Following the seizure of $9 million in cryptocurrencies related to an Asian pig butchering scheme, Reuters published a special report that highlights the alarming growth of ‘pig butchering’ scams, fraudulent investment schemes primarily operated from Asia and now recognized as a global billion-dollar industry. These scams use cryptocurrencies to process their illegal payments. Binance in particular is said to have been involved as a payment processor in recent years.
U.S. Law Enforcement Actions
On Nov 21, 2023, the U.S. Justice Department announced the seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U.S. dollar. These seized funds were traced to cryptocurrency addresses allegedly associated with an organization that exploited over 70 victims through romance scams and cryptocurrency confidence scams, which are widely known as “pig butchering.”
In April, the U.S. Department of Justice said it seized about $112 million worth of crypto linked to pig-butchering scams, without identifying suspects. A warrant that resulted in the seizure of more than half that amount specified a Binance account registered in Thailand.
The Reuter Report’s Key Findings:
The pig butchering scheme investigated by Reuters has been linked to an Binance account registered to Wang Yicheng, a Chinese businessman with connections to Thailand’s elite.
- Vast Sums of Money Involved: Reuters traced over $90 million flowing into a cryptocurrency account registered under Wang Yicheng’s name between January 2021 and November 2022. Notably, at least $9.1 million of this sum is directly linked to pig-butchering scams.
- Victims’ Devastating Losses: Among the victims is a 71-year-old Californian who lost approximately $2.7 million, his life savings, to one such scam. These schemes typically engage individuals online, build trust, and then lure them into fraudulent crypto investments.
- Wang Yicheng’s Influence and Connections: Wang, vice president of the Thai-Asia Economic Exchange Trade Association, has established relationships with Thailand’s law enforcement and political figures. However, his exact role in the scam remains unclear.
- Global Impact and Law Enforcement Attention: Pig-butchering scams have attracted global scrutiny, with U.S. law enforcement agencies like the FBI and Secret Service showing interest. The U.S. Department of Justice has already seized about $112 million linked to such scams.
- Operational Complexity: These scams, which originated in China, often involve labor trafficking and are operated by criminal syndicates from Southeast Asia. Funds are typically moved through complex networks involving multiple wallets to obfuscate the money trail.
- Involvement of Major Crypto Platforms: The account linked to Wang was held at Binance, the world’s largest crypto exchange. The exchange, however, has not commented on individual users or the findings.
Read the full Reuters report here.
The Human Cost:
This investigation into the pig-butchering scams sheds light on the devastating impact on victims, many of whom have lost over $1 million, with some cases leading to tragic outcomes like suicide. The intricate web of these scams, involving high-profile connections and complex financial movements, underscores the sophisticated nature of modern financial crimes.
The Binance CEO Changpeng Zhao (CZ) stepped down and pleaded guilty to breaking U.S. anti-money laundering laws on Tuesday, as part of a $4.3 billion settlement with U.S. authorities. Over five years, Binance processed transactions by users who “laundered proceeds” of criminal activity including scams, U.S. authorities said.
A Call for Vigilance
FinTelegram, through this summary of the Reuters report, emphasizes the need for increased vigilance and global cooperation in combating such sophisticated and destructive financial crimes. The pig-butchering scam serves as a stark reminder of the dark side of the crypto world and the importance of protecting potential victims from these predatory schemes.
