DOJ Charges Chinese Nationals for Crypto Scam and Money Laundering

Two Chinese citizens, Daren Li and Yicheng Zhang, have been accused by the U.S. Department of Justice (DOJ) for allegedly planning a complex cryptocurrency scheme called “pig butchering” and laundering tens of millions of dollars. In this scam, people were tricked into believing they would receive large returns on their false cryptocurrency investments.

In the press release from the DOJ, Li and Zhang said that they carried out their plan by contacting possible victims with unwanted communications. They got to know these people and finally convinced them to invest in phony cryptocurrency offers. The victims were coerced into opening bank accounts and making significant deposits on the pretense of being shell companies.

Complex Money Laundering Operation

Once the victims transferred the funds, the money was moved to a bank in the Bahamas. From there, it was converted into USDT, the largest stablecoin in the market. Prosecutors revealed that Li and Zhang laundered a total of $73 million through this process. Furthermore, the crypto wallet linked to their activities had received over $340 million in digital assets.

U.S. Attorney Martin Estrada emphasized the seriousness of these scams, stating, “Sophisticated financial scams such as these are a dangerous threat to the financial well-being of all Americans. While my office will continue to root out and punish these deceitful schemes, I encourage everyone to educate themselves on pig butchering and other kinds of financial fraud to protect their families against such predatory activity. Vigilance is key.”

Li and Zhang now face multiple charges, including conspiracy to commit money laundering and six counts of international money laundering. If convicted, they could each face up to 20 years in prison for each count. This case highlights the ongoing efforts of the DOJ to combat financial fraud and protect consumers from sophisticated scams.

The charges against Li and Zhang underscore the importance of awareness and education in preventing financial fraud. The DOJ continues to work diligently to identify and prosecute those involved in such illegal activities, ensuring that justice is served and potential victims are safeguarded.