Chinese National Pleads Guilty to Laundering $73 Million from Cryptocurrency Investment Scams
A Chinese national connected to Cambodian “pig butchering” operations has pleaded guilty to one count of conspiracy to commit money laundering in connection with a scheme to launder millions of dollars from cryptocurrency investment scams, the U.S. Department of Justice (DOJ) announced on November 12.
Daren Li, a 41-year-old from Shaanxi province, China, who also holds St. Kitts and Nevis citizenship, laundered over $73 million through a network of shell companies and international bank accounts, according to the DOJ. Li is scheduled for sentencing on March 3, where he faces up to 20 years in prison.
Li was arrested on April 12 at Hartsfield-Jackson Atlanta International Airport. The DOJ identified him as a resident of China, Cambodia, and the United Arab Emirates. His co-conspirator, Yicheng Zhang, a 38-year-old Chinese national residing in California, was arrested on May 16 in Los Angeles.
Nicole M. Argentieri, head of the DOJ’s criminal division, stated, “Although Li committed this offense from outside the United States, he was not beyond the reach of the Justice Department. Today’s plea reflects our ongoing commitment to working with domestic and international partners to hold accountable anyone responsible for cryptocurrency investment fraud against U.S. victims — no matter where they are located.”
In 2023, losses from crypto investment scams reached $4.5 billion, according to the FBI, although the real total is likely much higher due to unreported incidents. One notable scam type is “pig butchering,” in which fraudsters build online relationships with victims and convince them to invest in cryptocurrency platforms. Initially, victims can withdraw funds, encouraging further investments, only to have withdrawals later blocked.
Pig butchering scams are run on a large scale by companies with ties to organized crime, particularly in Southeast Asia. Myanmar and Cambodia are believed to have over 220,000 individuals involved, with some being trafficked under false job pretenses, according to the United Nations.
Li’s role in the laundering operation involved instructing co-conspirators to open U.S. bank accounts for shell companies and overseeing interstate and international wire transfers of scam victims’ funds. Li and his associates then converted these funds into virtual currency, primarily Tether’s USDT stablecoin, and distributed them to cryptocurrency wallets under their control.
Some of the laundered funds were sent to bank accounts at Deltec Bank in the Bahamas. In June, authorities seized over $58 million from the bank during an international money laundering investigation. Deltec Bank representatives told CoinDesk that the investigation was related to crimes committed by individuals, and they denied any wrongdoing.
