DOJ Arrests Two In Connection To $73 Million Crypto Laundering Scheme

United States authorities have charged two foreign nationals for laundering $73 million in cryptocurrency investment scams, commonly known as “pig butchering.” This development was announced by the US Department of Justice (DOJ) on Friday, with an indictment unsealed in the Central District of California against the two suspects.

$73 Million Crypto Laundering Scheme Busted

In a press release, the DOJ confirmed the identity of both suspects in a cryptocurrency laundering case to be two Chinese nationals named Daren Li and Yicheng Zhang, aged 42 years and 38, respectively. Li, a dual citizen of China and St. Kitts and Nevis, was apprehended on April 12 at Hartsfield-Jackson Atlanta International Airport and subsequently transferred to the Central District of California. Meanwhile, Zhang was arrested in California on Thursday in Los Angeles.

The two are accused of participating in a pig butchering scam, where fraudsters convince the victims to invest large sums of money in some purported cryptocurrency scheme. Once the investment is substantial, the scammers disappear with the funds, leaving the victims with significant losses.

Court documents reveal that Li and Zhang managed an international syndicate that laundered the proceeds of these crypto scams. Victims are tricked into transferring large sums to US bank accounts controlled by shell companies. Thereafter, these funds are moved to international and local accounts, as well as cryptocurrency exchanges in a bid to hide the source or transaction history of these ill-gotten gains. 

So far, over $73 million was transferred to shell accounts at Deltec Bank in The Bahamas, where it was converted into Tether (USDT). Additionally, a cryptocurrency wallet received over $341 million in virtual assets as part of this scam.

Commenting on this case, Deputy Attorney General Lisa Monaco said:

Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims.

Monaco also added:

These arrests — made possible through the assistance of our international and U.S. partners — reflect the Justice Department’s ongoing commitment to disrupting the entire cybercrime ecosystem and stopping fraud across all financial markets.

Currently, Li and Zhang face charges of conspiracy to commit money laundering and six counts of international money laundering. If found guilty, they could each face a maximum penalty of up to 20 years in prison per count.

According to data from Tradingview, the total cryptocurrency market cap currently hovers around $2.366 trillion with an 8.05% increase in the last week.

Featured image from iStock, chart from Tradingview