Argentina freezes $3.5m in USDT amid investigation into Rainbowex Ponzi scheme: report

A court in Argentina has ordered the seizure of a crypto wallet containing $3.5 million in Tether’s USDT stablecoin.

The Argentine Justice Department has taken control of a $3.5 million (USDT) wallet, which is part of a larger investigation into Rainbowex, a trading Ponzi scheme. As part of the crackdown, authorities have frozen not only the USDT wallet but also the cryptocurrency wallets and bank accounts of those involved in the alleged fraud, according to a report by iProUp.

While details remain unclear, the report reads that the investigation has received crucial help from experts at Lemon, the second-largest digital asset exchange in Argentina, and blockchain forensic firms Chainalysis and Qlue, which provided data and technical support to help authorities trace the funds and understand the flow of the illicit crypto.

The Rainbowex investigation has already led to more than 15 raids across Argentina. At least four people have been arrested, but several others are still on the run. Authorities are also working with Interpol to capture individuals from Malaysia who are believed to have been behind the creation and operation of Rainbowex.

Rainbowex promised investors extraordinary returns of 1% to 2% per day, or an annual interest rate of nearly 3,500%. It is estimated that tens of thousands of people from the town of San Pedro, Buenos Aires — where nearly 70,000 people live — suffered from the scheme.