U.S. seizes $15b Bitcoin in forced-labor crypto scam case

U.S. federal agents have seized a historic $15 billion in Bitcoin, allegedly the proceeds of a Cambodian criminal network that forced trafficked individuals to run sophisticated cryptocurrency “pig butchering” scams on a global scale.

On Oct. 14, the U.S. Department of Justice announced the largest forfeiture action in its history, seizing approximately 127,271 Bitcoin (BTC), valued at roughly $15 billion, from unhosted wallets linked to UK and Cambodian national Chen Zhi.

Federal prosecutors unsealed an indictment in Brooklyn, charging the Prince Group chairman with masterminding a transnational criminal enterprise that operated forced-labor compounds in Cambodia.

The DOJ alleges these compounds were the engine for industrial-scale “pig butchering” scams that defrauded global victims, with a single Brooklyn-based cell moving millions from more than 250 people stateside. Chen Zhi remains at large.

Inside the Prince Group empire

According to the unsealed indictment, Chen Zhi founded the Prince Group around 2015, cultivating a public image as the chairman of a legitimate multinational conglomerate. The group’s portfolio ostensibly included real estate development, financial services, and consumer services, with operations spanning more than 30 countries.

Federal prosecutors allege this extensive corporate network was little more than a sophisticated front. Behind the veneer of legitimate business, Zhi and his top executives are accused of transforming the organization into one of Asia’s most formidable transnational criminal enterprises, using its global reach to orchestrate a brutal fraud operation.

The secret criminal operations were allegedly directed from the top. Court documents state Zhi was personally involved in managing the scam compounds, maintaining meticulous records that tracked profits and specific fraudulent schemes run out of individual rooms.

He is also accused of overseeing “phone farms,” automated call centers within the compounds that utilized thousands of phones and millions of phone numbers to target victims globally. The indictment further claims Zhi communicated directly with subordinates about using violence against trafficked workers, instructing them to beat individuals who “caused trouble” but cautioning that they should not be “beaten to death.”

Prosecutors allege that individuals, held against their will in compounds described as prison-like camps surrounded by high walls and barbed wire, were forced to contact potential victims through messaging and social media apps. Posing as trustworthy contacts, they built relationships over time before steering conversations to fraudulent cryptocurrency investments.

Victims were then persuaded to transfer crypto to specified accounts with promises of high returns, only to have their funds stolen and laundered for the benefit of the syndicate. This “pig butchering” process, fueled by forced labor, generated billions in illicit profits.

Laundering the empire’s digital profits

To obscure the massive flow of illicit funds, Prince Group associates, at Zhi’s direction, employed advanced cryptocurrency laundering techniques. Prosecutors detail the use of “spraying” and “funneling,” a process where large volumes of cryptocurrency were repeatedly broken down across scores of wallets and then re-consolidated to break the audit trail.

A portion of the criminal proceeds were eventually held in wallets at various cryptocurrency exchanges or converted to traditional fiat currency. The core of the seized assets, however, comprising 127,271 Bitcoin, was held in unhosted wallets, with Zhi personally controlling the private keys.

Zhi and his associates allegedly used the illicit gains to fund a lifestyle of staggering opulence, with extravagant purchases including watches, yachts, private jets, and vacation homes.

Notably, Zhi is accused of using stolen funds to acquire a Picasso painting through a New York City auction house, embedding the proceeds of human suffering within the world’s most exclusive luxury markets.