U.S. bid to keep $163M in cryptocurrency provides glimpse into

It started with a message on LinkedIn.

She said her name was Anna and that she was working on a project in Toronto for a tech company. She said she had noticed improper large-volume trading in a cryptocurrency and it was the chance of a lifetime.

An Ypsilanti man identified in court documents only as D.C. apparently believed her. He opened accounts with Coinbase and Crypto.com when she told him to and then transferred the money into what she said was an offshoot of the cryptocurrency derivatives trading platform Deribit.

It wasn’t.

When it looked like he’d lost everything, he took her advice to reinvest. When his apparently profitable account was supposedly frozen, flagged for possibly illegal transactions, he paid tens of thousands of dollars to unfreeze it like she told him she’d done.

He lost close to $500,000.

He’d fallen prey to a scam called pig butchering, characterized by its combination of “prolonged emotional manipulation and sophisticated fraudulent investment schemes,” according to one recent study.

The details of the case come from a complaint filed this month in U.S. District Court for the Eastern District of Michigan, seeking the forfeiture of nearly $163 million in more than a dozen different cryptocurrencies in an overseas account seized by the federal government during a criminal investigation in 2022. Forfeiture would make the money government property.

It’s unclear where a broader criminal case might stand. A spokesperson for the U.S. Attorney’s Office for the Eastern District of Michigan declined to provide any additional information. The seizure doesn’t appear to match other high-profile pig butchering cases, and the scammers whose names and pseudonyms are included in the forfeiture complaint don’t appear to be defendants in other federal court cases.

But the document does provide a rare glimpse into the inner workings of a scam that has grown with the rise of cryptocurrencies and of organized cyberfraud operations overseas and that often robs its victims of huge sums of money.

“They call it pig butchering because the process that the scammer follows here is similar to what you would do in raising a pig for slaughter,” said Rajvardhan Oak, a doctoral student at the University of California at Davis who has interviewed pig butchering victims and published research on the structure of the scams. “You fatten up a pig so it’s a better slaughter for you.”

A Canton man identified only a P.N. received a text from a woman he didn’t know. She said her name was Susan and that her mother had told her to contact him about the possibility of marriage.

He said she had the wrong person, according to the complaint. She apologized but kept contacting him, eventually adding him to her friend group in the messaging app Line.

Text messages supposedly sent in error are among the most common entries into pig butchering scams.

“The scammer will initiate contact with you and will build up a relationship with you….