On July 8, 2025, the U.S. Department of Justice (DOJ) charged Michael Shannon Sims, 48, of Georgia and Florida, and another individual in the District of Puerto Rico for orchestrating a $650 million crypto fraud and foreign exchange Ponzi scheme through OmegaPro, operating from 2020 to 2022, per Coinlineup.com and @CNBC on X. The scam promised 300% returns via fake forex platforms, defrauding investors globally. The U.S. Secret Service, FBI, Tether, and TRM Labs collaborated to trace and freeze funds, primarily in Tether’s USDT, marking a major enforcement action against pig butchering scams, which contributed to over $9 billion in crypto losses in 2024, per the FBI.
The fraud utilized pig butchering, a tactic where scammers build trust through social media or dating apps, often posing as romantic partners, before luring victims into fake investment platforms. Funds were laundered across multiple blockchains using peel chains and mixers, with 144 OKX accounts linked to Vietnamese KYC documents and a Manila-based IP, suggesting organized scam compounds in Southeast Asia, per The Record and TRM Labs. A notable victim, Shan Hanes, former CEO of Heartland Tri-State Bank, embezzled $47.1 million, contributing to the bank’s 2023 collapse, per Blockchain.news. According to BleepingComputer, Tether reissued monies to the DOJ for victim reparations after freezing $225 million in USDT in 2023.
Tether’s T3 Financial Crime Unit, alongside TRON and TRM Labs, froze $225 million in USDT across seven wallet groups (A-G), each holding $3M-$135M, using a burn-and-reissue mechanism to transfer funds to a U.S. Secret Service wallet, per Blockchain.bakermckenzie.com. OKX identified 144 accounts involved, many accessed from a single Manila IP, aiding the DOJ’s LIFO tracing through 93 deposit addresses and 35 intermediary wallets, per 18 U.S.C. § 981. @okx on X (November 20, 2023) highlighted their role in freezing illicit USDT, emphasizing a commitment to a secure crypto ecosystem.
The case highlights the dangers in digital banking, as the FBI estimates that damages from crypto fraud would reach $5.8 billion in 2024. Deputy Attorney General Todd Blanche stressed balancing innovation with accountability, per Coinlineup.com. The DOJ’s focus on scammers, not exchanges, may drive stricter KYC/AML rules and advanced blockchain analytics, potentially affecting Tether and OKX operations. @the_yellow_fall on X warned of heightened exchange scrutiny post-indictment. The seized funds, part of a $3 billion laundering network, are under forfeiture proceedings to compensate over 400 victims, though no timeline is set, per DOJ statements. Investors should track updates via Coinlineup.com or @qaggnews on X for restitution progress.
