$1.5 billion Bitcoin seized: The collapse of the Southeast Asian "pig butchering" empire

Original Title: Feds Seize Record-Breaking $15 Billion in Bitcoin From Alleged Scam Empire

Original Source: Wired

Original Translation: Luffy, Foresight News

On October 14, the U.S. District Court for the Eastern District of New York (EDNY) reported that the U.S. government is seeking to seize 127,000 bitcoins confiscated during an operation against the Prince Group in Cambodia, which is valued at over $14 billion at current prices. If this seizure is successfully executed, the U.S. government will become the entity holding the largest amount of bitcoin. Here is a detailed analysis of the case:

Over the past five years, criminals behind global romance scams have stolen billions of dollars from around the world. Now, law enforcement has launched one of the largest operations to date against this massive fraud industry, targeting operators of modern slavery scam hubs in Southeast Asia. In this region, hundreds of thousands of human trafficking victims are forced to conduct scams for criminal groups.

On Tuesday, U.S. and U.K. officials took coordinated action against a large criminal organization in Cambodia and its leader, who is said to operate 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 bitcoins, which were valued at approximately $15 billion at the time of the announcement—this is the largest seizure of cryptocurrency by the U.S. to date.

OFAC noted that the Prince Group criminal entity is composed of the Cambodian domestic company Prince Holding Group, its chairman and CEO Chen Zhi, and their associates and business partners. The company claims to be one of the largest corporate groups in Cambodia, with businesses spanning real estate development and financial services. However, the DOJ alleges that Chen Zhi and other executives secretly transformed the Prince Group into one of Asia's largest transnational criminal organizations, operating at least 10 scam hubs within Cambodia.

"As alleged, the defendants controlled one of the largest investment fraud networks in history, fueling an illegal industry that has reached epidemic proportions," said U.S. Attorney for the Eastern District of New York Joseph Nocella Jr. in a statement. "The investment fraud perpetrated by the Prince Group has caused billions of dollars in losses to victims worldwide and has brought immeasurable suffering." The DOJ revealed that Chen Zhi has not yet been arrested and remains at large.

U.K. Foreign Secretary Yvette Cooper stated, "The masterminds behind these horrific scam hubs are destroying the lives of vulnerable people while hiding their ill-gotten gains in properties in London." The U.K. has also imposed financial sanctions on Chen Zhi, the Prince Group, and other associated entities, freezing assets and properties in London allegedly linked to Chen Zhi, including a £12 million ($16 million) mansion in North London and a £100 million ($133 million) office building in the City of London.

Journalists who emailed the media contact listed on the "Prince Holding Group" website received an immediate bounce-back.

"Today's coordinated action is the most significant blow to Southeast Asian cybercrime groups to date," said John Wojcik, a senior threat researcher at cybersecurity firm Infoblox, which focuses on Asian affairs. He previously tracked scam hubs and Southeast Asian cybercrime at the United Nations Office on Drugs and Crime (UNODC). Wojcik believes that the group "is far from an ordinary criminal gang—it is one of the largest cybercrime and money laundering entities in the region and a leader in criminal fintech and infrastructure."

However, there is an unresolved twist in the case. Cryptocurrency tracking company Elliptic pointed out in a blog post on Tuesday that the bitcoins seized by U.S. law enforcement appear to be the same funds stolen from a Chinese cryptocurrency mining company called Lubian in 2020. The current indictment describes Lubian as part of Chen Zhi's money laundering network, which may be a scheme to transfer scam proceeds to cryptocurrency mining hardware, generating "clean new coins" with no criminal record.

It remains unclear who stole these funds in 2020 or whether a theft actually occurred. "It's possible that Chen Zhi fabricated the theft as part of a money laundering scheme to obfuscate the flow of funds," said Elliptic co-founder Tom Robinson. "The second possibility is that the theft did occur, and the perpetrator may be the U.S. government, but more likely it was someone else." Robinson stated that U.S. law enforcement may have subsequently tracked down the thief and seized the funds from them in some manner.

Regardless of the cryptocurrency mining money laundering and the mysterious theft case, the indictment accuses Chen Zhi of being a core participant in the Chinese-language romance scam ecosystem. Over the past decade, organized crime groups active in Southeast Asia have operated dozens of scam hubs in Myanmar, Laos, and Cambodia. These hubs are often controlled by Chinese criminal groups that lure individuals from over 60 countries to work through fake job advertisements. Upon arrival at the hubs, victims often have their passports confiscated and are then forced to operate various online scams targeting people worldwide; if they refuse to comply, they may sometimes be beaten or abused. In addition to human trafficking and fraud, these scam hubs are often linked to money laundering and online gambling.

The DOJ's indictment against Chen Zhi and seven unnamed co-conspirators alleges that the Prince Group operates over 100 companies in 30 countries and lists several allegedly affiliated subsidiaries. The indictment also mentions that some local organizations, including a network in Brooklyn, New York, have also served the Prince Group. The indictment claims that since 2015, Chen Zhi and company executives have established and operated scam hubs throughout Cambodia, using their political