Pig Butchering Crypto Scammers Caught

The Cryptocurrency sector has seen significant growth in both artificial intelligence (AI) and blockchain technology and seeing a rapid reshaping of industries. But not all innovation has been for good. While tech giants like Amazon investing billions into AI infrastructure, cybercriminals continue to exploit the public’s growing support of digital assets, especially cryptocurrency.

The recent news of five men pleading guilty to laundering nearly USD 37 million in a transnational crypto scam shines a harsh spotlight on one of the crypto world’s most disturbing trends: the resurgence of “pig butchering” schemes.

What Is Pig Butchering?

Originally a term derived from romance based investment scams in China, “pig butchering” refers to a long term scam where fraudsters build relationships with victims fattening them up, so to speak before executing a devastating financial hit seeking money for emergencies or to visit them. In this latest case, the scam was orchestrated via centers in Cambodia and involved elaborate social engineering tactics and high tech laundering mechanisms using U.S. shell companies, international banking systems and stablecoins like Tether (USDT).

According to the U.S. Department of Justice and confirmed by multiple reports online five men Joseph Wong (California), Yicheng Zhang (China), Jose Somarriba (Los Angeles), Shengsheng He (California), and Jingliang Su (China and Turkey) pleaded guilty to laundering funds obtained from victims lured into fake crypto investment schemes.

The operation, part of a larger international crime syndicate which originated in Cambodia where the scam centers contacted U.S. citizens through dating apps, text messages and social media. Victims were persuaded to invest in fraudulent crypto platforms, often receiving fake dashboards showing their assets supposedly growing in value. But really the money was being funnelled overseas.

More than USD 36.9 million was transferred from U.S. bank accounts into a shell company account at Deltec Bank in the Bahamas, operated under the name Axis Digital Limited. The funds were then converted into USDT and sent to wallets controlled by associates in Cambodia. From there the stolen crypto made its way to crime bosses running scam centers in Sihanoukville a city notorious for harboring criminal syndicates involved in trafficking and cyber fraud.

Why Shell Companies?

While most scams prey on the unsuspecting, what sets this case apart is the scale, sophistication, and how technology enabled the crime.

Wong and Zhang operated an expansive laundering network based in Los Angeles which was registering fake companies and opening U.S. bank accounts to siphon victim funds. Zhang alone ran two laundering bank accounts. Meanwhile, Somarriba and He were responsible for setting up the Axis Digital shell company and managing the Bahamian bank account used for conversions.

Su joined later and handled the crypto side of the scam moving laundered money into Tether and coordinating wallet transfers across borders. It’s estimated that their scheme ran alongside other “pig butchering” efforts that have collectively scammed over USD 150 million from victims worldwide.

Cambodia Emerges as Pig Butchering Capital

This case also brings more attention to Cambodia’s emergence as a hotspot for cybercrime. The Justice Department recently labelled the Huione Group a Cambodia based conglomerate as an “institution of primary money laundering concern,” with deep connections to state officials and its role in facilitating billions in illicit transactions. According to the United Nations, over 100,000 people are estimated to have been coerced or tricked into working in cyber scam centers across Cambodia.

These scam centers function like digital sweatshops, where workers are often trapped in modern day slavery and forced to romance, deceive and steal from global victims under threat of violence.

A Stark Contrast: Big Tech’s AI Race
While scammers manipulate digital tools to defraud people there are legitimate companies like Amazon are investing heavily to harness AI for productive uses. Amazon recently committed USD 20 billion to build new data centers in Pennsylvania, alongside another USD 10 billion investment in North Carolina all aimed at supporting AI and cloud infrastructure. The company also plans to establish training programs in AI and cloud computing for local workers.

Some crypto mining firms are now pivoting toward AI infrastructure, converting their mining rigs to support large scale computation for machine learning models. Riot Platforms, Hive Digital and Iris Energy have already moved part of their operations in this direction.

But this AI arms race also reveals a growing tension as the crypto industry matures and overlaps with AI, both technologies remain vulnerable to exploitation by bad actors unless regulatory oversight and user education keep up.

The Human Toll and Legal Repercussions
This particular scam network has seen eight individuals plead guilty so far. Wong and Zhang face up to 20 years in prison for money laundering conspiracy, while Somarriba, He, and Su face up to five years for operating an unlicensed money services business.

The impact of these scams is not just financial. Victims are often left emotionally devastated after being conned by someone they believed to be a friend or romantic partner. Many lose their entire savings, and some never financially recover.

The FBI’s 2024 Internet Crime Report underscored the scale of the problem, noting that investment scams (many crypto-related) accounted for over $6.5 billion in losses last year — up from $4.57 billion the year before.

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