The United States has uncovered a significant forced-labor and cyber-fraud network linked to Cambodia, resulting in the seizure of nearly $15 billion in Bitcoin that is now in federal custody. This development has prompted discussions on whether these funds could eventually be included in Washington’s Strategic Bitcoin Reserve.
On October 14, prosecutors filed charges against Chen Zhi, the chairman of Cambodia’s Prince Group. He is accused of operating extensive “pig-butchering” scam compounds that not only trafficked workers but also defrauded victims globally. In tandem with these charges, the Justice Department has initiated the largest forfeiture action in U.S. history, targeting approximately 127,271 BTC associated with this criminal network.
This operation was meticulously coordinated with law enforcement in the United Kingdom, where simultaneous sanctions against the Prince Group and its affiliates were announced. Officials in both countries revealed the details of the crackdown from locations in Brooklyn and Washington, D.C.
The significance of this case was highlighted by Attorney General Pamela Bondi, who labeled it “one of the most significant strikes” against human trafficking and cyber-enabled financial fraud. The FBI characterized the dismantling of this operation as one of the largest financial fraud actions ever executed. Chen Zhi’s whereabouts remain unknown.
The implications of this massive seizure have led to speculation regarding what the U.S. government might do with such a substantial accumulation of Bitcoin. Historically, the government has auctioned off smaller crypto holdings acquired through criminal cases. However, the scale of this seizure poses a new challenge that could influence the framework for a potential national Bitcoin reserve, a concept that has been quietly gaining momentum in Washington.
Prosecutors allege that the Prince Group operated under deplorable conditions, holding trafficked workers in compounds designed like prisons and coercing them into executing large-scale romance and investment scams. The Justice Department further notes that Zhi managed approximately 127,271 BTC in unhosted wallets secured through private keys he controlled. This forfeiture complaint has been designated as the largest in the history of the department, and officials have indicated that the seized funds will remain untouchable until the resolution of the case.
In a concurrent move, the U.S. Treasury labeled the Prince Group a “Transnational Criminal Organization” and imposed sanctions on 146 associated individuals and entities. The Treasury also invoked a USA PATRIOT Act §311 order, effectively blocking the Cambodia-based Huione Group from accessing the U.S. financial system. In alignment, the UK government has taken measures to freeze properties linked to the network, including a high-value mansion in London, while also sanctioning Chen and related companies.
As discussions regarding the $15 billion in Bitcoin continue, attention turns to the foundation of the Strategic Bitcoin Reserve established by an executive order from President Trump in March 2025. This directive stipulates that the government’s Bitcoin holdings should derive from forfeited criminal assets rather than taxpayer contributions. Treasury Secretary Scott Bessent reiterated this commitment, emphasizing that the department will not purchase Bitcoin but will instead rely on lawful seizures.
Prior to this recent seizure, federal agencies were estimated to possess between $15 billion and $20 billion in Bitcoin from earlier cases. If courts greenlight the latest forfeiture and complete victim restitution, the newly acquired funds may be added to the Strategic Bitcoin Reserve in accordance with existing guidelines.
Senator Cynthia Lummis, a prominent advocate for formalizing the reserve via legislation, expressed commendation for the Justice Department’s actions. She urged Congress to establish clearer regulations for managing digital assets and called for the preservation of seized Bitcoin to ensure victims are compensated while still contributing to the nation’s long-term digital asset strategy.
Despite the gravity of the situation, Bitcoin prices appeared relatively stable, trading around $112,521, as the broader cryptocurrency market remained subdued amid ongoing global economic challenges.
