Original Title: Feds Seize Record-Breaking $15 Billion in Bitcoin From Alleged Scam Empire
Original source: Wired
Original compilation: Luffy, Foresight News
Rhythm Note: On October 14, news from the U.S. District Court for the Eastern District of New York (EDNY) revealed that the U.S. government is seeking to confiscate 127,000 bitcoins seized in operations involving the Prince Group in Cambodia, which is valued at over $14 billion at current prices. If this confiscation is successfully executed, the U.S. government will become the entity holding the largest amount of bitcoins. Here is a detailed analysis of this case:
Over the past five years, criminals behind the global pig butchering scams have stolen hundreds of billions of dollars from around the world. Now, law enforcement has launched one of the largest operations to date targeting the operators of modern slavery scam camps across Southeast Asia. In the region, hundreds of thousands of human trafficking victims are forced to carry out scam activities for criminal groups.
On Tuesday, officials from the United States and the United Kingdom took coordinated action against a major criminal organization in Cambodia and its leader, who is said to have operated several notorious scam centers in the country. The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced that it has imposed financial sanctions on 146 targets associated with the newly identified Prince Group transnational criminal organization, covering individuals and shell companies linked to this criminal empire. As part of a comprehensive operation involving the Federal Bureau of Investigation (FBI), the U.S. Department of Justice (DOJ) also seized nearly 130,000 Bitcoin, which were worth about $15 billion at the time of the announcement—this is the largest seizure of cryptocurrency by the United States to date.
The OFAC pointed out that the Prince Group's criminal entity is composed of the local Cambodian company Prince Holding Group, its chairman and CEO Chen Zhi, and its associated personnel and business partners. The company claims to be one of the largest corporate groups in Cambodia, with business covering real estate development and financial services. However, the Department of Justice alleges that Chen Zhi and other executives secretly transformed the Prince Group into one of the largest multinational criminal organizations in Asia, operating at least 10 fraud parks within Cambodia.
“As alleged in the charges, the defendant controlled one of the largest investment fraud networks in history, fueling an illegal industry that has reached epidemic proportions,” said Joseph Nocella Jr., the U.S. Attorney for the Eastern District of New York, in a statement. “The investment fraud of the Prince Group has caused billions of dollars in losses to victims worldwide and brought immeasurable suffering.” The Department of Justice revealed that Chen Zhi has not yet been arrested and remains at large.
UK Foreign Secretary Yvette Cooper stated in a declaration: “The masterminds behind these horrific scam parks are destroying the lives of vulnerable groups while purchasing properties in London to hide their illicit gains.” The UK has also imposed financial sanctions on Chen Zhi, the Prince Group, and other related entities, and has frozen London commercial assets and properties allegedly linked to Chen Zhi, including a luxury house in North London valued at £12 million (approximately $16 million), and an office building in the City of London valued at £100 million (approximately $133 million).
The journalist sent an email to the media contact address listed on the “Prince Holding Group” official website, but it was immediately bounced back.
“Today's coordinated action is the heaviest blow to Southeast Asian cybercrime groups to date,” said John Wojcik, a senior threat researcher at the cybersecurity company Infoblox, which focuses on Asian affairs. He previously tracked scam parks and Southeast Asian cybercrime at the United Nations Office on Drugs and Crime (UNODC). Wojcik believes that this group “is by no means an ordinary criminal gang - it is one of the largest cybercrime and money laundering entities in the region and a leader in the field of criminal fintech and infrastructure.”
However, there is still an unresolved twist in the case. The cryptocurrency tracking company Elliptic pointed out in a blog post on Tuesday that the Bitcoin seized by U.S. law enforcement actually seems to be the same funds stolen from a Chinese cryptocurrency mining company named Lubian in 2020. The current indictment describes Lubian as part of Chen Zhi's money laundering network, which could be a suspected criminal scheme to transfer fraud proceeds to cryptocurrency mining hardware, generating “clean new coins” with no criminal record.
