The U.S. Department of Justice and FBI are working together across multiple departments to jointly combat "Pig-butchering scams" encryption fraud.

In November 2025, the U.S. Department of Justice, in collaboration with the FBI, Secret Service, Treasury Department, and other agencies, announced the establishment of the “Scam Center Strike Force,” specifically targeting the “Pig-butchering scams” crypto assets fraud network originating from Chinese criminal groups. U.S. Attorney for the District of Columbia Jeanine Pirro revealed at a press conference that such scams resulted in losses of up to $135 billion for Americans in 2024, and her office has seized $480 million in stolen crypto assets and initiated a refund process, marking a shift in the U.S. approach to cross-border crypto crime from passive defense to active offense.

Transnational Scam Networks: The Operation Model and Scale Assessment of Pig-butchering Scams

The “Pig-butchering scams” are named after the process of “fattening up before slaughter” in pig farming. Scammers build trust through social media to lure victims into investing in fake Crypto Assets platforms. TRM Labs blockchain intelligence analysis shows that these operations mainly originate from special economic zones in Cambodia, Myanmar, and Laos, controlled by Chinese criminal groups. Scam centers often imprison tens of thousands of coerced workers and transfer funds through Tether (USDT), forming a complete black industrial chain.

The case provided by Prosecutor Pirro shows that the amount of fraud in a single case ranges from tens of thousands to tens of millions of dollars, with an average cycle of 3-6 months. A retired teacher in California was defrauded of 2.3 million dollars in pension by scammers posing as investment advisors; a Colorado entrepreneur was unable to withdraw 7.5 million dollars after investing in a fake trading platform. These funds were laundered through mixers, cross-chain bridges, and OTC channels, ultimately flowing back to physical businesses in Dubai and Hong Kong.

Composition of Strike Force: New Paradigm of Multi-Department Collaborative Operations

The newly established task force employs an unprecedented collaborative framework. The Department of Justice is responsible for criminal prosecution, the FBI leads the investigations, the Secret Service tracks the flow of funds, the Treasury Department analyzes on-chain patterns and implements sanctions through FinCEN, and the State Department conducts diplomatic pressure. This “five-in-one” model proved effective during the Cambodia operation in October 2025, when $14 billion worth of Bitcoin was confiscated, setting the largest seizure record in the history of the Department of Justice.

Sanction measures are quickly following up. The Office of Foreign Assets Control (OFAC) of the Treasury Department simultaneously announced sanctions against a military group in Myanmar that has been accused of human trafficking at scam centers. Also included in the SDN list are two Thai companies and a Thai national, who are accused of providing logistical support to Chinese criminal groups. This financial isolation measure aims to cut off the banking channels of the scam network.

Crypto Assets fraud crackdown key data

• Annual Loss: $135 Billion (2024 US Victims)
• Seized assets: $480 million (currently being returned)
• Historical confiscation: 14 billion USD (Cambodia operation)
• Investigative agencies: 5 major federal departments united
• Key Target: Chinese Background Criminal Groups
• Technical Means: On-chain analysis + Traditional investigation

On-chain Tracking Technology: Innovations in Blockchain Forensics and Fund Recovery

The core competitiveness of the enforcement power lies in the capability of blockchain data analysis. The FBI's Virtual Asset Unit (VAU) collaborates with commercial companies such as Chainalysis and TRM Labs to develop algorithms specifically designed to identify Pig-butchering scams. By analyzing transaction patterns, address associations, and behavioral characteristics, investigators can quickly identify controlling accounts and even freeze relevant assets before funds leave the exchange.

The fund return mechanism has also seen innovation. The Ministry of Justice has established a special compensation fund, which directly returns crypto assets to the victims' wallet addresses through court-appointed custodians, avoiding delays in the traditional banking system. In the first pilot phase, 37 victims have recovered 12 million USD, accounting for about 65% of the total losses. This high-efficiency return is based on the utilization of the immutable characteristics of blockchain— all fund flows can be traced and verified.

Global Collaboration Challenges: Jurisdictional Differences and Countermeasures

Transnational law enforcement faces jurisdictional conflicts. The governments of Cambodia and the Golden Triangle region have ambiguous attitudes towards fraud centers, with some even providing a protective umbrella. The U.S. State Department is exerting pressure through APEC and FATF (Financial Action Task Force) channels, successfully prompting Thailand to arrest three bank executives suspected of money laundering in October 2025. At the same time, the Department of Justice has initiated “long-arm jurisdiction” provisions to hold accountable any participants using the U.S. financial system.

Public-private cooperation is equally crucial. Apple and Google have been asked to strengthen app store reviews and remove 320 suspected scam apps; Meta and Telegram have committed to enhancing group monitoring and automatically flagging potential Pig-butchering scams accounts. Crypto Assets exchanges like Coinbase and Binance have joined the “Fraud Intelligence Sharing Alliance” to update the malicious address database in real-time. This model of public-private collaboration will become standard practice in the future.

The Encryption Security War and the Turning Point of Industry Legalization

The establishment of a joint task force by multiple departments in the United States marks a new phase in the regulation of Crypto Assets—shifting from legislative discussions to law enforcement actions. As the federal government mobilizes the entire national machinery to encircle cross-border scam networks, it not only demonstrates a zero-tolerance attitude toward Crypto Assets crimes but also unexpectedly provides the industry with a “sanitation certificate.” In the process of eliminating the bad apples, legitimate participants will gain clearer development space, while investors can engage in the market in a safer environment. This security battle may last for years, but its outcome will determine whether Crypto Assets can truly integrate into the mainstream financial system.