Did the US government hack a scam network for $15B in bitcoin?
The US has issued 146 sanctions against the Cambodian corporate conglomerate “Prince Group,” and has requested the forfeiture of $15 billion worth of bitcoin (BTC) linked to its alleged “secret” criminal network.
The Treasury announced that enforcement action, developed in conjunction with the UK, is aimed at hindering scam organizations that target victims across the globe.
The 146 targets, including the alleged leader of the Prince Group enterprise, Chen Zhi, and countless shell companies and business associates, were sanctioned by the Treasury’s Office of Foreign Asset Control.
The US also asked the courts to release 127,271 BTC that is currently under the government’s custody. It claims this “staggering sum” made up Chen Zhi’s laundered proceeds.
Interestingly, crypto sleuth ZachXBT notes that the wallet addresses listed in the forfeiture request were flagged as having at-risk private keys in the “Milk Sad” report of crypto wallet vulnerabilities.
He goes as far as to suggest that the US government, or someone on behalf of the US government, was able to hack the crypto wallets and take custody of the BTC.
Prince Group allegedly bribed its way out of raids
Chen Zhi allegedly operated his crypto scam enterprise by building and operating at least 10 forced labour camps in Cambodia.
These compounds hold trafficked victims hostage and force them to scam victims out of crypto online. They are prevalent in Southeast Asia in countries such as Cambodia and Myanmar.
To keep them safe from raids, Prince Group members allegedly bribed politicians with million-dollar yachts and received tip-offs from enforcement authorities.
In one instance, an official from the Chinese Ministry of Public Security allegedly offered to help get Prince Group associates “off the hook.”
Read more: Starlink a lifeline for Myanmar scam compounds, report
One Chinese law enforcement official was allegedly told to extort local businesses while promoting Prince Group as a means of protection. In these same dealings, the Prince Group associate claims that scam compound raids never actually affected “us.”
Compounds have also been skirting efforts to cut off their internet connection by utilizing Elon Musk’s Starlink satellites, which have been spotted being built at a rapid pace across scam centers.
Prince Group allegedly laundered funds with BTC mining
Profits were then allegedly laundered via shell companies, mirror sites, and “laundering houses” that turned illicitly obtained BTC and USDT into fiat currency.
Large-scale crypto mining operations, such as Warp Data and Lubian were also used to launder profits. Libian was at one point “the sixth largest BTC mining operation in the world.”
As part of today’s sanctions, the US also severed the “Huione Group” from the US financial system. It claims the group helped launder illicit proceeds totalling $4 billion between 2021 and 2024.
Collectively, the US estimates its citizens have lost $16.6 billion to these scam enterprises over the past few years.
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