Three Individuals Apprehended by FBI in Suspected $10 Million Cryptocurrency Money Laundering Plot

Three Men Charged with Laundering $10 Million in Cryptocurrency

Three men are facing federal prison time after being charged with laundering over $10 million in cryptocurrency. According to an announcement from the United States Attorney for the Southern District of New York, Zhong Shi Gao, Naifeng Xu, and Fei Jiang have been charged with the scheme.

FBI Assistant Director James Smith expressed concern about the harm these schemes cause to institutions and emphasized that the arrests should serve as a warning to anyone attempting to engage in bank fraud.

The trio was apprehended through a joint operation between the FBI’s Oklahoma City field office and the bureau’s Asian and African Organized Crime squad. Each defendant is charged with three counts, including conspiracy to commit bank and wire fraud, money laundering, and identity theft.

The alleged scheme involved enlisting foreign nationals from China and Taiwan living in the United States, opening bank accounts, creating unauthorized transactions, and then claiming those transactions were unauthorized. The funds would then be withdrawn as cash or used to purchase cryptocurrency and quickly moved to “foreign” cryptocurrency exchanges.

The U.S. Department of Justice has not yet responded to requests for comment on this case. U.S. Attorney Damian Williams warned fraudsters and cybercriminals that they will be found and held accountable for their crimes.

Regulatory Crackdown on Cryptocurrency Industry

Since the collapse of FTX and the arrest of its founder Sam Bankman-Fried last year, federal regulators have taken a stronger stance against the cryptocurrency industry. In September, a coalition of U.S. Senators supported Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act, which aims to apply traditional banking regulations to cryptocurrency companies.

Senator Warren previously stated that cryptocurrency enables rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions in stolen funds and evade sanctions.

Hot Take: Crackdown on Cryptocurrency-Related Crimes

Recent charges against individuals for laundering cryptocurrency highlight a growing crackdown on cryptocurrency-related crimes by federal authorities. These cases serve as a warning to those who think they can use cryptocurrency to hide their identities or engage in illegal activities. With increasing regulatory scrutiny and enforcement efforts, it is clear that law enforcement agencies are actively pursuing individuals involved in fraudulent schemes and illicit activities within the cryptocurrency industry.