In a major development in the fight against cryptocurrency-related crime, a Chinese national has pleaded guilty in a US court to laundering over $73 million obtained from victims of crypto investment scams. Daren Li, 41, admitted to conspiracy to commit money laundering and now faces up to 20 years in federal prison when sentenced in March 2024.
Massive “Pig Butchering” Crypto Scam
Li played a key role in an international criminal enterprise that duped crypto investors out of millions through so-called “pig butchering” schemes. In these scams, fraudsters build trust with victims online before convincing them to invest in phony crypto platforms, sometimes even claiming to have insider knowledge to make it seem like a sure bet. Victims may initially be allowed to withdraw money, encouraging them to pour in more funds before their accounts are frozen.
According to the UN, over 220,000 individuals in Southeast Asia alone are suspected of involvement in pig butchering operations, many lured to the region under false pretenses of legitimate work. Global losses from crypto scams reached a staggering $4.5 billion in 2023, per FBI data, with the true figure likely much higher.
Elaborate Money Laundering Network
Court documents reveal the sophisticated laundering system Li oversaw to obfuscate the illicit crypto proceeds. He directed co-conspirators to open US bank accounts for shell companies to receive victims’ funds via interstate and international transfers. Li and his associates then converted the money into USDT stablecoin and distributed it across crypto wallets under their control.
“While Li committed this crime from outside the United States, he was not beyond the reach of the Justice Department,” said Nicole M. Argentieri, chief of DOJ’s Criminal Division. “Today’s plea represents our continued commitment to working with our domestic and international partners to hold accountable all those responsible for crypto investment fraud…”
– DOJ Criminal Division Chief
Some of the laundered crypto ended up in accounts at Deltec Bank in the Bahamas, where authorities seized over $58 million in June as part of a probe into international money laundering and fraud. The bank denied any wrongdoing, claiming the crimes were committed by individuals.
Hefty Prison Sentence Looms
Li, a dual citizen of China and St. Kitts & Nevis, was arrested in April at Atlanta airport. He had been living between China, Cambodia, and the UAE according to DOJ. Now having entered a guilty plea, he faces a statutory maximum of 20 years in US prison at his March 3 sentencing.
The case underscores both the global scale and human toll of crypto investment scams, as well as the lengths fraudsters will go to launder dirty digital money across borders. While Li and his co-conspirator’s guilty pleas mark progress, the battle against crypto-fueled crime rages on.
According to the UN, over 220,000 individuals in Southeast Asia alone are suspected of involvement in pig butchering operations, many lured to the region under false pretenses of legitimate work. Global losses from crypto scams reached a staggering $4.5 billion in 2023, per FBI data, with the true figure likely much higher.
Elaborate Money Laundering Network
Court documents reveal the sophisticated laundering system Li oversaw to obfuscate the illicit crypto proceeds. He directed co-conspirators to open US bank accounts for shell companies to receive victims’ funds via interstate and international transfers. Li and his associates then converted the money into USDT stablecoin and distributed it across crypto wallets under their control.
“While Li committed this crime from outside the United States, he was not beyond the reach of the Justice Department,” said Nicole M. Argentieri, chief of DOJ’s Criminal Division. “Today’s plea represents our continued commitment to working with our domestic and international partners to hold accountable all those responsible for crypto investment fraud…”
– DOJ Criminal Division Chief
Some of the laundered crypto ended up in accounts at Deltec Bank in the Bahamas, where authorities seized over $58 million in June as part of a probe into international money laundering and fraud. The bank denied any wrongdoing, claiming the crimes were committed by individuals.
Hefty Prison Sentence Looms
Li, a dual citizen of China and St. Kitts & Nevis, was arrested in April at Atlanta airport. He had been living between China, Cambodia, and the UAE according to DOJ. Now having entered a guilty plea, he faces a statutory maximum of 20 years in US prison at his March 3 sentencing.
The case underscores both the global scale and human toll of crypto investment scams, as well as the lengths fraudsters will go to launder dirty digital money across borders. While Li and his co-conspirator’s guilty pleas mark progress, the battle against crypto-fueled crime rages on.
