Scams

Tether has frozen roughly $4.2 billion in USDT tied to criminal investigations, with about $3.5 billion of that occurring since 2023. The company also worked with the U.S. Department of Justice this week to restrict nearly $61 million linked to pig-butchering scams. USDT's circulating supply now exceeds $180 billion.

On 28 February 2026, U.S. authorities reported seizing more than $580 million in crypto assets linked to Southeast Asia-based scam operations. Officials estimate Americans lose around $10 billion per year to such schemes, with $1.5 billion taken in the first three quarters of 2025. The interagency Scam Center Strike Force, created in November 2025, is using blockchain forensics to trace funds, dismantle fraud infrastructure, and pursue restitution for victims.

In a Thursday notice, the US Department of Justice said it froze, seized and began forfeiture proceedings on more than $578 million in digital assets tied to criminal groups. The actions, carried out over three months by the District of Columbia's Scam Center Strike Force established by US Attorney Jeanine Pirro in November, target Southeast Asian crypto-related fraud.

Bitcoin Depot said it has implemented a uniform ID check for every transaction across its U.S. crypto ATM network. The policy took effect in early February and replaces varying thresholds at kiosks, making even small cash-to-crypto purchases subject to verification.

In early 2025, on-chain investigator ZachXBT alleged that Axiom senior employee Broox Bauer abused internal tools to view private wallet data and track user activity. The claims include sharing screenshots of sensitive dashboards, compiling KOL wallet lists, and discussing a February 2026 plan to help a colleague earn $200,000 through access to Axiom's systems. The investigation also notes difficulty in definitively tying specific meme coin trades to insider activity without internal trading logs.

In 2025, Chainalysis reported that ransomware incidents climbed by about 50%, with attackers shifting their focus toward small and mid-sized businesses instead of major corporate targets. Nearly 8,000 leak events were logged, yet on-chain ransom payments fell to $820 million, down eight percent year-on-year. Analysts linked the falling payouts to stricter enforcement against laundering networks, cheaper dark‑web access, and AI‑driven tools that have boosted low‑cost but less profitable attack campaigns, while separate data showed crypto theft of $370.3 million in January 2026.

Chainalysis' annual report finds ransomware leak events climbed 50% in 2025 to nearly 8,000, while on-chain ransom payments slipped 8% to $820 million. The firm cites regulatory pressure, enforcement against laundering infrastructure, and more refusals to pay, prompting a pivot toward small and mid-sized targets.

TRM Labs reports that AI‑enabled crypto fraud activity rose about 500% over the past year, with generative tools accelerating phishing, identity theft, and laundering. Chainalysis says these operations earn 4.5 times more per scheme and generate 9 times more daily transactions than non‑AI scams. Recent incidents include large holder losses and U.S. seizures linked to pig‑butchering rings.

IoTeX committed to fully compensate users affected by the February 21 ioTube bridge exploit that drained $4.4 million, with payouts funded from treasury regardless of asset recovery. Mainnet operations resumed on February 24 following security upgrades, and a tiered claims process starts Friday, February 27. The patch blacklisted 29 attacker addresses and froze about 45 million IOTX.

On 25 February 2026, federal prosecutors in the Eastern District of North Carolina announced the seizure of more than $61 million in Tether (USDT) allegedly tied to a large-scale "pig butchering" cryptocurrency scam. The operation, led by Homeland Security Investigations in Raleigh, relied on blockchain tracing tools and cooperation from Tether, which froze suspect wallets and moved the funds to government-controlled accounts. Authorities indicated the assets are now in federal forfeiture proceedings amid a wider surge in AI-driven and social engineering-based crypto fraud losses.