Details of the Fraud Operation
US judicial authorities announced the appearance of Chinese citizen Chen Chao, 44 years old, before a court in California following his extradition from the Netherlands. Chao faces charges related to involvement in an international criminal network that carried out cryptocurrency investment scams, technically known as the "Pig Butchering" method or luring victims through fake dating.
According to the indictment, the network to which Chao belongs contacted victims via messaging applications, social media platforms, and dating websites to build trusting relationships before convincing them to invest their money in fake cryptocurrency trading platforms. The network managed to steal nearly $37 million from 174 victims inside the United States.
Digital Money Laundering Mechanism
Investigations revealed that the accused used websites designed to mimic real trading platforms to deceive victims. Once funds were transferred from US bank accounts to a bank account in the Bahamas under the name "Axis Digital Limited," those funds were converted into the stablecoin "Tether" (USDT), then transferred to digital wallets controlled by the network in Cambodia, and from there to regional fraud centers.
Why This News Matters
This development highlights the escalation of financial cybercrimes exploiting digital assets. According to the FBI Internet Crime Report for 2025, investment fraud losses rose to exceed $8.6 billion, compared to $6.5 billion the previous year, reflecting a shift in criminals' methods toward exploiting digital trust and cryptocurrencies.
Chao faces charges of conspiracy to launder money, and if convicted, he could face a prison sentence of up to 20 years. It is worth noting that eight of his accomplices have already pleaded guilty, and prison sentences ranging between 46 and 51 months have been handed down against two of them.