The 225.3 million USDT at the center of a U.S. civil forfeiture case is already under government control, but that does not determine who will ultimately receive the assets. Authorities must still resolve competing ownership claims, verify victims’ losses and establish how the seized stablecoins will be distributed.

A civil forfeiture complaint filed in June 2025 alleges that the stablecoins were connected to cryptocurrency investment fraud and laundering. The filing began a court process, but it did not issue a final ruling assigning the entire seized pool to victims. The U.S. Department of Justice’s complaint is available here.

The Wall Street Journal reported that several hundred people have submitted claims. Infiniweb, a gaming company based in the British Virgin Islands, has also asserted an ownership interest in the assets. That claim remains unresolved. If a court recognizes any portion of Infiniweb’s claim, the corresponding assets could be excluded from the amount available for victim compensation.

A possible settlement remains under consideration

The Journal reported that a Justice Department attorney said in August 2026 that the parties were approaching a possible settlement. The proposal could establish an administrator and give preference to victims who can connect their losses to identified wallets.

No allocation is final until the court approves an agreement or issues a ruling. As a result, the amount available to each claimant and the priority assigned to different claims remain unsettled.

The case illustrates the difference between seizing crypto assets and distributing them to victims. Blockchain tracing can show how funds moved, but legal proceedings must determine ownership, eligibility and the method for dividing the recovered property.

USDT offered an issuer-level recovery route

The recovery was possible in part because USDT is centrally issued. When presented with a legally valid request, authorities can work with Tether to restrict transfers involving specified tokens or addresses. Bitcoin has no equivalent issuer that can freeze units at the protocol level.

According to the Justice Department’s account of the operation, cooperation from Tether allowed investigators to secure control of the disputed stablecoins. That does not make USDT an enforcement system by itself. It means the issuer’s controls can provide a recovery route that is unavailable for assets governed solely by decentralized network rules.

Similar operational issues arise after other cryptocurrency seizures. Law enforcement still needs custody procedures, valuation records and a legally authorized process for holding or selling the assets. Bit2Me has announced a dedicated crypto-seizure service for police and courts, as reported here.

Issuer control can also create a chokepoint for illicit payment networks. A similar principle has appeared in efforts to restrict USDT flows connected to sanctioned Iranian trade routes, described here. Freezing an asset, however, remains separate from proving who should ultimately receive it.

Investigators traced a network rather than individual ownership

The complaint identifies approximately 434 suspected victims. Investigators contacted or interviewed 60 of them, and all but one reported losing money to a scam. Their combined reported losses were approximately $19 million.

Investigators extended their analysis beyond those interviews. They identified more than 1,200 suspected victim transactions originating from 93 deposit addresses. The funds moved through intermediate wallets before reaching 22 accounts within a larger group of 144 accounts at the OKX exchange.

According to the complaint, those 144 accounts processed approximately 263,000 deposits with a combined value of about $2.94 billion. That figure represents transaction activity, not victim losses or the amount available for repayment. Funds can pass through the same accounts repeatedly, causing aggregate turnover to exceed the value of the underlying assets.

The transaction map can help prosecutors argue that the accounts formed part of a laundering network. It does not, by itself, establish legal title to every token in the seized pool. That requires evidence connecting specific losses, claimants and transfers to the property before the court.

LIFO was used to reconstruct transfers

The complaint says investigators used a Last-In, First-Out, or LIFO, method to trace funds through wallets containing multiple deposits. Under this approach, the first outgoing transfer after a deposit is treated as drawing from the most recent incoming funds, up to the amount of that deposit.

For example, a wallet may already contain $3 million before receiving $100,000 from a suspected victim. If the wallet then sends $150,000, LIFO attributes the first $100,000 of that transfer to the victim’s deposit. Investigators can continue following that amount through later wallets after it has been combined with other assets.

LIFO is an accounting assumption used to reconstruct flows, not proof that a victim retained ownership of the exact tokens that left each wallet. Blockchain records show movement between addresses. Legal ownership depends on additional facts, including who controlled the addresses, the purpose of each transfer and the rights asserted by other claimants.

