Key Takeaways
- • Zhen Zhao, a 44-year-old Chinese national, was arraigned in California after extradition from the Netherlands over an alleged cryptocurrency investment scam that prosecutors say stole nearly $37 million from 174 U.S. victims.
- • Victims transferred over $36.9 million from U.S. bank accounts to an account at Deltec Bank in the Bahamas, opened under the name Axis Digital Limited, with funds converted to Tether (USDT).
- • Zhao was charged in August 2025 with conspiracy to commit money laundering and faces a maximum sentence of 20 years in prison if convicted.
- • Eight accomplices have already pleaded guilty, and two have been sentenced to 51 and 46 months in prison.
- • According to the FBI's 2025 Internet Crime Report, investment scams caused over $8.6 billion in losses last year across 72,984 complaints, up from $6.5 billion in 2024.
Summary
A Chinese national, Zhen Zhao, 44, was arraigned in California after being extradited from the Netherlands in connection with a cryptocurrency investment scam that prosecutors say stole nearly $37 million from 174 victims in the United States, according to the Department of Justice as reported by BleepingComputer.
The scheme belongs to the category of so-called pig butchering or romance baiting fraud, in which criminals contact targets through social media, dating sites, messaging apps, unsolicited texts and phone calls, build trust, and then steer them into fake digital asset investments. Prosecutors allege Zhao acted with accomplices in the United States and Cambodia. Victims sent funds through fake websites designed to resemble legitimate cryptocurrency trading platforms, and the money was not invested as promised. Per the DOJ, Zhao and co-conspirators arranged for Deltec Bank to convert victim funds into Tether (USDT) and transfer them to a digital asset wallet controlled in Cambodia, from which USDT was allegedly passed to leaders of scam centers across the region.
Victims transferred more than $36.9 million from U.S. bank accounts to an account at Deltec Bank in the Bahamas opened under the name Axis Digital Limited. Zhao was charged in August 2025 with conspiracy to commit money laundering and faces a maximum of 20 years in prison if convicted. Eight co-conspirators have already pleaded guilty, and two have been sentenced to 51 months and 46 months in prison.
The case comes against the backdrop of rising investment fraud losses. The FBI's 2025 Internet Crime Report, as cited in the coverage, puts investment scam losses at over $8.6 billion for the year, based on 72,984 complaints, up from $6.5 billion in 2024.
The scheme belongs to the category of so-called pig butchering or romance baiting fraud, in which criminals contact targets through social media, dating sites, messaging apps, unsolicited texts and phone calls, build trust, and then steer them into fake digital asset investments. Prosecutors allege Zhao acted with accomplices in the United States and Cambodia. Victims sent funds through fake websites designed to resemble legitimate cryptocurrency trading platforms, and the money was not invested as promised. Per the DOJ, Zhao and co-conspirators arranged for Deltec Bank to convert victim funds into Tether (USDT) and transfer them to a digital asset wallet controlled in Cambodia, from which USDT was allegedly passed to leaders of scam centers across the region.
Victims transferred more than $36.9 million from U.S. bank accounts to an account at Deltec Bank in the Bahamas opened under the name Axis Digital Limited. Zhao was charged in August 2025 with conspiracy to commit money laundering and faces a maximum of 20 years in prison if convicted. Eight co-conspirators have already pleaded guilty, and two have been sentenced to 51 months and 46 months in prison.
The case comes against the backdrop of rising investment fraud losses. The FBI's 2025 Internet Crime Report, as cited in the coverage, puts investment scam losses at over $8.6 billion for the year, based on 72,984 complaints, up from $6.5 billion in 2024.
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