Another Chinese money laundering scheme tied to Deltec and Tether
Daren Li and Yicheng Zhang, two Chinese nationals, have been charged with utilizing tether and crypto-friendly bank Deltec to commit money laundering and wire fraud amounting to $73 million, according to an announcement on Friday by the Department of Justice (DoJ).
According to an affidavit, the pair, who were arrested in Los Angeles and Atlanta in April, worked with pig butchering and scam operations to move assets through “money couriers, financial transactions with no legitimate commercial purpose, and shell accounts.”
Specifically, Li and Zhang used a shell company called CMD Export and Import to transfer cash to crypto-friendly Bahamas-based Deltec Bank and Trust. It was then converted to USDT before being sent to Binance.US or Binance and distributed to money mules as necessary.
Li and Zhang gained citizenship of St. Kitts and Nevis (a small Caribbean Island that partially relies on citizenship by investment for its GDP). As verified by previous Protos reporting, crypto billionaire Justin Sun has St. Kitts and Nevis citizenship that he uses to incorporate in Hong Kong.
Read more: Executive texts claim Deltec moved customer funds from FTX to Alameda
While it’s stated in the DoJ press release that a wallet involved had received $341 million in virtual assets, it’s unclear if that’s an exchange hot wallet, a mixing service, or a wallet for the scam itself.
While many of the addresses associated with the scam have been seized or otherwise frozen, many remain active and operational. Protos will update this article if anything else is divulged.
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