A California man was sentenced to 51 months in prison after being convicted for his role in laundering $36.9 million stolen in a crypto investment scam that operated from Cambodian scam centers, the U.S. Department of Justice said.
The Justice Department said the defendant, once a co-owner of Bahamas-based Axis Digital, helped move illicit proceeds through a Deltec Bank account in the Bahamas before converting the funds into tether (USDT) and sending them back to operators in Cambodia. Acting Assistant Attorney General Matthew G. Galeotti said the group “preyed on American investors” by promising outsized crypto returns.
Blockchain analytics firm Elliptic flagged further links to the notorious Telegram marketplace Huione. Elliptic co‑founder Tom Robinson told CoinDesk that “some of the victim funds in this case were laundered through Huione International Payments, which operated through Huione Guarantee.” Authorities shut down Huione in May after intelligence tied the platform to extensive illicit flows.
Huione has been estimated to have facilitated up to $98 billion in illicit crypto transactions since 2014, according to intelligence cited by investigators. Prosecutors say the Axis Digital account consolidated scam proceeds before on‑ramping to USDT and redistributing funds to the scam operation’s network.
So far, eight co‑conspirators have pleaded guilty, including Daren Li, a Chinese and St. Kitts and Nevis national who has been in U.S. custody since April 2024 on related money‑laundering charges.
Why it matters: The case highlights ongoing cross‑border money‑laundering risks tied to crypto, centralized bank correspondent channels and on‑chain mixers. For businesses and investors, it underscores the need for stronger AML/KYC controls and caution when dealing with unfamiliar payment conduits.
Source: U.S. Department of Justice. Read the original coverage for full details.