Prosecutors seek to seize $200,000 in crypto funds stolen from Ashtabula investor

CLEVELAND, Ohio – Federal prosecutors are seeking to claim $200,000 worth of cryptocurrency that was siphoned from an investor in Ashtabula.

Bitcoin valued at about $340,000 was fraudulently transferred from the investor’s virtual currency wallet in February, according to documents filed in U.S. District Court in Cleveland on Thursday. The victim did not seek the transaction.

Investigators analyzed a public ledger of crypto transactions to trace the funds to two accounts, the documents show. Authorities found that the bitcoin from the Ashtabula investor was converted to Tether, a cryptocurrency tied to the U.S. dollar and created by Tether Limited Inc.

In March, a month after the theft, Tether Limited Inc. froze the two accounts. Federal investigators filed a seizure warrant in July for the funds. Tether Limited later transferred $200,000 worth of cryptocurrency from the two accounts to a federal law enforcement fund.

Authorities are seeking to return the funds to the investor, though the value of the investment has dropped since the theft. Prosecutors must first go through forfeiture proceedings with the owners of the two addresses.

But the owners of the addresses are unknown, prosecutors said in the documents. A court filing indicates that the scheme originated in Nigeria.

The court filings in the case say FBI agents in Cleveland are “investigating cryptocurrency confidence fraud scams perpetrated on victims throughout the United States, including in the Northern District of Ohio.”