Cryptocurrency fraud worth $73 million exposed in the US

Fraudsters convinced victims to transfer millions of dollars to US bank accounts, which were then used to launder illegal funds.

US authorities have arrested two individuals accused of involvement in a money laundering scheme. According to investigators, the attackers sent over $73 million through American financial institutions, converting the funds into the Tether USDT token.

Suspects Daren Li and Yicheng Zhang were arrested 16 times in the United States. An indictment against these individuals was unsealed in a California court on May 16, outlining their alleged actions in the scheme.

Li, Zhang and their associates allegedly led a transnational criminal network laundering millions of dollars in cryptocurrency scams known as "pig slaughter" or romance scams.
The “pig slaughter” scam is a type of fraud in which the victim is lured into making increasingly large cryptocurrency contributions to supposedly promising projects. Fraudsters use social engineering by finding contact with potential victims on social networks and dating apps.
The defendants allegedly instructed their co-conspirators to open bank accounts in the United States in the names of shell companies. Victims were persuaded to transfer millions of dollars into these accounts, which were then used to launder illegally obtained funds.

The money was subsequently distributed among various domestic and international bank accounts, according to the Justice Department. The Ministry of Justice stated:
“The fraudulent scheme involved over $73 million laundered through US financial institutions into bank accounts in the Bahamas and converted into the virtual asset Tether USDT. The cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets.”
Li and Zhang are charged with conspiracy to commit money laundering and six counts of international money laundering. If convicted, they face up to 20 years in prison on each count, for a total of 140 years in prison.

Deputy Attorney General Lisa Monaco stressed that despite the challenges associated with cryptocurrency fraud, the Department of Justice is committed to bringing those responsible to justice.

Pig slaughter scams have become lucrative for online criminals. With the frequency and scale of such scams increasing in recent months, legislators and regulators are raising serious concerns.
AML Crypto opinion
Regulators have stepped up measures to combat cryptocurrency fraud and incidents in the market. This is evident in new regulatory proposals and industry guidelines disseminated by authorities. While these efforts are aimed at protecting investors and preserving the safety of digital assets, some of the proposed rules could become a barrier to the development of the sector.

If you do become a victim of fraud, then we advise you to read our article: How to return stolen funds and, of course, you should seek help from professionals.

We also remind you that you can check your crypto wallet for purity, perform AML address verification, track a transaction - this and more you can do in our Btrace solution. Free AML wallet verification for every new user.
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