radio program on September 23, warned that under this scheme, investors would only receive a maximum of 49% in dividends. This implies that the controlling stake still lies with JPEX. Huang cautioned that converting from creditors to shareholders does not necessarily mean the retrieval of investment funds. If the company incurs debt, investors could be liable.

Legal Troubles and Financial Risks

JPEX is currently under suspicion for fraud, with at least 11 people arrested and nearly 2,200 reports filed. The amount involved is approximately HKD 1.37 billion. The voting will continue until 8 PM on September 28 to decide whether to implement the scheme.

Financial Implications

The platform claims to offer 49% DAO stakeholder dividends, with a total value of approximately 400 million Tether (equivalent to about HKD 31.29 billion) for external subscription. Existing users can exchange their assets stored on the platform at a 1:1 ratio for dividends. The platform will buy back at 1% of the exchange price initially, 30% after one year, and 100% after two years.

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Paolo Ardoino: Tether Tests New Bitcoin Mining Platform, Moria, with Enhanced Software Control

In a recent update from Paolo Ardoino, the Chief Technology Officer of Tether, it was revealed that Tether is in the testing phase of its new Bitcoin mining platform named Moria. The announcement, made via Ardoino’s official Twitter handle on [Date], highlighted the integration of the first containers and miners into the platform.

According to the details shared, the Moria platform has undergone significant software enhancements. All Power Distribution Unit (PDU) management and miner interactions, including settings related to frequency and power, are now entirely software-driven. This level of automation ensures that any write actions on the platform necessitate multisig (multi-signature) approval, adding an extra layer of security.

Furthermore, Ardoino emphasized the platform’s peer-to-peer (P2P) capabilities, stating it’s “All P2P. Perfect for #IoT.” This suggests that Moria is designed to seamlessly integrate with Internet of Things (IoT) devices, potentially revolutionizing the way mining operations interact with smart devices.

While Ardoino described the advancements as “almost magic,” it’s essential to note that the full capabilities and potential applications of the Moria platform remain to be seen as it’s still in the testing phase.

It’s worth mentioning that while Tether is primarily known for its stablecoin, this move indicates a diversification into the Bitcoin mining sector. However, as with all technological advancements, only time will tell how this development will impact the broader cryptocurrency ecosystem. Beyond its flagship product, USDT, Tether is also expanding its business into Bitcoin mining and adoption.

On August 26, 2023, as reported by Blockchain.News, Ardoino addressed growing speculation surrounding a photo showcasing a container with the “Tether Energy” logo. Confirming the photo’s authenticity, he unveiled it as a depiction of a control room at a nearing-completion site in Latin America. This site, under the Tether Energy venture, aims to establish global partnerships for renewable energy production and Bitcoin mining. Ardoino emphasized the importance of geographically decentralizing Bitcoin mining, countering the current concentration in specific regions. The site is expected to commence operations in the coming weeks.

Earlier, on August 5, 2023, Ardoino shared insights into Tether’s development endeavors. The team is nearing the completion of advanced JavaScript libraries designed to interact with various cryptocurrency miners. These libraries, described as “really high-quality stuff,” will play a pivotal role in the Moria mining farm orchestration tool. This tool, based on technology from Holepunch.to, where Ardoino also serves as a co-founder and Chief Strategy Officer, facilitates the creation of peer-to-peer (P2P) programs without servers. Ardoino hinted at the tool’s potential expansion to monitor energy production, reflecting the increasing emphasis on energy efficiency in crypto mining.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Paolo Ardoino: Tether Ranks 22nd in US Treasury Holdings, Surpassing Mexico, Australia, and Spain

Tether, USDT issuer, the leading stablecoin in global circulation, now holds $72.5 billion in U.S. Treasury bills, positioning it as the world’s 22nd largest holder. This development coincides with China’s accelerated divestment from U.S. debt, which has seen a reduction of nearly $481 billion from its peak levels. The contrasting strategies highlight the evolving dynamics of global finance and raise questions about the stability of emerging markets.

Tether’s Growing Exposure to U.S. Treasuries

Paolo Ardoino, CTO of Tether and Bitfinex, announced on September 5, 2023, that Tether’s holdings in U.S. Treasury bills have reached $72.5 billion. (Read Exclusive Article contributed by Tether CTO to Blockchain.News)

This places the stablecoin issuer above sovereign nations like the United Arab Emirates, Mexico, Australia, and Spain in terms of U.S. Treasury holdings.

For many of these communities, USDt is a lifeline to protect themselves and their families from the insane inflation of their national currencies,

Ardoino tweeted.

China’s Accelerating Exit from U.S. Debt

In contrast, China’s ownership of U.S. Treasury debt has seen a significant reduction. According to Wall Street Silver, China’s holdings are down almost $481 billion from peak levels, and the rate of selling is accelerating. “You can see how the line is steepening. China is getting out of U.S. debt and buying Gold instead,” the financial commentary platform noted.

Emerging Markets and Financial Stability

The diverging strategies of Tether and China have elicited mixed reactions. Suraj Chawla of GPU.NET questioned the long-term stability of relying on Tether’s U.S. Treasury holdings as a “financial lifeline” for emerging markets.

Propping up economies on shaky grounds creates a facade of stability, not true resilience,

Chawla stated.

BeastOnChain, a crypto analytics platform, offered a different perspective.

This actually highlights the expansion of emerging markets into the Real World Assets (RWA) and the need for a diversified, borderless approach to help people worldwide engage in these emerging markets,

the platform tweeted.

Implications for Global Finance

The expanding U.S. Treasury portfolio of Tether and China’s accelerated shedding of U.S. debt both highlight evolving trends in international finance. Tether’s role as a financial “lifeline” for emerging markets comes with increased scrutiny regarding the long-term stability of these economies, given its substantial investment in U.S. Treasuries. Conversely, China’s pivot from U.S. debt to gold indicates a strategic realignment of its financial holdings, a move that could have implications for the global economic power structure.


As Tether climbs the ranks of global U.S. Treasury holders, its role in emerging markets becomes increasingly significant. However, questions about the stability of these markets persist. Meanwhile, China’s accelerated exit from U.S. debt could have far-reaching implications for global finance. 

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Tether’s Bitcoin Mining Site in Latin America Plans to Start Operations in a Few Weeks

In response to growing speculation surrounding a recently posted photo, Paolo Ardoino, CTO of Tether and Bitfinex, took to Twitter to clarify matters. The image in question showcased a container bearing the “Tether Energy” logo, leading to a myriad of questions and theories. Some tabloids questioned the site’s authenticity, while others speculated if Ardoino had digitally superimposed the logo onto the container.

Ardoino confirmed the photo’s authenticity, revealing it as a depiction of one of the control rooms at a site nearing its completion phase in Latin America. The exact location remains undisclosed to safeguard personnel from potential harassment, especially given the heightened scrutiny Tether often finds itself under.

Tether Energy (TE) represents a new venture by Tether, aiming to establish global partnerships with local entities. The primary objective of these collaborations is to provide capital, infrastructure support, development, and expertise, all in a bid to set up renewable energy production and Bitcoin mining sites. Ardoino stressed the significance of decentralizing Bitcoin mining geographically to counteract the current concentration in specific regions.

Addressing the logo’s placement on the container, Ardoino explained that the team had anticipated the photo’s widespread media coverage and wanted to brand it for that purpose. However, he also noted that using oversized Tether logos could potentially compromise the site’s physical privacy.

Ardoino’s tweet further highlighted the site’s ongoing progress, with the team gearing up to kickstart operations in the upcoming weeks. He also shared a 3D design of the mining site, offering followers an insight into its projected appearance in the near future.

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