$73m Cryptocurrency Scam: Two Chinese Nationals Indicted by DOJ
Two Chinese nationals have been arrested by the United States Justice Department for their involvement in a money laundering scheme worth $73 million. The accused individuals, Daren Li and Yicheng Zhang, operated a network that laundered illicit funds through multiple U.S. financial institutions and converted them into the stablecoin USDT. Li, who holds dual citizenship in China and St. Kitts and Nevis, was apprehended at Atlanta’s airport in Georgia, while Zhang, a Chinese national residing in Temple City, California, was caught in Los Angeles. The pair, along with their accomplices, ran a money laundering operation that exploited victims through “pig butchering” crypto scams. These scams typically involve gaining the trust of victims and convincing them to invest large sums of money in fraudulent schemes, only to disappear with the funds once they are transferred. Li and Zhang instructed their associates to open numerous U.S. bank accounts using shell companies, through which victims were made to transfer millions of dollars. The funds were then moved to various domestic and international bank accounts. Regulators identified several accounts at Deltec Bank in The Bahamas that were flagged as being part of the scheme, with at least one allegedly operated with Li’s assistance. The funds from these accounts were ultimately converted into USDT, a popular choice among scammers. The Justice Department stated that a cryptocurrency wallet involved in the scheme received over $341 million in virtual assets. Li and Zhang now face charges of international money laundering and conspiracy to launder money, each of which carries a maximum sentence of 20 years if proven guilty. Pig butchering scams have reportedly generated over $75 billion in profits from victims worldwide. This recent arrest follows the crackdown on a similar scam by the Brooklyn District Attorney’s Office, as well as the freezing of $9 million in stolen USDT by the Justice Department in 2023.
