In a major crackdown, prosecutors have arrested two individuals in connection with a sophisticated scheme that involved laundering over $73 million through U.S. financial institutions, ultimately converting the funds to the cryptocurrency Tether (USDT).

Daren Li, 41, was apprehended on April 12 at Atlanta's airport, while Yicheng Zhang, 38, was arrested on Thursday in Los Angeles, according to a statement from the Justice Department released on Friday. An indictment charging both individuals was unsealed in a California court on Thursday.

Li, Zhang, and their accomplices allegedly managed an "international syndicate" that laundered proceeds obtained from "pig butchering" crypto investment scams. This fraudulent tactic involves scammers gaining victims' trust, convincing them to invest large sums of money, and then absconding with the funds. Concerns over such scams have been mounting among lawmakers and regulators in recent months.

Victims were deceived into transferring millions of dollars to U.S. bank accounts controlled by the syndicate. These funds were subsequently funneled through additional domestic and international bank accounts, facilitating the laundering process, the DOJ reported.

"The fraud scheme involved more than $73 million laundered through U.S. financial institutions to bank accounts in The Bahamas, and converted to the virtual asset USDT, or Tether," the DOJ stated. "A cryptocurrency wallet involved in the scheme received more than $341 million in virtual assets."

Li and Zhang face charges of conspiracy to commit money laundering and six counts of international money laundering, with each count carrying a maximum penalty of 20 years in prison.

"Cryptocurrency investment scams exploit the borderless nature of virtual currency and online communications to defraud victims," said Deputy Attorney General Lisa Monaco. "While fraud in the crypto markets takes on many forms and hides in many far-off places, its perpetrators aren’t beyond the law’s reach."

The arrests mark a significant effort by law enforcement to clamp down on fraudulent activities within the burgeoning crypto market, highlighting the ongoing battle against financial crimes in the digital age.