US authorities arrested two people for running a money laundering scheme. The scheme involved moving more than $73 million through US banks and changing it into Tether (USDT).
The Justice Department said Daren Li, 41, was taken into custody at Atlanta’s airport on April 12, and Yicheng Zhang, 38, was arrested in Los Angeles on Thursday. Li, Zhang, and their cohorts allegedly operated a transnational criminal network. They purportedly laundered millions through ‘pig butchering’ crypto scams, a scheme where fraudsters gain victims’ trust, convince them to invest large sums, and then disappear with the funds.
Feds bust $73M crypto scam, arrest two masterminds $USDT https://t.co/csA6cHHA6r
— The Coin Detective (@acoindetective) May 18, 2024
Details of the Money Laundering Scheme
The defendants allegedly instructed co-conspirators to open U.S. bank accounts using fake company names. They tricked victims into sending millions of dollars to these American accounts, which were then used to launder the illicit funds. The Department of Justice (DOJ) states that they dispersed the money to various domestic and international bank accounts.
The fraud scheme involved transferring over $73 million from American financial institutions to bank accounts in the Bahamas. Subsequently, they converted the fund into USDT or Tether. A crypto wallet received over $341 million in virtual assets as part of the scheme, DOJ reported.
Moreover, authorities have charged Daren Li and Yicheng Zhang with conspiring to launder money and committing six counts of international money laundering. If proven guilty, they could each receive up to 20 years in prison for each charge, for a maximum of 140 years in jail.
Impact of Pig Butchering Scams
Online criminals are making a lot of money from pig butchering scams. In November 2023, the United States Justice Department took away $9 million from a scheme that cheated over 70 Americans. The increasing frequency and severity of these scams are causing growing concern among lawmakers and regulators.
Regulators are working harder to stop crypto scams and market problems by making new rules and guidelines. While protecting investors and keeping digital assets safe is good, some rules might slow down the sector’s growth. In a statement, Deputy Attorney General Lisa Monaco recognized the difficulties caused by cryptocurrency fraud. She highlighted the challenges posed by the anonymity and complexity of cryptocurrency transactions. However, Monaco assured that ongoing efforts are actively enhancing detection and enforcement measures.
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