Daren Li, a 41-year-old Chinese dual citizen, has pleaded guilty to his role in laundering an estimated $73 million in stolen funds from various cryptocurrency scams. Li was involved in the operation of a series of fraudulent schemes, including the widely known “pig butchering” scams, which ran from August 2021 to April 2024. These scams targeted victims worldwide, luring them into investing substantial amounts in fake cryptocurrency ventures, with the promise of significant returns. The stolen funds were then funneled through a sophisticated network of shell companies and U.S.-based bank accounts designed to disguise the nature, source, and ownership of the money. Li instructed his associates to open these bank accounts and transfer the victim funds to them.
Once the funds were in the U.S.-based accounts, they were quickly converted into Tether (USDT), a popular cryptocurrency stablecoin, which facilitated the global distribution of the money. Li and his co-conspirators then funneled the proceeds into digital wallets controlled by the criminal group. Court documents reveal that one of these wallets had received over $341 million in digital assets as part of the larger operation. This criminal network, operating across various international borders, made it extremely difficult for authorities to trace the stolen funds, with many transactions taking place through a web of shell companies and foreign bank accounts. The complexity of the operation, coupled with the anonymity afforded by cryptocurrencies, made detection and interception by law enforcement agencies particularly challenging.
Li’s arrest occurred in April 2024 at the Atlanta airport, and his alleged co-conspirator, Yicheng Zhang, was arrested a month later in Los Angeles. After admitting his involvement in the criminal activity, Li pleaded guilty to one count of conspiracy to commit money laundering. In his plea agreement, Li acknowledged that $73.6 million of the laundered funds were deposited directly into the bank accounts associated with the scam, while at least $59.8 million had been laundered through U.S.-based shell companies. The scale of this criminal operation underscores the growing role that cryptocurrencies play in financial crimes, with the ease of cross-border transactions and the use of stablecoins like Tether allowing criminals to rapidly move illicit funds around the globe.
Li is now facing serious legal consequences for his role in the operation. A sentencing hearing has been scheduled for March 3, 2025, where Li could face up to 20 years in prison. Additionally, he may be required to pay restitution to the victims of the scam, with the total amount potentially reaching up to $73 million. This case highlights the growing concerns surrounding the use of digital currencies in financial crimes and the challenges authorities face in tracking and prosecuting such offenses. As the use of cryptocurrencies continues to rise, law enforcement agencies are under increasing pressure to enhance their ability to investigate and disrupt these types of illegal activities.
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