Chinese authorities have taken custody of Chen Zhi, a businessman accused of running what U.S. officials describe as one of the largest cryptocurrency fraud and money laundering operations ever uncovered.
According to Cambodia’s Ministry of Interior, Chen, 38, was arrested on January 6 along with two associates after months of joint investigations by Cambodian and Chinese authorities. He was later deported to China under a bilateral agreement targeting transnational crime. Cambodian officials also confirmed that his citizenship was revoked in December 2025.
Chen is the founder of Prince Group, a Cambodia-based conglomerate launched in 2015 with businesses in real estate, finance, and hospitality. U.S. and U.K. authorities allege the company was actually used as a front for a massive criminal network, though Prince Group has strongly denied all accusations.
Western governments say the network was involved in “pig butchering” scams, a form of crypto fraud where scammers build long-term trust with victims before convincing them to invest on fake crypto trading platforms. Once victims deposit funds, the platforms disappear and the money is gone.
Investigators claim the operation also involved money laundering, forced labor, and human trafficking, with stolen funds routed through more than 100 shell companies, crypto exchanges, and mining operations before being consolidated into private Bitcoin wallets.
In October, U.S. federal prosecutors moved to seize more than 127,000 Bitcoin, allegedly tied to Chen’s network. At the time, the assets were worth around $15 billion, making it the largest crypto seizure ever linked to online fraud, according to court filings.
The U.S. Treasury and the U.K. government have officially designated Prince Group as a transnational criminal organization, imposing sanctions on dozens of crypto wallets holding hundreds of millions of dollars in Bitcoin.
Under Chinese law, citizens can be prosecuted for serious crimes committed abroad, especially those involving fraud, money laundering, and human trafficking. While no formal charges have been announced yet, legal experts say penalties in similar cases have ranged from life imprisonment to capital punishment, depending on the severity of the crimes.
Authorities are expected to pursue asset forfeiture, and China may coordinate with foreign governments to determine how seized crypto assets could be used, potentially including compensation for victims.
The arrest comes as part of a wider international crackdown on crypto-enabled fraud networks operating across Southeast Asia. Over the past year, law enforcement agencies have worked with major crypto companies like Tether, Binance, and Coinbase, along with blockchain analytics firms, to trace and freeze illicit funds.
U.S. data shows reported losses from pig-butchering scams reached $3.6 billion in 2024, highlighting just how large and dangerous these operations have become.
This case signals a growing global push to hold major players in crypto fraud networks accountable—and to recover stolen funds at an unprecedented scale.
