According to Golden Finance, the Attorney’s Office for the Central District of California disclosed on Monday that five men have admitted to participating in an international cryptocurrency fraud scheme involving a total amount of 36.9 million US dollars, with the victims directly targeting the American public. This fraud eventually transferred the illegally obtained funds to the cryptocurrency fraud center in Cambodia. Its modus operandi and cross-border money laundering chain have drawn high attention from the regulatory authorities.
Investigations show that criminal gangs set up shell companies and opened US bank accounts to establish a network for receiving funds. They quickly converted the defrauded US dollars into stablecoin Tether and then transferred them to cryptocurrency wallets under their control in Cambodia, completing the process of fund laundering and transfer. This criminal model that exploits the anonymity and cross-border nature of virtual currencies has become a typical feature of crypto fraud cases in recent years – traditional financial accounts serve as the entry point for funds, while cryptocurrencies act as “whitewashing” tools, making tracking and interception extremely difficult.
It is alarming that this case is regarded as an important achievement of the US government in combating Asian crypto fraud and money laundering networks. The prosecution specifically mentioned that the criminal gang has potential connections with the Lazarus group, which is supported by the North Korean state. The Lazarus Group has long been active in the global crypto crime field. It has stolen crypto assets through hacking attacks, phishing frauds and other means, with the involved amount reaching hundreds of millions of US dollars. The resolution of this case may be a crucial juncture for US law enforcement agencies to launch a systematic crackdown on transnational crypto criminal organizations.
“The decentralized nature of cryptocurrencies is being maliciously exploited by criminals,” the US prosecutor emphasized in a statement, “but this by no means implies a regulatory vacuum.” With the crypto market size exceeding 2.5 trillion US dollars, the frequent occurrence of such fraud cases has prompted global regulatory agencies to accelerate collaboration. The US Treasury Department has recently introduced a regulatory framework for stablecoins, and the European Union is also promoting the implementation of the Crypto Asset Markets Regulation (MiCA), aiming to sever the connection between illegal funds and crypto platforms.
Industry insiders point out that the exposure of such cases will further promote the compliance process of the crypto industry. Crypto exchanges and wallet service providers may face stricter KYC (Real-Name Authentication) and AML (anti-money Laundering) reviews, while cross-chain tracking technology will also usher in new development opportunities. As blockchain analysis companies continue to improve their capabilities in address traceability and fund flow tracking, the “anonymous coat” of crypto crimes is gradually being stripped away.
At present, the five people involved in the case have reached a plea agreement. The subsequent sentencing will be determined based on their degree of participation and the scale of their funds. The resolution of this cross-border crypto fraud case not only brings hope to the victims to recover their losses, but also sends a strong signal to global crypto criminal gangs: under the dual siege of regulation and technology, the survival space of crypto fraud is being continuously compressed.
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