The U.S. Treasury Department recently imposed sanctions on Funnull Technology Inc., a Philippines-based company alleged to be a key player in a massive cyber fraud network enabling cryptocurrency scams. According to officials, Funnull is at the core of facilitating “pig butchering” scams—sophisticated social engineering schemes where fraudsters pose as romantic or financial advisors to lure victims into fake cryptocurrency investments.

Major Losses Linked to Funnull

U.S. victims have reported over $200 million in losses tied to websites linked to Funnull’s infrastructure. The average individual loss exceeds $150,000, underscoring the devastating financial impact of these scams. The Treasury also sanctioned Liu Lizhi, a Chinese national identified as Funnull’s administrator. These sanctions were issued under Executive Orders 13694 and 14144 and were coordinated with the FBI, which is releasing a cybersecurity advisory to assist private-sector organizations in identifying and dismantling fraudulent sites connected to Funnull.

“These actions reflect our commitment to disrupting the networks that power cybercrime and target Americans,” said Deputy Treasury Secretary Michael Faulkender.

How Funnull Facilitates Crypto Scams

Funnull is accused of purchasing IP addresses in bulk from cloud service providers and reselling them to scammers who host fake investment platforms and phishing sites. Additionally, the company reportedly used domain generation algorithms to mass-produce web addresses, making it easier for fraudsters to impersonate legitimate financial services.

In a particularly alarming instance in 2024, Funnull allegedly tampered with a code repository used by developers. This tampering secretly rerouted web traffic from legitimate sites to fraudulent platforms, including gambling sites tied to Chinese money laundering operations.

Key Roles Played by Funnull’s Administrator

Liu Lizhi, Funnull’s administrator, is accused of overseeing the company’s operations. This includes managing staff who assigned domains to scammers and maintained the technical infrastructure used to support fraud, phishing, and illicit gambling activities. Treasury officials highlighted Liu’s central role in enabling these cybercriminal operations.

Growing Concern Over Pig Butchering Scams

The Treasury’s actions come on the heels of a September 2023 alert from its Financial Crimes Enforcement Network (FinCEN), which warned about the rising prevalence of pig butchering scams. These scams are often linked to Southeast Asian crime groups that exploit victims of labor trafficking to perpetrate fraud.

These schemes rely on building trust with victims over time, often through social media or dating platforms, before convincing them to invest in fraudulent cryptocurrency schemes. The scammers frequently use fake trading platforms that mimic legitimate financial services, making it difficult for victims to detect the fraud until it’s too late.

Tips to Protect Yourself from Crypto Scams

To safeguard against these scams, consider the following tips:

  • Verify investment platforms: Always double-check the legitimacy of any trading platform or website before investing.
  • Be cautious of unsolicited messages: Avoid engaging with unknown individuals who approach you on social media or dating apps with financial advice.
  • Look for red flags: Be wary of anyone urging you to invest quickly or promising guaranteed returns.
  • Use trusted cybersecurity tools: Employ tools to detect phishing websites and protect personal data.

As cryptocurrency scams continue to evolve, it is essential for investors to stay informed and vigilant. The recent sanctions against Funnull Technology Inc. highlight the ongoing efforts by authorities to disrupt these fraudulent networks and protect individuals from financial harm.

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