US charges Cambodian executive in massive crypto scam and seizes more than US$14 billion in bitcoin

NEW YORK: The United States government has seized more than US$14 billion in bitcoin and charged the founder of a Cambodian conglomerate in a massive cryptocurrency scam, accusing him and unnamed co-conspirators of exploiting forced labour to dupe would-be investors and using the proceeds to purchase yachts, jets and a Picasso painting.

In an indictment unsealed on Tuesday (Oct 14), Brooklyn federal prosecutors charged Prince Holding Group chairman Chen Zhi with wire fraud conspiracy and money laundering conspiracy. At the same time, US and British authorities imposed sanctions on Chen’s company, which is involved in real estate development and financial services, and the Treasury Department declared it a transnational criminal organisation.

Chen, 38, is accused of sanctioning violence against workers, authorising bribes to foreign officials and using his other businesses, such as online gambling and cryptocurrency mining, to launder illicit profits.

Chen was the “mastermind behind a sprawling cyberfraud empire”, Assistant Attorney General John Eisenberg said. US Attorney Joseph Nocella called it “one of the largest investment fraud operations in history”.

At one point, prosecutors said, Chen bragged that the so-called “pig butchering” scam was pulling in US$30 million a day.

A DOMINANT PLAYER IN A GROWING SCHEME, AUTHORITIES SAY

Last year, Americans lost at least US$10 billion to Southeast Asia-based scams, a 66 per cent increase from 2023, the Treasury Department said, calling Prince Holding Group a “dominant player” in that space. Chinese authorities have been investigating the company for cyber scams and money laundering since as early as 2020, according to court records reviewed by the US Institute of Peace.

Chen, a native of China who is also known as “Vincent”, remained at large as of Tuesday, prosecutors said. If convicted, he faces up to 40 years in prison. If a court allows, the US could use the 127,271 bitcoins it seized to repay victims. The value of the coins – currently around US$113,000 each – will continue to fluctuate in the meantime.

Messages seeking comment were left for Prince Holding Group spokesperson Gabriel Tan. The company’s website says it “adheres to global business standards”. A spokesperson for the Cambodian government, Pen Bona, did not immediately respond to a request for comment.