Authorities Uncovers $73M Crypto Scam, Two Arrested

United States authorities’ latest efforts in combating cryptocurrency fraud involved arresting two individuals for orchestrating a detailed money laundering scheme.

According to the report, the Fed apprehended Yicheng Zhang, 38, and Daren Li, 41, for their involvement in a criminal network that laundered over $73 million through US financial institutions. The arrests followed meticulous investigation and collaboration between law enforcement agencies.

Li was intercepted at Atlanta’s airport on April 12, while Zhang was apprehended in Los Angeles on Thursday. An indictment in a California court shed light on the duo’s roles in the elaborate scheme.

‘Pig Butchering’ Crypto Scams

The operation, masterminded by Li, Zhang, and their associates, revolved around ‘pig butchering’ crypto scams. In this scam, perpetrators lure victims into investing substantial sums before absconding with the funds.

Central to the scheme was establishing US bank accounts under the guise of shell companies. According to the Department of Justice, the laundered proceeds, totaling more than $73 million, were funneled through US financial institutions before being channeled to bank accounts in the Bahamas.

The scammers converted the funds into USDT, a popular stablecoin in the cryptocurrency market. A cryptocurrency wallet associated with the scheme received over $341 million in virtual assets, underscoring the scale of the operation.

Accordingly, the US DoJ has charged Li and Zhang with conspiracy to launder money and multiple counts of international money laundering. They could face a maximum of 20 years imprisonment for each count, amounting to 140 years behind bars.

Authorities Intensify Efforts to Combat Crypto Scams

Deputy Attorney General Lisa Monaco emphasized the challenges posed by cryptocurrency fraud while reaffirming the authorities’ commitment to holding perpetrators accountable. The prevalence of ‘pig butchering’ scams has raised concerns among law enforcement agencies, prompting intensified efforts to combat such illicit activities.

In November 2023, the US Justice Department seized $9 million from a similar scheme targeting numerous American citizens. Regulatory initiatives to curb crypto scams have gained traction recently, with authorities proposing stringent industry guidelines.

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