In a significant development in the fight against cryptocurrency fraud, five individuals have pleaded guilty to their roles in a multinational scam that defrauded victims of approximately $37 million.
This case, prosecuted by the U.S. Department of Justice (DOJ), underscores the growing threat of crypto-related crimes and the increasing efforts by law enforcement to hold perpetrators accountable.
As digital currencies continue to gain popularity, so do the schemes designed to exploit unsuspecting investors.
A multinational crypto scam
The $36.9 million cryptocurrency fraud scheme targeted American citizens through a sophisticated operation that leveraged social media, dating apps, and messaging platforms to build trust with victims.
According to reports, the scammers posed as legitimate investment advisors or romantic interests, convincing individuals to invest in fake cryptocurrency opportunities.
Once trust was established through prolonged communication via calls and texts, the fraudsters directed victims to transfer funds to shell companies or fraudulent platforms, after which the money was funneled out of the country, ultimately being sent to Cambodia.
The five individuals who pleaded guilty admitted to various roles in the operation, including orchestrating the scam, laundering money, and managing the deceptive communications with victims.
Joseph Wong, Yicheng Zhang, Jose Somarriba, Shengsheng He, and Jingliang Su, who pleaded guilty, were scattered in multiple countries, including the US, Spain, China, and Turkey.
Zhang and Wong face 20-year prison sentences for money laundering conspiracy charges.
The other three fraudsters could receive up to 5-year sentences for operating an unlicensed money services business.
Zhang and Su have been in custody since November 2024, with Su scheduled to face a sentencing hearing in November.
The number of people who have pleaded guilty to this crypto scam operation has reached 8, with Daren Li and Lu Zhang who pleaded guilty on money laundering charges in 2024.
The rise of cryptocurrency fraud
Cryptocurrency fraud has become a pressing issue as digital assets like Bitcoin and Ethereum gain mainstream adoption.
The decentralized and often anonymous nature of cryptocurrencies makes them an attractive tool for criminals.
According to the Federal Trade Commission (FTC), consumers reported losing over $1 billion to crypto scams between January 2021 and March 2022 alone.
These scams often take the form of investment fraud, romance scams, or phishing schemes designed to steal personal information or funds.
The $37 million scam is just one of many high-profile cases in recent years.
For instance, the DOJ has also pursued cases involving larger sums, such as a $1.89 billion cryptocurrency fraud scheme announced in January 2024, where three individuals were charged or pleaded guilty.
These cases demonstrate a pattern of sophisticated operations that prey on the lack of regulation and public understanding of digital currencies.
As reported by Cointelegraph, the methods used in the $37 million scam are consistent with a growing trend of ‘pig butchering’ scams, where fraudsters build long-term relationships with victims before convincing them to invest in fraudulent schemes.
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