The U.S. authorities is shifting to grab 127,271 BTC, valued at roughly $14 billion, tied to a sprawling on-line funding rip-off run by Chinese language émigré Chen Zhi, 38, and his Cambodia-based Prince Group Transnational Prison Group.
The motion, introduced Monday by the U.S. Treasury’s Workplace of International Belongings Management (OFAC) and Monetary Crimes Enforcement Community (FinCEN), comes as a part of a sweeping crackdown on transnational cybercriminal networks and scams focusing on U.S. and allied residents.
Chen Zhi, often known as “Vincent Chen,” had constructed a multi-billion-dollar empire in Cambodia via on-line scams that lure victims into fraudulent funding schemes often known as “pig butchering” scams.
Victims are cultivated over months and persuaded to deposit funds into faux funding platforms.
Pig-butchering rip-off particulars
Based on the indictment, filed within the Jap District of New York, Chen and his co-conspirators lured victims worldwide into faux crypto platforms, utilizing social media and messaging apps to construct belief earlier than stealing their funds.
The community allegedly operated out of closely guarded “rip-off compounds” in Cambodia, the place employees have been compelled and coerced into working the schemes.
Prosecutors declare the operation laundered billions in illicit proceeds via shell corporations, actual property, playing ventures, sextortion, and large-scale Bitcoin mining services in Asia and the USA.
The U.S. authorities formally alleged that Chen’s community moved and hid at the least 127,000 bitcoin, valued at billions of {dollars}, throughout quite a few digital wallets.
Some speculate that the 127,271 BTC have been reportedly stolen in 2020 and tied to the LuBian mining operation. The BTC have sat idle ever since, with the U.S. looking for forfeiture from the defendant.
However the U.S. Justice Division confirmed the funds are reportedly in U.S. possession and didn’t clarify how they have been recovered or transferred. If that is true, the US authorities would now maintain 325,283 BTC, value over $37 billion.
In March, President Trump signed an Govt Order making a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile to centralize government-held crypto. The Reserve, together with the $14 billion in seized bitcoin on the time, could be held as a retailer of worth and never bought.
Theoretically, if the 127,271 bitcoins from this rip-off have been added to the Reserve, they might stay unsold.
Massive-scale corruption and abuse
The indictment additionally describes an online of corruption and violence underpinning the enterprise, together with bribes to international officers, threats, and bodily abuse to take care of management over employees and defend the group.
Chen faces fees of conspiracy to commit wire fraud and conspiracy to launder cash, each carrying potential decades-long jail sentences.
Prosecutors are looking for forfeiture of the bitcoin and crypto holdings and different property tied to the alleged crimes.
The UK’s International, Commonwealth, and Growth Workplace (FCDO) coordinated parallel sanctions on Chen Zhi, Prince Holding Group, and key associates.
Further laundering sanctions and particulars
Along with the Bitcoin seizure, Treasury finalized a rule severing Huione Group, a Cambodia-based monetary companies conglomerate, from the U.S. banking system, in accordance with the U.S. Treasury press launch.
The corporate reportedly laundered billions in digital forex stolen by DPRK-linked hackers and Southeast Asia-based rip-off networks, together with at the least $300 million in different cybercrime proceeds.
OFAC’s sanctions goal 146 entities and people tied to Prince Group TCO, together with shell corporations, actual property corporations, banks, and operators of luxurious resorts in Cambodia and Palau.
The sanctions additionally lengthen to facilitators like Palau-based Rose Wang, who helped Chen set up industrial operations overseas, together with a 99-year lease for a luxurious resort on Ngerbelas Island.
Monday’s coordinated U.S.–U.Okay. motion follows earlier Treasury and FinCEN efforts focusing on cybercriminals in Southeast Asia, together with sanctions in opposition to Burmese and Cambodian operators and DPRK-linked cash laundering networks.
