The U.S. government is set to confiscate 127,271 BTC, estimated at around $14 billion, linked to a vast online investment fraud orchestrated by Chinese émigré Chen Zhi, 38, alongside his Cambodia-based Prince Group Transnational Criminal Organization.
This initiative, announced on Monday by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), is part of a broad campaign against transnational cybercrime networks and scams that target U.S. and allied citizens.
Chen Zhi, also referred to as “Vincent Chen,” established a multi-billion-dollar enterprise in Cambodia, leveraging online scams to entice victims with fraudulent investment schemes labeled “pig butchering” scams.
These victims are nurtured over several months, convincing them to invest in phony platforms.
Details of the Pig-butchering Scam
As outlined in the indictment filed in the Eastern District of New York, Chen and his accomplices enticed global victims to fake cryptocurrency platforms, using social media and messaging apps to establish trust before absconding with their funds.
The organization reportedly operated from heavily fortified “scam compounds” in Cambodia, where individuals were coerced into conducting these schemes.
Prosecutors allege that the operation laundered billions in illicit profits through a web of shell companies, real estate, gambling operations, sextortion, and significant Bitcoin mining activities in Asia and the U.S.
The U.S. government has formally accused Chen’s network of moving and concealing at least 127,000 bitcoins, valued at billions, across various digital wallets.
Some individuals speculate that the 127,271 BTC were reportedly stolen in 2020, linked to the LuBian mining operation. These bitcoins have remained untouched, with the U.S. aiming for their forfeiture from the defendant.
However, the U.S. Justice Department confirmed that the funds are reportedly in U.S. custody but did not clarify how they were recovered or transferred. If accurate, the U.S. government would now possess 325,283 BTC, valued at over $37 billion.
In March, President Trump enacted an Executive Order to create a Strategic Bitcoin Reserve along with a U.S. Digital Asset Stockpile to centralize government-held cryptocurrency. This Reserve, which encompasses the $14 billion in seized bitcoins at the time, would serve as a store of value and not be sold.
Theoretically, if the 127,271 bitcoins from this scam were incorporated into the Reserve, they would also remain unsold.
Broad Corruption and Abuse
The indictment additionally highlights a network of corruption and violence supporting the enterprise, including bribes to foreign officials, intimidation, and physical violence to retain control over employees and safeguard the organization.
Chen faces charges of conspiracy to commit wire fraud and conspiracy to launder money, both of which carry potentially lengthy prison sentences.
Prosecutors are pursuing forfeiture of the bitcoins, crypto assets, and other properties associated with the alleged offenses.
The United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO) coordinated complementary sanctions on Chen Zhi, Prince Holding Group, and prominent associates.
Further Laundering Sanctions and Information
Alongside the Bitcoin seizure, the Treasury has finalized a regulation cutting off Huione Group, a financial services conglomerate based in Cambodia, from the U.S. banking system, according to the U.S. Treasury press release.
This company allegedly laundered billions in cryptocurrency pilfered by hackers linked to North Korea and Southeast Asia-based scam networks, including at least $300 million from other cybercrime activities.
OFAC’s sanctions target 146 entities and individuals associated with the Prince Group TCO, encompassing shell companies, real estate businesses, banks, and operators of luxury resorts in Cambodia and Palau.
The sanctions also include facilitators such as Rose Wang from Palau, who assisted Chen in establishing commercial ventures abroad, including a 99-year lease for a luxury resort on Ngerbelas Island.
Monday’s coordinated actions by the U.S. and U.K. follow earlier initiatives by the Treasury and FinCEN aimed at cybercriminals in Southeast Asia, including sanctions against operators from Myanmar and Cambodia, as well as money laundering networks connected to North Korea.
