Cambodian Tycoon Charged in $14 Billion Bitcoin Fraud Case

The U.S. government has taken decisive action against Cambodian tycoon Chen Zhi, charging him in a staggering $14 billion Bitcoin fraud case. This extensive cryptocurrency scam allegedly involved the exploitation of forced labor to deceive potential investors.

Charges and Legal Actions

Federal prosecutors in Brooklyn have unsealed an indictment accusing Chen Zhi, chairman of Prince Holding Group, of wire fraud conspiracy and money laundering conspiracy. Alongside the charges, U.S. and British authorities have imposed sanctions on his company, branding it a transnational criminal organization.

Details of the Fraud

Chen, 38, allegedly orchestrated a massive cyberfraud operation, often referred to as a “pig butchering” scheme. At its height, this scam was reportedly generating approximately $30 million daily. Assistant Attorney General John Eisenberg labeled Chen as the mastermind of this sprawling fraud empire.

• The scheme targeted American investors, leading to losses exceeding $10 billion in 2022 due to Southeast Asia-based scams.
• Chen’s operations included online gambling and cryptocurrency mining, used to launder illicit gains.
• If convicted, Chen faces up to 40 years in prison.

Sanctions and Investigations

In conjunction with the indictment, U.S. authorities have seized 127,271 Bitcoins, valued around $113,000 each. These assets may be used to compensate victims, pending court approval. Chen remains evading capture, and significant inquiries into his businesses have been ongoing since at least 2020 in China.

Forced Labor Allegations

Chen’s conglomerate reportedly established numerous compounds in Cambodia, where workers, often migrants, were forced to contact potential scam victims via online platforms. These workers lived in conditions likened to forced labor camps, with reports of violence against them.

• Victims were drawn in with false promises of high-paying jobs.
• Reports detailed horrific treatment, including beatings and physical restraints.

The Broader Context

Last year, approximately 100,000 individuals were estimated to be engaged in forced online scams in Cambodia, with significant numbers in neighboring Southeast Asian nations. Experts argue that while the current actions against Chen and his company won’t eradicate the scam economy, they may hinder its operations.

Jacob Daniel Sims, a transnational crime expert, emphasized that these legal moves fundamentally challenge the prevailing risk for global financial institutions interacting with politically connected Cambodian elites.

As the situation develops, the focus remains on dismantling the networks that facilitate such extensive fraud operations, underscoring a growing international concern regarding cybercrime and human exploitation. The actions taken by U.S. and British authorities represent a critical step in addressing these serious allegations against Chen Zhi and the Prince Holding Group.