The U.S. Department of Justice has uncovered one of the largest scams in the history of cryptocurrencies — a $ 14 billion fraud scheme organized by Chinese businessman Chen Zhi through his Cambodian corporation Prince Group. The investigation revealed an extensive network of more than 30 countries where fictitious investment centers operated, causing billions of dollars in losses to investors around the world.
According to the materials of the Eastern District of New York court, Chen’s companies operated at least ten «hubs» in Cambodia, where they conducted so-called «pig-butchering» scams — frauds in which attackers create fake online connections to gradually convince victims to invest in fake crypto platforms.
U.S. law enforcement officials have already seized 127,271 bitcoins — about $ 14 billion at current exchange rates — as well as private jets, yachts, and other luxury property associated with Chen’s empire. The U.S. Treasury Department has imposed sanctions on Prince Group TCO and a number of affiliated entities in Palau, freezing their assets and prohibiting any transactions with U.S. citizens.
Additionally, the Financial Crimes Enforcement Network (FinCEN) identified another Cambodian company, Huione Group, which is suspected of laundering more than $ 4 billion and participating in thefts of $ 37 million related to North Korean hacker groups. Huione was completely disconnected from the US financial system.
According to a ZachXBT blockchain analyst, the bitcoin wallet associated with the investigation was previously mentioned in the Milky Sad report due to a private key vulnerability, which could have allowed the US authorities to gain control of the funds. The case is considered a turning point in Washington’s fight against international crypto-fraud networks and a signal to companies that exploit regulatory loopholes to move digital assets illegally.