Cryptocurrencies

The United States authorities arrested two people accused of organizing a money laundering scheme.

US authorities have arrested two people accused of masterminding a money laundering scheme, which involved funneling more than $73 million through US financial institutions and ultimately converting the funds into Tether (USDT).

The Justice Department announced on Friday that Darren Lee, 41, was arrested at the Atlanta airport on April 12, and Yicheng Zhang, 38, was taken into custody in Los Angeles on Thursday. The indictment against the couple was unsealed in a California court on Thursday, revealing their alleged roles in the scheme.

Li, Zhang and their colleagues allegedly ran a transnational criminal network that laundered millions through “pig slaughter” cryptocurrency scams, in which fraudsters gain the trust of victims, convince them to invest large sums, and then disappear with the funds.

The defendants allegedly instructed the conspirators to open U.S. bank accounts in the names of shell companies. The scammers convinced victims to transfer millions of dollars to these US bank accounts, which were then used to launder illicit funds.

According to the Ministry of Justice, the money was then distributed to various local and international bank accounts. The Ministry of Justice said,

“The fraud scheme involved more than $73 million laundered through US financial institutions to Bahamian bank accounts and converted into the virtual asset USDT, or Tether. The cryptocurrency wallet participating in the scheme received more than $341 million in virtual assets.

Darren Li and Yicheng Zhang face charges of conspiracy to launder money and six counts of international money laundering. If found guilty, they could be sentenced to a maximum of 20 years in prison on each count, potentially totaling up to 140 years behind bars.

Related: Tether freezes $5.2 million USDT linked to phishing scams

In a statement, Deputy Public Prosecutor Lisa Monaco acknowledged the challenges posed by cryptocurrency fraud, but stressed a commitment to holding perpetrators accountable.

Pig slaughter operations have become profitable for cybercriminals. In November 2023, the US Department of Justice seized $9 million from a scheme that targeted more than 70 US citizens. Given the increasing frequency and severity of this type of fraud, it has raised alarm bells among lawmakers and regulators in recent months.

Regulators have intensified their efforts to curb cryptocurrency scams and related incidents in the market. This can be seen in the proposed regulations and industrial guidelines issued by the authorities. While efforts to protect investors and preserve digital assets are welcomed, some regulations could become a stumbling block to the development of the sector.

magazine: US law enforcement agencies are stepping up efforts to combat cryptocurrency-related crimes

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