The US Department of Justice has made headlines with the announcement of a monumental seizure involving bitcoin, charging an individual named Chen Zhi in the Eastern District of New York. The department revealed that it had seized a staggering 127,271 bitcoins, valued at approximately $15 billion, marking the largest forfeiture action in its history.
The charges against Zhi include serious offenses such as money laundering and wire fraud, which are connected to a notorious scheme known as “pig butchering.” This particular scam, which has gained notoriety globally, reportedly originated in Cambodia and involved individuals being held against their will in compounds. These victims were coerced into participating in fraudulent cryptocurrency investment schemes that extorted billions from individuals both in the United States and abroad.
The Department of Justice detailed that Chen Zhi has not yet been apprehended. It further disclosed that Zhi was in possession of the seized bitcoin in unhosted crypto wallets, where he maintained personal control over the private keys. Allegedly, Zhi and his associates diverted funds from these operations towards lavish lifestyles, indulging in luxury travel, entertainment, and extravagant purchases, which included luxury watches, yachts, private jets, vacation homes, and high-value collectibles. Notably, it was reported that a Picasso painting was acquired through a New York City auction house.
“Pig butchering” scams are characterized by a methodical approach where perpetrators build trust with victims, eventually persuading them to part with cash or cryptocurrency before vanishing with their funds. A recent study indicated that such scams have generated around $75 billion for criminals in the past year.
The Department described Zhi as the mastermind of an extensive cyber fraud network operating under the banner of the “Prince Group,” a criminal enterprise reportedly rooted in human suffering. Workers trafficked into these operations endured confinement in prison-like conditions, forced to execute online scams at scale.
The announcement also highlights a troubling trend in the rise of cryptocurrency crime, which has intensified in tandem with the booming market. The proliferation of AI technologies has equipped scammers with powerful tools to enhance their operations. A study from Chainalysis revealed that the use of AI has driven revenues from crypto-related scams to unprecedented levels, with many criminals leveraging these advances to create fake identities and circumvent verification processes.