Compensation follows a separate evidentiary standard

Justice Department rules generally require a person seeking remission to document a specific financial loss directly caused by the relevant crime. Claimants must also disclose compensation they have already received from insurers or other sources.

The government does not ordinarily require every victim to trace their original funds into the forfeited property. The Justice Department’s Asset Forfeiture Policy Manual also states that tracing a particular victim’s money generally does not give that person priority over victims whose funds cannot be traced.

When the available pool cannot cover all approved losses, the usual approach is proportional distribution. The broader priority order places valid owners and lienholders first, followed where applicable by certain federal financial regulators and then eligible victims. Administrative costs may be deducted before the remaining balance is distributed.

The settlement route reported in this case could operate differently if the parties and the court approve case-specific terms that favor traceable claims. Such an agreement would not change the Justice Department’s general remission policy; it would determine how this particular disputed pool is handled.

Approved claims may not reflect current crypto prices

Even an approved claim does not necessarily return the amount a victim would hold if the stolen cryptocurrency had remained invested. Justice Department policy generally measures a victim’s loss using the property’s fair-market value at the time of the loss. Foregone interest, potential investment gains and expenses incurred while pursuing recovery are generally excluded.

Cryptocurrency volatility makes that rule significant. A person who lost tokens before a major rally may receive compensation based on the earlier dollar value. Conversely, a later decline could leave the forfeited pool worth less than it was when the assets were seized.

The Justice Department says its victim-compensation program has returned more than $13 billion since 2000. Large cases still require individual claims to be reviewed. In the OneCoin compensation process, more than $40 million was made available and an administrator was appointed to evaluate petitions submitted before a formal deadline.

Victims in the USDT case therefore need more than a blockchain address appearing in the government’s tracing analysis. They must document their own loss and satisfy whatever process the court ultimately approves.

Potential claimants should preserve transaction records

The Justice Department has directed people who believe they were affected to file a report through the FBI’s Internet Crime Complaint Center and include the code BT06182025. Filing a report preserves information for investigators but does not guarantee that a claim will be approved.

The FBI’s guidance for cryptocurrency investment-fraud victims asks for records that connect the claimant, payment and recipient. Useful evidence includes:

• Transaction hashes and sending or receiving wallet addresses
• The amount, asset type, date and time of each transfer
• Statements and withdrawal records from the exchange used
• Messages, emails and phone numbers linked to the alleged scammers
• Websites, applications and social-media accounts used in the scheme
• Police, regulator or IC3 report numbers already assigned

Records should be preserved even if an exchange account has been closed or a fraudulent platform has disappeared. Bank statements, screenshots and exported chat histories may help reconstruct transfers when a website is no longer accessible.

Potential victims should also be cautious about anyone charging an upfront fee to secure payment from the seizure. The Justice Department and administrators handling remission claims do not charge victims to submit a petition. Requests for additional cryptocurrency, taxes or “release fees” are common signs of a recovery scam.

Early reporting can help limit further losses

The FBI recorded $7.2 billion in reported U.S. losses from cryptocurrency investment fraud in 2025. The figure reflects complaints received by the agency and is not a complete measure of fraud because many victims do not report their losses.

Through Operation Level Up, the FBI said it had notified 8,103 potential victims by December 2025. Approximately 77% did not know they were being defrauded when contacted. The agency estimated that its warnings prevented about $511.5 million in additional losses.

Prompt reporting can give investigators more usable information about active wallets, exchange accounts and communication channels. It cannot guarantee recovery, but delays may give operators more time to move funds through services or assets where freezing them becomes more difficult.

Victims in the USDT case are still waiting because the matter has moved from blockchain tracing to legal allocation. The court must resolve competing ownership claims before the Justice Department can verify eligible losses and determine how the seized USDT will be divided.

This article is for informational purposes only and does not constitute legal or financial advice.