A sprawling international cryptocurrency scam has unravelled, with five men pleading guilty to laundering nearly $37 million stolen from unsuspecting U.S. victims. The complex operation, based out of Cambodia, exploited the rise of digital assets and the vulnerability of online relationships to build what officials are calling a sophisticated global fraud network.
According to BleepingComputer, the scheme relied heavily on a deceptive tactic known as “pig butchering”, a scam strategy in which victims are slowly “fattened up” through manipulated trust and false gains before being financially slaughtered. Fraudsters targeted Americans through dating apps, social media platforms, and text messages, enticing them into fake investment opportunities that appeared legitimate and lucrative.
But the supposed gains were mere illusion. Behind the slick digital interfaces and smooth-talking profiles was an intricate laundering system stretching from U.S. cities to South-east Asia and offshore banking havens.
A Criminal Web with Global Reach
At the heart of the laundering operation was 32-year-old Joseph Wong, who managed a key network from Los Angeles. Wong helped move victim funds into bank accounts under fake names and shell companies, disguising their illicit origins before converting them into cryptocurrency and moving them overseas.
Another critical player, Yicheng Zhang, played a logistical role, controlling bank accounts through which millions in stolen funds passed. Prosecutors say the ring funnelled much of the money into Axis Digital Limited, a shell company established specifically for this scheme.
With a network of co-conspirators, they opened offshore accounts—including in the Bahamas—and moved the stolen dollars as Tether (USDT), a popular stablecoin, to Cambodia-based operatives. This not only helped obscure the funds’ origins but also allowed the scammers to operate beyond the immediate reach of U.S. law enforcement.
To date, eight people have pleaded guilty in connection to the conspiracy. Among them are Wong, Zhang, and Daren Li, who—along with Zhang—was accused of laundering over $73 million across multiple channels.
Victims Believed They Were Getting Rich
What made the scam so successful, experts say, was its emotional manipulation. Victims were first approached under romantic or friendly pretences, often over dating apps or seemingly innocuous messages. Once rapport was established, scammers introduced the idea of investing in cryptocurrency platforms they claimed to be using themselves.
These platforms would display fake profits, making victims believe their money was growing exponentially. Encouraged by early “success,” many deposited more, even taking out loans or draining savings. But the platforms were controlled by the scammers, and the money was never invested—only rerouted.
By the time victims realised they’d been deceived, the money had been laundered through multiple entities and jurisdictions, often vanishing without a trace.
A Surge in Crypto Crimes
This case is part of a broader trend that has law enforcement deeply concerned. The FBI reports that cryptocurrency-related scams surged in 2024, with losses exceeding $6.5 billion—an all-time high.
“These crimes combine traditional romance scams with modern technology, creating an extremely dangerous and emotionally manipulative mix,” said an FBI spokesperson.
The rise of crypto fraud has also exposed the challenge of regulating a borderless financial tool. Unlike banks, many digital asset platforms operate without centralised oversight, making it difficult to trace or freeze funds once they’ve been transferred.
Law Enforcement Tightens the Net
Despite these challenges, U.S. authorities are ramping up efforts to combat crypto-related crime. In this case, federal agents followed a trail of shell companies, digital wallets, and foreign accounts, eventually unmasking the network behind the fraud.
By pleading guilty, the five men now await sentencing. Their convictions mark a significant victory for prosecutors seeking to hold crypto criminals accountable, though the broader fight continues.
The case also serves as a stark reminder to the public: in the age of digital assets and social media, scams are evolving—and becoming more persuasive. As one investigator noted, “If it sounds too good to be true, it probably is.”
