🌎 Two Chinese Nationals Arrested in $73M Crypto Money Laundering Scheme

The United States Justice Department has arrested two Chinese nationals involved in a $73 million money laundering scheme.

According to an announcement on May 17, the accused funneled illicit funds through multiple U.S. financial institutions and later converted them to the stablecoin USDT. The accused, Daren Li, is a dual citizen of China and St. Kitts and Nevis. His associate, Yicheng Zhang, is a Chinese national residing in Temple City, California.

Li and Zhang, along with other accomplices, operated a money laundering network that washed millions of dollars acquired through “pig butchering” crypto scams. These scams usually involve bad actors gaining the trust of victims and asking them to make large investments in seemingly lucrative schemes. Once the victim transfers the funds, the fraudsters disappear with the money.

The duo instructed their accomplices to open multiple U.S. bank accounts under the guise of “dozens of shell companies.” The group made victims transfer millions into these accounts, with all activities monitored by Li and Zhang. Once the funds were in place, they were transferred to different domestic and international bank accounts.

Regulators flagged several accounts as having been created at Deltec Bank in The Bahamas. At least one of these accounts was allegedly operated using Li’s financial assistance. Funds from these accounts were converted to USDT, which has become a popular choice among scammers in recent years.

“A cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets,” the DOJ stated. Li was apprehended at Atlanta’s airport in Georgia on April 12. Subsequently, Zhang was caught in Los Angeles on May 16. The pair faces six counts of international money laundering and conspiracy to launder money. If proven guilty, they are looking at a maximum sentence of 20 years for each count.

Pig butchering scams are estimated to have made upwards of $75 billion from victims around the globe, according to recent research. Last month, the Brooklyn District Attorney’s Office cracked down on one such scam after multiple complaints were filed across the U.S. Earlier in 2023, the DOJ froze $9 million in USDT stolen from 70 victims via pig butchering scams.