$1.5 billion worth of 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, news broke from the U.S. District Court for the Eastern District of New York (EDNY) that the U.S. government is seeking to confiscate 127,000 bitcoins seized in the operation against Cambodia's Prince Group, valued at over $14 billion at current prices. If the confiscation is successfully executed, the U.S. government will become the largest single holder of bitcoin. The following is a detailed analysis of the case:

Over the past five years, criminals behind global pig-butchering scams have stolen tens of billions of dollars worldwide. Now, law enforcement agencies have launched one of the largest operations to date against this vast scam industry, targeting operators of modern slavery scam compounds across Southeast Asia. In this region, hundreds of thousands of human trafficking victims are forced to carry out scams for criminal syndicates.

This Tuesday, U.S. and British officials coordinated to crack down on a major criminal organization in Cambodia and its leader, who is alleged to run several notorious scam centers in the country. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced financial sanctions on 146 targets associated with the newly designated Prince Group transnational criminal organization, covering individuals and shell companies linked to the criminal empire. As part of a comprehensive operation involving the FBI, the U.S. Department of Justice (DOJ) also seized nearly 130,000 bitcoins, which were valued at about $15 billion at the time of the announcement—marking the largest cryptocurrency seizure in U.S. history.

OFAC pointed out that the Prince Group criminal entity consists of Cambodia-based Prince Holding Group, its chairman and CEO Chen Zhi, and their associates and business partners. The company claims to be one of Cambodia’s largest conglomerates, with businesses spanning real estate development and financial services. However, the DOJ alleges that Chen Zhi and other executives secretly turned Prince Group into one of Asia’s largest transnational criminal organizations, operating at least 10 scam compounds within Cambodia.

“As alleged, the defendants operated one of the largest investment fraud networks in history, fueling a rampant illegal industry,” said U.S. Attorney Joseph Nocella Jr. for the Eastern District of New York in a statement. “Prince Group’s investment scams have caused billions of dollars in losses to victims worldwide and immeasurable suffering.” The DOJ revealed that Chen Zhi has not yet been apprehended and remains at large.

UK Foreign Secretary Yvette Cooper stated: “The masterminds behind these horrific scam compounds destroy the lives of vulnerable people while hiding their illicit gains by purchasing property in London.” The UK has also imposed financial sanctions on Chen Zhi, Prince Group, and other related entities, freezing commercial assets and properties in London allegedly linked to Chen Zhi, including a mansion in North London valued at £12 million (about $16 million) and an office building in the City of London worth £100 million (about $133 million).

Emails sent by reporters to the media contact address listed on the “Prince Holding Group” official website were immediately returned.

“Today’s coordinated action is the most significant blow yet to Southeast Asia’s cybercrime syndicates,” said John Wojcik, a senior threat researcher at cybersecurity firm Infoblox specializing in Asian affairs. He previously tracked scam compounds and Southeast Asian cybercrime at the United Nations Office on Drugs and Crime (UNODC). Wojcik believes the group “is far from an ordinary criminal gang—it is one of the region’s largest cybercrime and money laundering entities, and a leader in criminal fintech and infrastructure.”

However, there is still 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 in 2020 from a Chinese crypto mining company called Lubian. The current indictment describes Lubian as part of Chen Zhi’s money laundering network, possibly as part of a criminal scheme to transfer scam proceeds into crypto mining hardware, generating “clean new coins” with no criminal record.

It remains far from clear who actually stole these funds in 2020, or whether a theft even occurred. “It’s possible that Chen Zhi fabricated the theft as part of a money laundering scheme to obscure the flow of funds,” said Tom Robinson, co-founder of Elliptic. “A second possibility is that the theft did occur, and the perpetrator may have been the U.S. government, but more likely someone else.” Robinson said that U.S. law enforcement may have subsequently tracked down the thief and somehow seized the funds from them.

Regardless of the crypto mining money laundering and mysterious theft, the indictment accuses Chen Zhi of being a core participant in the Chinese-speaking pig-butchering scam ecosystem. Over the past decade, organized crime groups active in Southeast Asia have operated dozens of scam compounds in Myanmar, Laos, and Cambodia. These compounds, mostly controlled by Chinese criminal groups, lure people from over 60 countries worldwide with fake job ads. Upon arrival, victims often have their passports confiscated and are forced to run various online scams targeting people globally; those who refuse may be beaten or abused. In addition to human trafficking and scams, these compounds are often linked to money laundering and online gambling.

The DOJ indictment against Chen Zhi and seven unnamed co-conspirators alleges that Prince Group operates over 100 companies in 30 countries, listing several allegedly related subsidiaries. The indictment also mentions that some local organizations, including a network in Brooklyn, New York, also served Prince Group. The charges state that since 2015, Chen Zhi and company executives have established and operated scam compounds across Cambodia, using their political influence in multiple countries to protect their criminal empire.

The indictment states: “Chen Zhi was directly involved in managing the scam compounds and kept records for each site, including documents tracking scam profits, which explicitly mention the term ‘pig-butchering’,” and also allegedly kept “ledgers of bribes to public officials.” According to reports, a document held by Chen Zhi showed that two scam centers were equipped with 1,250 mobile phones used to control 76,000 social media accounts. The indictment also alleges that Chen Zhi possessed images proving Prince Group’s use of violence against trafficked individuals in the scam compounds, including pictures showing people bleeding and being beaten.

The 127,271 bitcoins seized in this operation were valued at over $15 billion at the time of confiscation. This is the largest asset seizure in the history of the U.S. Department of Justice, setting a record for both cryptocurrency and any other form of funds. The previous U.S. law enforcement record was set in 2022, when 95,000 bitcoins (worth $3.6 billion) were seized in a case involving a Manhattan couple who later admitted to stealing funds from the Bitfinex exchange; earlier, in 2020, authorities seized $1 billion in bitcoin allegedly stolen by an anonymous hacker from the Silk Road darknet drug market. In addition, in June this year, UK police seized 61,000 bitcoins (worth $6.7 billion) from a Chinese woman suspected of investment fraud, a scale that surpassed the previous U.S. record but is still less than half the amount seized in the Prince Group case.

“It’s important to note that the extraordinary significance of this seizure lies not only in its scale, but also in its symbolism,” said Ari Redbord, Global Head of Policy at cryptocurrency tracking firm TRM Labs, noting that “this is still only a small fraction of the illicit profits from scam compounds.” He added: “These are not isolated scams, but factory-level operations relying on forced labor, amplified by the speed and scale of cryptocurrency, and interconnected through complex money laundering infrastructure spanning Cambodia, Myanmar, Laos, China, and beyond.”

Redbord believes this large-scale operation strikes at the operational and financial core of the scam compound ecosystem. In recent years, researchers tracking Southeast Asian scam compounds have found that these operations have rapidly expanded in scale and have used illicit proceeds to invest in increasingly sophisticated scam activities. Over the past two years, scam compounds have also begun to appear outside Southeast Asia, with related sites found in the Middle East, Eastern Europe, Latin America, and West Africa.

“By targeting the financial structures—shell companies, banks, exchanges, and real estate—used to move and hide illicit funds, the U.S. and UK are dismantling the economic engines that support these crimes,” Redbord said. “This is what 21st-century counter-threat finance should look like—coordinated, data-driven, and global.”