It remains unclear who exactly stole these funds in 2020, or whether a theft actually occurred. “It is possible that Chen Zhi fabricated the theft case as part of a money laundering scheme to obfuscate the flow of funds,” said Tom Robinson, co-founder of Elliptic. “The second possibility is that a theft did indeed occur, and the perpetrator may be the U.S. government, but it is more likely to be someone else.” Robinson stated that U.S. law enforcement may have subsequently tracked down the thief and somehow seized the funds from them.
Not to mention the money laundering from cryptocurrency mining and mysterious theft cases, the indictment accuses Chen Zhi of being a core participant in the Chinese-speaking “pig butchering” ecosystem. Over the past decade, organized crime groups active in Southeast Asia have operated dozens of scam parks in Myanmar, Laos, and Cambodia. These parks are often controlled by Chinese criminal groups, which lure individuals from over 60 countries to work by posting false job advertisements. After victims arrive at the parks, their passports are often confiscated, and they are then forced to engage in various types of online scams, targeting victims worldwide; refusal to comply can sometimes result in beatings or abuse. In addition to human trafficking and fraud, these scam parks are often associated with money laundering and online gambling.
The indictment by the U.S. Department of Justice against Chen Zhi and 7 unnamed co-conspirators alleges that the Prince Group operates over 100 companies across 30 countries and lists several allegedly related subsidiaries. The indictment also mentions that some local organizations, including a network in Brooklyn, New York, have also served the Prince Group. The allegations state that since 2015, Chen Zhi and company executives have established and operated scam parks throughout Cambodia, using their political influence in multiple countries to protect their criminal empire.
The indictment states: “Chen Zhi directly participated in the management of the scam parks and retained relevant records for each park, including documents tracking the profits from the scams, which explicitly mention the term 'killing pigs.'” It also allegedly involves “ledgers for bribing public officials.” It is claimed that a document held by Chen Zhi shows that the two scam centers were equipped with 1,250 mobile phones used to control 76,000 social media accounts. The indictment further accuses Chen Zhi of possessing images proving that the Prince Group used violent means against individuals sold to the scam parks, with documents containing pictures showing individuals bleeding and being beaten.
The 127,271 bitcoins seized this time had a market value of over $15 billion at the time of confiscation. This is the largest asset seizure in the history of the U.S. Department of Justice, setting a record both for cryptocurrency and any other form of funds. The previous record by U.S. law enforcement was set in 2022 when 95,000 bitcoins (valued at $3.6 billion) were seized, with a Manhattan couple later admitting to stealing the funds from the Bitfinex exchange; even earlier in 2020, law enforcement had seized $1 billion in bitcoins allegedly stolen by an anonymous hacker from the Silk Road darknet drug market. Additionally, in June of this year, British police seized 61,000 bitcoins (valued at $6.7 billion) from a Chinese woman suspected of investment fraud, a scale that surpassed the previous U.S. record but still fell short of half the amount seized in this case involving the Prince Group.
“It is important to note that the extraordinary significance of this seizure lies not only in its scale but also in its symbolic meaning,” said Ari Redbord, global policy chief at cryptocurrency tracking company TRM Labs, while pointing out that “this is still only a small portion of the illegal profits from the fraud park.” He added, “These are not isolated fraud cases, but factory-level operations that rely on forced labor, enhanced by the speed and scale of cryptocurrency, and interconnected through a complex money laundering infrastructure spread across Cambodia, Myanmar, Laos, China, and other regions.”
Redbord believes that this large-scale operation directly targets the operational and financial core of the scam park ecosystem. In recent years, researchers tracking scam parks in Southeast Asia have found that these parks are rapidly expanding and using illegal proceeds to invest in increasingly sophisticated scam activities. Over the past two years, scam parks have also begun to emerge outside Southeast Asia, with related bases discovered in the Middle East, Eastern Europe, Latin America, and West Africa.
“By targeting shell companies, banks, exchanges, and real estate that facilitate the transfer and concealment of illicit funds, the U.S. and U.K. are dismantling the economic engines that support these crimes,” Redbord said. “This is exactly what 21st century counter-threat financial action should look like – coordinated, data-driven, and global.”
