In a landmark enforcement action, U.S. federal prosecutors have seized approximately 127,271 bitcoins — valued at about $15 billion — from Prince Holding Group, accusing the organization and its chairman, Chen Zhi, of orchestrating one of the largest cryptocurrency fraud and money laundering operations in history.
What the U.S. Indictment Alleges
- The Brooklyn U.S. Attorney’s Office and the Department of Justice unsealed charges against Chen Zhi, a Cambodian national also known as „Vincent,“ for wire fraud conspiracy and money laundering conspiracy tied to operations run out of Cambodia.
- Prosecutors claim that Prince Holding ran forced-labor scam compounds across Cambodia, where trafficked individuals were coerced into executing online „investment scams“ (often called „pig butchering“ scams) under duress.
- The seized bitcoins were stored in unhosted wallets whose private keys were allegedly controlled by Chen and are now under U.S. government custody.
- The DOJ describes this seizure as the largest forfeiture action in U.S. history, both in terms of cryptocurrency and total value.
Modus Operandi: Scam + Force + Money Laundering
The scheme, as portrayed in the indictment and supporting statements, combined several illicit elements:
- Pig Butchering Scams
Victims were contacted through social media or messaging apps, groomed through false relationships or investment proposals, then persuaded to transfer cryptocurrency with promises of high returns.
Once cryptocurrency was transferred, it was immediately diverted and laundered.
- Forced Labor & Coercion
Workers were reportedly held in compounds surrounded by walls and barbed wire, forced to run “phone farms” and call centers using thousands of phones to scale up the scam operations.
Harsh conditions, threats, violence, isolation, and beatings were alleged, with internal communications referencing punishments for workers who “caused trouble.”
- Layered Money Laundering
The scam revenue was funneled through shell companies, gambling operations, crypto mining businesses, and real estate investments to disguise its criminal origin.
In a novel twist, blockchain-analysis firm Elliptic suggests the bitcoins seized may originate from a 2020 theft from a mining firm (LuBian) linked to Chen, indicating further complexity in the money trail.
International Sanctions and Coordinated Action
- Concurrent with the criminal indictment, the U.S. Treasury and United Kingdom imposed sweeping sanctions on 146 entities tied to Prince Holding, and designated the group as a Transnational Criminal Organization.
- The Treasury barred U.S. persons and institutions from transacting with these designated entities and froze their U.S.-linked assets.
Legal Consequences and Next Steps
- Chen Zhi is reportedly at large, believed to be in Cambodia or elsewhere, and has not yet been apprehended.
- If convicted, he faces a maximum prison term of 40 years under U.S. federal statutes.
- Prosecutors are seeking a forfeiture order to permanently take ownership of the seized bitcoin and any derivative assets.
Significance & Implications
- This case represents a major blow to cyber-enabled financial crime, especially operations that weaponize forced labor and scale fraudulent schemes globally.
- It underscores how cryptocurrency ecosystems can be manipulated by criminal networks to commit large-scale fraud and money laundering with global reach.
- The seizure is also a precedent-setting enforcement action, sending a warning that law enforcement is gaining technical capability and willingness to dismantle even the most opaque illicit crypto operations.
