U.S. Cracks Down on $73 Million Crypto Money Laundering Ring, Arrests Two Suspects

U.S. authorities have arrested two individuals linked to a $73 million money laundering scheme involving cryptocurrency Tether (USDT). The suspects face serious charges with potential sentences totaling 140 years.

U.S. authorities have apprehended two individuals accused of orchestrating a significant money laundering operation involving cryptocurrency. This scheme allegedly funneled over $73 million through American financial institutions, ultimately converting the funds into the cryptocurrency Tether (USDT).

The U.S. Justice Department reported that Daren Li was arrested at Atlanta’s airport in Georgia on April 12, while Yicheng Zhang was taken into custody in Los Angeles on May 16. The indictment against the pair, unsealed in a California court on May 16, details their purported involvement in the scheme.

Li, Zhang, and their associates are accused of managing an international criminal network that laundered millions of dollars from “pig butchering” crypto scams. In these scams, fraudsters build victims’ trust, persuade them to invest large sums, and then abscond with the money. The defendants allegedly directed accomplices to open U.S. bank accounts under shell company names. Victims were tricked into transferring millions into these accounts, which were then used to launder the illicit proceeds.

The DOJ explained that the money was dispersed to various domestic and international accounts, stating: “The fraud scheme involved more than $73 million laundered through U.S. financial institutions to bank accounts in the Bahamas and converted to the virtual asset USDT, or Tether. A cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets.”

Li and Zhang face charges of conspiring to launder money and six counts of international money laundering. If convicted, they each could face up to 20 years in prison for each count, amounting to a potential total of 140 years.

Deputy Attorney General Lisa Monaco recognized the challenges posed by cryptocurrency fraud but emphasized the commitment to hold offenders accountable. She stated, “The Department of Justice remains steadfast in its pursuit to dismantle these complex criminal enterprises and ensure that those involved are brought to justice.”

Pig butchering scams have become increasingly profitable for cybercriminals. In November 2023, the DOJ seized $9 million from a similar scheme that victimized over 70 Americans. The rising frequency and severity of such scams have alarmed lawmakers and regulators.

Regulators have intensified efforts to combat crypto scams, as seen in new regulations and industry guidelines. While these measures aim to protect investors and safeguard digital assets, some fear they may hinder the sector’s growth. The balance between regulation and innovation continues to be a contentious issue within the cryptocurrency community.

As the legal proceedings against Li and Zhang progress, the case underscores the ongoing battle against crypto-related fraud and the importance of vigilance in the rapidly evolving digital financial landscape.

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