A Chinese national extradited from the Netherlands has been arrested in California over his alleged role in a cryptocurrency investment scam that prosecutors say stole approximately $37 million from 174 victims in the United States.
Fake cryptocurrency investment platform targeted victims
The fraud scheme, commonly known as pig slaughtering or romance baiting, involved contacting targets through social media, dating sites, messaging apps, phone calls and unsolicited text messages. The criminals built relationships and trust before directing victims to a fraudulent investment platform.
Prosecutors allege that 44-year-old Zhen Zhao worked with accomplices in the United States and Cambodia to persuade victims to transfer large sums of money for supposed digital-asset investments. The organization falsely claimed that the victims’ investments were increasing in value, although the funds had actually been stolen.
According to the U.S. Department of Justice, the co-conspirators created a fake website that resembled a legitimate cryptocurrency trading platform. They used the site to convince victims to transfer funds for investment.
“The co-conspirators created a fake website that resembled a genuine cryptocurrency trading platform and convinced victims to transfer funds for investment through the fake website,” the Department of Justice said.
The Justice Department said Zhao and other alleged co-conspirators arranged for Deltec Bank to convert the victims’ funds into the stablecoin Tether (USDT). The converted funds were then transferred to digital-asset wallets controlled in Cambodia, where Cambodian accomplices allegedly sent the USDT to leaders of fraud centers across the region.
Victims transferred more than $36.9 million from their U.S. bank accounts to a Deltec Bank account in the Bahamas. The account was opened under the name Axis Digital Limited.
Zhao faces up to 20 years in prison
Zhao was indicted in August 2025 on a charge of conspiracy to commit money laundering. If convicted, he could receive a sentence of up to 20 years in prison.
Eight other members of the alleged international criminal organization have already pleaded guilty. Two have been sentenced to prison terms of 51 months and 46 months.
Investment fraud losses continue to rise
According to the FBI’s 2025 Internet Crime Report, investment fraudsters stole more than $8.6 billion, based on 72,984 complaints. That figure was up from $6.5 billion in 2024.
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Source: www.bleepingcomputer.com