The United States Justice Department has made significant strides in combating cryptocurrency-related crimes with the arrest of two Chinese nationals allegedly involved in a $73 million money laundering scheme.

According to an announcement made on May 17, Daren Li, a dual citizen of China and St. Kitts and Nevis, along with his associate Yicheng Zhang, a Chinese national residing in Temple City, California, orchestrated a sophisticated money laundering network. The scheme involved funneling illicit funds through multiple U.S. financial institutions and converting them into the stablecoin USDT.

The operation centered around "pig butchering" crypto scams, a nefarious tactic where fraudsters gain the trust of victims before persuading them to invest in fraudulent schemes. Once the victims transfer funds, the perpetrators vanish with the money.

Li and Zhang, along with their accomplices, utilized dozens of shell companies to open U.S. bank accounts, where victims were instructed to transfer millions of dollars. The funds were then moved to various domestic and international accounts, with some being flagged as having ties to Deltec Bank in The Bahamas.

The proceeds were ultimately converted into USDT, a popular choice among scammers due to its pseudo-anonymous nature. The DOJ noted that a cryptocurrency wallet associated with the scheme received over $341 million in virtual assets.

The arrests were made following Li's apprehension at Atlanta's airport in April and Zhang's capture in Los Angeles in May. Both individuals face charges of international money laundering and conspiracy to launder money, with a maximum sentence of 20 years for each count if convicted.

Pig butchering scams have become a pervasive issue, estimated to have defrauded victims of over $75 billion globally. Recent crackdowns by law enforcement agencies, including the freezing of $9 million in USDT stolen from 70 victims in 2023, demonstrate ongoing efforts to combat these fraudulent schemes.