Suspect extradited to US over $36.9m crypto scam with 174 victims

What happened

A 44-year-old Chinese national has been extradited from the Netherlands to Los Angeles to answer a money-laundering conspiracy charge connected to an alleged cryptocurrency investment scheme that prosecutors say reached 174 identified American victims and moved more than $36.9 million through an offshore bank account. The U.S. Department of Justice announced the transfer on Oct. 23, saying Zheng Zhao had appeared in federal court after his extradition.

The Los Angeles U.S. Attorney's Office said Zhao was ordered detained and is due to be arraigned on Nov. 30. The charge against him was filed in August 2025 and carries a maximum penalty of 20 years in federal prison if he is convicted. He is presumed innocent.

According to the department's account of court documents, participants based overseas approached Americans through unsolicited social media messages, phone calls, text messages and dating services. After building trust, they pitched purported digital asset investments and pointed victims to websites built to look like legitimate cryptocurrency trading platforms. Those sites showed apparent investment gains even though the money had already been taken, prosecutors allege.

Victim funds were allegedly routed through U.S. shell companies, foreign bank accounts and digital asset wallets. More than $36.9 million moved from U.S. accounts controlled by participants into a single account at Deltec Bank in the Bahamas, according to the announcement. Prosecutors say Zhao and others arranged for the bank to convert the money into Tether's USDT and send it to a wallet controlled in Cambodia, from which the tokens were distributed to leaders of scam centers across the region.

Why it matters

The case illustrates how alleged investment fraud is assembled from separate pieces: front-end websites that mimic trading venues, layered bank and corporate accounts, and stablecoin transfers that can cross borders in minutes. It also shows the role of international cooperation in such prosecutions. Dutch authorities worked with the Justice Department's Office of International Affairs to secure Zhao's arrest and transfer, and the Secret Service's Global Investigative Operations Center is leading the investigation, with assistance from Homeland Security Investigations, Customs and Border Protection, the State Department's Diplomatic Security Service and the U.S. Marshals Service. Assistant Attorney General A. Tysen Duva of the Criminal Division said the extradition "should be a lesson to all those who seek to exploit vulnerable Americans from overseas." The matter is part of the division's Cyber-Enabled Scam Initiative.

What the data shows

Prosecutors have identified 174 American victims. The figure of more than $36.9 million refers to funds that passed from U.S. accounts controlled by participants into the Bahamas account. Eight co-conspirators have pleaded guilty so far. ShengSheng He, described by the department as a former co-owner of Axis Digital Limited, was sentenced in September 2025 to 51 months after pleading guilty in April to conspiracy to operate an unlicensed money transmitting business. Jingliang Su received 46 months on Jan. 27 after pleading guilty in June 2025 to a similar conspiracy charge; U.S. District Judge R. Gary Klausner imposed that sentence. Both men were ordered to pay $26,867,242.44 in restitution, and Su had been in federal custody since December 2024. A third participant, Jose Somarriba, was sentenced to 36 months. Nisha Chandran and Alexander Gorin are among the prosecutors handling the case.

Background

An earlier Justice Department sentencing announcement named Axis Digital Limited as the holder of the Bahamas account and identified Sihanoukville, Cambodia, among the locations where scam-center leaders received funds. The reports describe a familiar pattern of so-called romance and investment fraud, in which prolonged contact precedes a request to deposit money on a platform the victim cannot independently verify. The Zhao prosecution is one of several recent U.S. actions against the infrastructure behind such schemes. Bitcoin.com News also noted that Cambodian authorities extradited Prince Group head Chen Zhi to China in January in a separate investigation, and that Japanese police arrested an alleged Prince Group associate, Hu Shi, in Osaka in June.

What is still unclear

The two announcements differ on procedure. Crypto.news reported that Zhao appeared in federal court after his extradition and was scheduled for arraignment on Nov. 30, while Bitcoin.com News described him as having been arraigned in the Central District of California on Oct. 23. Neither release gives the date of his arrest or explains how authorities located him in the Netherlands. No trial date has been set, and the allegations against Zhao remain unproven.

What to watch

Other operations this month targeted the tools rather than the people behind alleged fraud. On Oct. 14, Brooklyn prosecutors said the district attorney's Virtual Currency Unit and the FBI had shut down 241 websites and seized 112 servers linked to an alleged Eastern European operation aimed at Russian-speaking Americans, recovering about $300,000, with no arrests. Coinbase said its investigators joined an Oct. 6-9 event in London with the Justice Department's Scam Center Strike Force and the UK's National Crime Agency targeting West African scam networks. In September, the strike force and the Treasury Department moved against Xinbi Guarantee, a Chinese-language marketplace allegedly linking operators with vendors of fraudulent sites and laundering services, restraining about $52 million in crypto in a single day and bringing its cumulative total to roughly $938 million.

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