In a major crackdown on international cryptocurrency fraud, the US authorities have arrested two individuals accused of running a massive Ponzi scheme that defrauded millions of dollars. The illegal funds were allegedly converted into Tether (USDT), a stablecoin, to conceal their origin.
The US Department of Justice has unveiled an indictment against Daren Li and Yicheng Zhang, who were arrested separately in Atlanta and Los Angeles. The pair is believed to have led an international criminal network that defrauded millions of dollars through "pig butchering" schemes, where scammers gain the trust of victims, convince them to invest large sums, and then disappear with the money.
According to the Department of Justice, the accused instructed co-conspirators to open American bank accounts under the guise of shell companies. Unsuspecting victims were then convinced to transfer funds to these accounts, which served as a conduit for laundering illegal profits.
The money was subsequently dispersed to various domestic and international bank accounts, with the cryptocurrency portfolio linked to the program receiving over $341 million in virtual assets.
Li and Zhang are charged with conspiracy to commit money laundering and six counts of international money laundering. If convicted, they may face up to 20 years in prison for each count, potentially resulting in a combined sentence of 140 years in prison.
"Investment scams related to cryptocurrencies exploit the unregulated nature of virtual currency and online communication to deceive victims," said Deputy Attorney General Lisa Monaco. "While frauds on cryptocurrency markets take many forms and hide in many distant places, their perpetrators are not beyond the reach of the law."
The investigation was a collaborative effort between US authorities and international partners. The case highlights the growing importance of cryptocurrency regulation and the need for law enforcement agencies to stay vigilant in combating financial fraud.
