Two individuals have been arrested for allegedly laundering over $73 million through US financial institutions in a cryptocurrency investment scam, the Department of Justice (DOJ) announced. Daren Li (41) and Yicheng Zhang (38) were apprehended in Atlanta and Los Angeles, respectively, for their involvement in the scheme, which authorities say exploited “pig butchering” tactics to defraud victims.
Pig butchering scams involve fraudsters gaining victims’ trust over time, often through online interactions, before convincing them to invest large sums of money in fake cryptocurrency schemes. The scammers then disappear with the stolen funds. These scams have become a growing concern for lawmakers and regulators.
The DOJ alleges that Li and Zhang operated as part of an “international syndicate” responsible for laundering the proceeds of such scams. Victims were reportedly persuaded to send millions of dollars to US bank accounts controlled by the syndicate. The laundered funds were then transferred to other domestic and international accounts before ultimately being converted into Tether (USDT), a popular cryptocurrency stablecoin.
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According to the DOJ, a single cryptocurrency wallet linked to the scheme received over $341 million in virtual assets. Li and Zhang face charges of conspiracy to commit money laundering and six counts of international money laundering, with each count carrying a potential maximum sentence of 20 years in prison.
This case highlights the growing challenge of crypto-related financial crimes. As Deputy Attorney General Lisa Monaco stated, “Cryptocurrency investment scams exploit the borderless nature of virtual currency” to defraud victims across geographical boundaries. However, the DOJ’s actions demonstrate a commitment to pursuing perpetrators even within the complex world of cryptocurrency.
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