$36.9 million crypto scam: Chinese national extradited to US over alleged money-laundering role

An international fraud network operating from Cambodia used fake investment platforms, social media, and dating services to steal millions from American victims before laundering the money through banks and cryptocurrency wallets, US prosecutors allege.

A Chinese national accused of helping launder millions of dollars stolen from American cryptocurrency investors has been extradited from the Netherlands to face charges in the United States.

Zheng Zhao, 44, appeared in federal court in California on Oct. 23 following his extradition, according to the US Department of Justice (DOJ).

Prosecutors allege Zhao participated in an international criminal operation linked to scam centers in Cambodia that lured Americans with fraudulent cryptocurrency investments.

Investigators have identified 174 US victims, and more than $36.9 million in stolen funds was traced through a bank account in the Bahamas before being converted into cryptocurrency and transferred to Cambodia.

Key points

• Chinese national Zheng Zhao, 44, has been extradited from the Netherlands to face money-laundering conspiracy charges in the US
• The alleged fraud network, which operated through scam centers in Cambodia, targeted at least 174 Americans
• Scammers used social media, dating platforms, phone calls, and text messages to promote fraudulent cryptocurrency investments
• More than $36.9 million in victims’ funds was routed through a Bahamian bank and converted into Tether (USDT)
• Eight co-conspirators have already pleaded guilty, and Zhao faces up to 20 years in prison if convicted

Fake investments, real losses

The operation began with seemingly ordinary online interactions, according to the Justice Department’s announcement.

Scammers contacted their marks through unsolicited social media messages, phone calls, text messages, and online dating services.

Their objective was to build trust before introducing what appeared to be lucrative cryptocurrency investment opportunities.

Victims were directed to fraudulent websites made to look like legitimate cryptocurrency trading platforms. Once they deposited money, the websites displayed fabricated investment gains, giving the impression that their portfolios were growing.

In reality, prosecutors say, the scammers had already stolen the money.

The technique is a characteristic of a type of investment fraud commonly known as pig butchering—criminals cultivate relationships with victims over time before persuading them to invest increasing sums in fraudulent schemes.

Unlike conventional phishing attacks that rely on a sense of urgency, these scams can unfold over weeks or months, with criminals exploiting trust and the prospect of financial gain.

How $36.9 million was moved from the US to Cambodia

The operation didn't end when victims transferred their money.

Prosecutors say the criminal network used an elaborate financial infrastructure to move the stolen funds across international borders and disguise their origins.

More than $36.9 million was transferred from US bank accounts controlled by the conspirators to a single account at Deltec Bank in the Bahamas.

Zhao and other alleged conspirators then arranged for the bank to convert the funds into Tether (USDT), a stablecoin with a value pegged to the US dollar.

The cryptocurrency was then transferred to a digital wallet controlled in Cambodia, where other members of the network distributed the funds to scam center leaders throughout the region.

The process illustrates how traditional banking channels and cryptocurrency infrastructure can be combined to move proceeds from online fraud across jurisdictions.

Importantly, the use of cryptocurrency did not make the transactions invisible. Investigators were able to trace the financial flows to track down suspects.

Eight co-conspirators have already pleaded guilty

Zhao was charged in August 2025 with conspiracy to commit money laundering. If convicted, he faces a maximum sentence of 20 years in federal prison.

His extradition marks another development in a case that has already resulted in multiple guilty pleas.

Eight co-conspirators have pleaded guilty so far, including ShengSheng He and Jingliang Su, who admitted to conspiring to operate an unlicensed money-transmitting business.

He received a 51-month prison sentence, while Su was sentenced to 46 months. In January 2026, a federal court also ordered Su to pay $26.9 million in restitution.

The investigation involves the US Secret Service and several federal agencies, with Dutch authorities assisting in Zhao's arrest and extradition.

The case is also part of the Justice Department's Cyber-Enabled Scam Initiative, which focuses on identifying fraud networks, dismantling their infrastructure, and pursuing individuals involved in international cyber-enabled financial crimes.

Zhao remains presumed innocent unless proven guilty in court.

How to spot a fake cryptocurrency investment scam

These operations rarely start with an obvious demand for money. Instead, scammers often invest considerable time establishing relationships and creating the appearance of legitimate investment opportunities.

Warning signs include:

• Unsolicited investment advice: Someone you've recently met online introduces you to a cryptocurrency platform or claims to have insider knowledge of profitable investments
• Unrealistic returns: An investment website consistently displays impressive gains, regardless of market conditions
• Pressure to invest more: Your contact encourages larger deposits, often suggesting that you're missing a limited-time opportunity
• Unfamiliar trading platforms: You're directed to a website or app that has little independent information, no verifiable regulatory credentials, or suspiciously positive reviews
• Withdrawal problems: The platform demands additional payments, taxes, or verification fees before releasing your money

Consumers should independently research investment platforms, verify their regulatory status, and avoid following investment advice from strangers on social media or dating apps.

Never assume a website is legitimate simply because it looks professional or displays convincing trading activity. Fake investment dashboards can show fabricated balances and profits.

If you suspect you've been targeted, stop sending money, preserve conversations and transaction records, and contact your bank or cryptocurrency exchange immediately.

US victims can report cryptocurrency investment fraud to the FBI's Internet Crime Complaint Center at IC3.gov.

Be especially cautious of anyone offering to recover stolen cryptocurrency for an upfront fee. Victims of fraud are often targeted again by criminals posing as recovery specialists.

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