Chinese National Admits Laundering Crypto Through US Firms

A Chinese national has entered a plea of guilty to laundering $73 million through numerous shell companies in the United States, which were associated with cryptocurrency schemes

As per a Nov. 12 announcement from the Department of Justice, Daren Li, a dual citizen of China and St. Kitts and Nevis, has entered a plea of guilty to conspiracy to commit money laundering.

He has acknowledged his involvement in the laundering of $73 million that was amassed from investment scams, including pig butchering crypto schemes.

Li and his accomplice “knowingly” conducted transactions using funds that “represented proceeds of wire fraud” between August 2021 and April 2024, according to a plea agreement submitted to the California federal court.

Li acknowledged that he had directed his associates to establish numerous U.S. bank accounts under fictitious shell companies.

Li and his associate, Yicheng Zhang, another Chinese national who resides in California, supervised all transactions in which victims’ funds were transmitted to these accounts.

Li transferred the funds into accounts under his control once they were secured. He subsequently converted the funds into cryptocurrencies such as Tether, which were subsequently disseminated across a variety of wallets that he and his accomplices managed.

The accused admitted to laundering $73.6 million, of which $59.8 million was directed through U.S. shell companies. The remaining amount was directly deposited into bank accounts associated with the scheme.

The Department of Justice initially filed charges against Li and Zhang in May. The regulator discovered that Deltec Bank in The Bahamas had established numerous international accounts that were related to the matter at the time.

In the interim, it was discovered that a crypto wallet associated with the case had received more than $341 million in cryptocurrencies.

Although both Li and Zhang were apprehended in the United States, only Li has entered a plea of guilty and is currently awaiting his sentencing on March 3, 2025.

According to the plea agreement, Li is subject to a maximum sentence of 20 years in prison, three years of supervised release, and a fine of either $500,000 or “twice the gross gain or gross loss resulting from the offense.” Additionally, he may be required to provide victims with full restitution.

Between January 2020 and February 2024, pig butchering schemes have defrauded victims worldwide of more than $75 billion.

The swindlers typically initiate these schemes by establishing trust with their victims and subsequently persuading them to invest substantial amounts in dubious opportunities, frequently involving cryptocurrencies.

According to an FBI report, in 2023, the most vulnerable demographic was individuals over the age of 60, who reported the maximum number of complaints and collective losses exceeding $1.6 billion.