The U.S. Department of Justice announced Friday that it has indicted two Chinese nationals on charges of orchestrating a massive cryptocurrency fraud that resulted in the laundering of at least $73 million.
Darren Li, 41, a dual citizen of China and St. Kitts and Nevis, was arrested at Hartsfield-Jackson Atlanta International Airport on April 12, according to the Department of Justice. Yichen Zhang, 38, of Temple City, California, was arrested Thursday in Los Angeles.
The pair are charged with money laundering and six counts of international money laundering.
“Cryptocurrency investment fraud exploits the cross-border nature of virtual currencies and online communications to deceive their victims,” Deputy Attorney General Lisa Monaco said in a statement. She said: “Fraud in the crypto market takes many forms and lurks far away, but its perpetrators are not beyond the reach of the law.
Mr. Li and Mr. Zhang are accused of running an international syndicate to launder funds from a cryptocurrency investment scam known as “pig slaughter” by instructing anonymous co-conspirators to open bank accounts in the names of shell companies. ing.
Pig butchering scams are a type of long-term investment scam in which scammers lure victims into cryptocurrency schemes. The Justice Department said the victims were tricked into transferring millions of dollars to the U.S. bank accounts of shell companies set up by Lee and his co-conspirators.
Funds deposited into the account will be transferred to an offshore account in the Bahamas, converted to Tether (USDT), and deposited into a wallet allegedly controlled by Lee. According to the Justice Department, Zhang also allegedly received victim funds.
The pair are charged with $73 million in money laundering, but the Justice Department said $341 million worth of “virtual assets” were received from wallets connected to the pair.
“As alleged in the indictment, Mr. Li and Mr. Zhang laundered millions of dollars from victims of cryptocurrency investment fraud,” Chief Deputy Assistant Attorney General Nicole M. Argentieri said in a statement. We cooperated.” “Money laundering is essential to the success of these scams, with fraudsters moving illegal proceeds quickly and trying to disguise it as legitimate.”
The arrests were made through collaboration between U.S.-based law enforcement and international law enforcement agencies, and are part of the agency's ongoing commitment to disrupting the entire cybercrime ecosystem and stopping fraud across all financial markets. This reflects the company's efforts to achieve this goal. If convicted, Li and Zhang could face up to 20 years in federal prison.
Since the FTX collapse in November 2022, the U.S. Department of Justice and policymakers have stepped up investigations and prosecutions of crypto-related crimes.
In January, the Department of Justice indicted an Australian and two Americans for a $1.9 billion cryptocurrency fraud based on the so-called DeFi platform HyperFund.
And in April, U.S. Sen. Elizabeth Warren, a longtime cryptocurrency critic, filed a report with the Department of Homeland Security and the Department of Justice about the use of cryptocurrencies in facilitating the spread of child sexual abuse material (CSAM). and argued that cryptocurrencies are optional payments to children. That market.
Binance founder and former CEO Changpeng 'CZ' Chao in the most high-profile criminal case related to cryptocurrencies since Sam Bankman Freed was sentenced to 25 years in federal prison in March. He was convicted of money laundering violations and sentenced to four months in federal prison. During April.
Edited by Andrew Hayward
