Chinese National Extradited to US Over $36.9M Crypto Scam

A 44-year-old Chinese national, Zheng Zhao, has been extradited from the Netherlands to the United States to face charges for his alleged involvement in a massive international cryptocurrency investment scheme. According to an announcement from the U.S. Department of Justice (DOJ), Zhao made his initial court appearance on October 23, 2026, in Los Angeles. The fraudulent operation, which targeted at least 174 identified U.S. citizens, is estimated to have laundered more than US$36.9 million through a complex network of shell companies and digital asset wallets.

Mechanism of the Cambodia-Based Investment Fraud

The investigation revealed that the scam was orchestrated from specialized "scam centers" located in Cambodia. The perpetrators employed a technique often referred to as "pig butchering," where they built long-term trust with victims through social media, dating apps, and unsolicited text messages. Once a relationship was established, the scammers induced victims to invest in what appeared to be lucrative cryptocurrency opportunities.

• Victims were directed to fraudulent websites that mimicked legitimate trading platforms.
• The platforms displayed fabricated gains to encourage larger and more frequent deposits.
• Funds were initially sent to U.S.-based shell company bank accounts to avoid immediate detection.
• The illicit proceeds were subsequently moved to an account at Deltec Bank in the Bahamas.

Laundering via Stablecoins and Global Extradition

Court documents allege that once the funds reached the Bahamas, Zhao and his co-conspirators arranged for the conversion of the fiat currency into the stablecoin Tether (USDT). These digital assets were then transferred to a cryptocurrency wallet controlled by the Cambodia-based syndicate, effectively moving the money beyond the immediate reach of traditional financial regulators.

This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas. We will pursue charged defendants anywhere in the world, especially those who are alleged to have stolen money, converted it to cryptocurrency, and used foreign financial institutions in the process.

The U.S. Secret Service’s Global Investigative Operations Center and Homeland Security Investigations played key roles in tracking the digital trail. The Department of Justice's Office of International Affairs worked closely with Dutch authorities to secure Zhao's arrest and subsequent transfer to U.S. custody.

Following his initial appearance in the U.S. District Court in downtown Los Angeles, a judge ordered Zhao to remain in custody without bond. His formal arraignment has been scheduled for November 30, 2026. If convicted of conspiracy to commit money laundering and related charges, the defendant faces a significant federal prison sentence. This case marks another milestone in the Cyber-Enabled Scam Initiative (CSI), a dedicated DOJ effort to dismantle transnational criminal networks that utilize blockchain technology to facilitate financial fraud.