$10 Million Cryptocurrency Laundering Scheme Unravelled, Three Arrested

On November 16, the U.S. Attorney’s Office for the Southern District of New York and the FBI announced the arrest of three individuals – Zhong Shi Gao, Naifeng Xu, and Fei Jiang – in connection with a $10 million cryptocurrency laundering scheme.

The accused individuals allegedly stole millions of dollars from U.S. banks and financial institutions between 2018 and 2022. They then converted the stolen funds into cryptocurrency and moved them into foreign crypto exchanges. The specific exchanges and cryptocurrencies involved have not been disclosed by the authorities.

To carry out the scheme, the accused allegedly transferred funds between accounts they controlled and falsely reported these transactions as unauthorized. The banks then credited the supposedly stolen amount to those accounts, effectively doubling some balances.

The three individuals also recruited accomplices, primarily foreign nationals from China and Taiwan residing in the United States. The scheme targeted bank branches in New York City’s metropolitan area and other locations.

Each of the accused faces charges that could result in a maximum prison sentence of 80 years. Additionally, they have been charged with one count of aggravated identity theft, which carries a mandatory two-year prison sentence.

Also Read: The Perils of Crypto Success: $720M Lost to Hacks and Scams in Q3

The arrests highlight the growing sophistication of cryptocurrency-related crimes and the importance of robust law enforcement measures to combat them.

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