How a pig-butchering scam toppled a Kansas bank, and led to a record $225 million seizure

On June 18, 2025, the U.S. Attorney's Office for the District of Columbia filed a civil forfeiture complaint seeking roughly $225,364,961 in Tether, the largest seizure of funds tied to cryptocurrency scams in Justice Department history, according to TRM Labs, which assisted the tracing.

The money was the downstream residue of pig-butchering fraud: long cons in which scammers court victims online, then steer them into fake crypto platforms. Investigators followed victim deposits through 93 scam addresses, then through peel chains, structured hops and cross-chain swaps into 35 intermediary wallets and finally into seven USDT holding groups, TRM Labs reported. The laundering network moved roughly $3 billion in all.

The exchange OKX hosted 144 accounts showing coordinated behavior, including Vietnamese identity documents, overlapping Philippine IP addresses and deliberately wasteful transaction structuring, while Tether froze and then burned the targeted tokens so they could be reissued to the seizure, per TRM Labs.

The bank that vanished

The complaint's largest single victim was not an individual retiree but a bank. Heartland Tri-State Bank, a Kansas agricultural lender, became illiquid and failed in 2023 after its chief executive, Shan Hanes, embezzled about $47 million and sent it to wallets controlled by the scammers who had ensnared him, TRM Labs reported. On June 28, 2023, Hanes moved 3,116,350 USDT into a fraud-linked address. He was sentenced in August 2024 to 24 years in prison.

Across the scheme the Justice Department identified more than 430 suspected victims worldwide, at least 60 of them in the United States, according to TRM Labs.

The department moved to seize the crypto before making any arrests, a deliberate choice, former acting U.S. Attorney Phil Selden told CoinDesk. He framed the case less as a finance story than a human one, describing families losing their savings and small towns losing their banks, and noted that rural Kansas lacks the density of financial institutions found in major cities.

The mechanics repeat across nearly every case: - No legitimate exchange ever requires fresh deposits, taxes or insurance to release a withdrawal. - A platform introduced by an online acquaintance, and found in no app store, is a red flag, not an opportunity. - Balances shown on a dashboard are just pixels; only a completed withdrawal proves the funds exist. - Institutions should flag executives or customers making rapid, escalating crypto transfers to unfamiliar addresses.

Seizure is not the same as recovery, and forfeited funds return to victims slowly, if at all. But by acting before an arrest, prosecutors signaled that the government will chase the money first and the suspects second.

— Sources: [TRM Labs](https://www.trmlabs.com/resources/blog/us-doj-announces-largest-ever-seizure-of-funds-related-to-crypto-scams) · [CoinDesk](https://www.coindesk.com/policy/2025/07/02/dojs-225m-seizure-puts-human-cost-of-crypto-scams-in-focus-former-acting-us-attorney-says)