The U.S. government is moving to take 127,271 BTC, valued at about $14 billion, related to a vast internet investment scheme perpetrated by Chinese émigré Chen Zhi, 38, and his Cambodia-based Prince Group Transnational Criminal Organization.
As part of a broad campaign against transnational cybercriminal networks and fraud that target American and allied citizens, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced the action Monday.
Chen Zhi, also known as “Vincent Chen,” amassed a multibillion-dollar empire in Cambodia by tricking people into falling for “pig butchering” scams, which are bogus investment schemes.
Over the course of several months, victims are lured and persuaded to make deposits into fraudulent investment schemes.
Pig-butchering hoax information
The indictment, which was issued in the Eastern District of New York, claims that Chen and his accomplices used messaging apps and social media to gain the trust of victims all around the world before snatching their money.
Workers were allegedly tortured and pressured into operating the schemes at the network’s tightly guarded “scam compounds” in Cambodia.
The enterprise allegedly laundered billions of dollars in illegal profits through sextortion, gambling, real estate, shell corporations, and massive Bitcoin mining facilities in the US and Asia.
According to allegations made by the U.S. government, Chen’s network transferred and hid at least 127,000 bitcoins, worth billions of dollars, across several digital wallets.
The 127,271 BTC may have been taken in 2020 and linked to the LuBian mining activity.
Since then, Bitcoin has remained dormant as the United States pursues forfeiture from the defendant.
The U.S. Justice Department, however, acknowledged that the money is purportedly in American hands but provided no explanation for its recovery or transfer.
The US government would currently own 325,283 Bitcoin, or more than $37 billion, if this is accurate.
To consolidate government-owned cryptocurrency, President Trump signed an Executive Order in March establishing a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile.
The Reserve would not be sold and would instead be kept as a store of value, including the $14 billion in bitcoin that had been seized at the time.
Theoretically, the 127,271 bitcoins that were obtained from this scam would not be sold if they were deposited in the Reserve.
Widespread misuse and corruption
The indictment also details a network of violence and corruption that supported the business, including threats, physical abuse, and bribery of foreign officials to keep employees under control and safeguard the company.
Chen could spend decades behind bars if found guilty of conspiracy to commit wire fraud and conspiracy to launder money.
In addition to other assets connected to the suspected crimes, prosecutors are requesting that the bitcoin and cryptocurrency holdings be forfeited.
Chen Zhi, Prince Holding Group, and important affiliates were subject to parallel sanctions coordinated by the UK’s Foreign, Commonwealth, and Development Office (FCDO).
More information and sanctions related to money laundering
The U.S. Treasury press statement stated that, in addition to the seizure of Bitcoin, the Treasury finalized a rule that would cut off the financial services giant Huione Group, based in Cambodia, from the U.S. banking system.
According to reports, the corporation laundered billions of dollars in virtual money, including at least $300 million in earnings from other cybercrimes that were taken by scam networks operating in Southeast Asia and hackers with ties to the DPRK.
146 organizations and people connected to Prince Group TCO are the focus of OFAC’s penalties, including shell corporations, banks, real estate companies, and operators of exclusive resorts in Cambodia and Palau.
Facilitators like Rose Wang, a Palau native who assisted Chen in setting up business ventures overseas, including a 99-year lease for an upscale resort on Ngerbelas Island, are also subject to the fines.
The concerted U.S.-U.K. move on Monday comes after previous Treasury and FinCEN actions against cybercriminals in Southeast Asia, which included sanctions against money laundering networks connected to the DPRK and operators from Burma and Cambodia.
