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Two Chinese Nationals Charged in $73M Cryptocurrency Scam

Updated: May 22

Two Chinese nationals have been charged by the U.S. Department of Justice with orchestrating a $73 million cryptocurrency scam involving money laundering and "pig butchering" investment schemes.

 Two Chinese nationals have been charged by the U.S. Department of Justice with orchestrating a $73 million cryptocurrency scam.
Credit: Foretoken Media 2024

WASHINGTON – The U.S. Department of Justice (DOJ) has announced charges against two Chinese nationals involved in orchestrating a large-scale cryptocurrency scam that laundered at least $73 million. Daren Li, 41, a dual citizen of China and St. Kitts and Nevis, and Yicheng Zhang, 38, a resident of Temple City, California, are accused of money laundering and six counts of international money laundering.

Li was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport, while Zhang was detained in Los Angeles. The pair allegedly ran an international syndicate involved in laundering funds from cryptocurrency investment scams, specifically "pig butchering" schemes.

Mechanics of the Cryptocurrency Scam

Pig butchering scams involve scammers luring victims into long-term cryptocurrency investment schemes. Victims were deceived into transferring millions of dollars to U.S. bank accounts of shell companies set up by Li and other conspirators.

The funds were then transferred to offshore accounts in the Bahamas, converted into Tether (USDT), and deposited into wallets allegedly controlled by Li and Zhang.

International Law Enforcement Collaboration

The DOJ emphasized the international collaboration that led to the arrests, showcasing their commitment to combating cybercrime. Deputy Attorney General Lisa Monaco described the vulnerabilities of borderless digital currencies.

“Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims,”

She added that despite the global nature of these crimes, perpetrators are not beyond the law's reach.

This case is part of a broader crackdown on cryptocurrency-related crimes following the collapse of FTX in November 2022. In January, the DOJ charged three individuals with running a $1.9 billion scam involving the DeFi platform HyperFund.

In April, Binance founder Changpeng 'CZ' Zhao was sentenced to four months in federal prison for money laundering violations.

Implications and Future Actions

If convicted, Li and Zhang face up to 20 years in federal prison. This case underscores the DOJ's intensified efforts to address fraud in the cryptocurrency markets.

Principal Deputy Assistant Attorney General Nicole M. Argentieri highlighted the critical role of money laundering in such scams, enabling fraudsters to move illicit proceeds and obscure their origins.


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