Details of the Crypto Laundering Operation

The man, Jingliang Su, a Chinese national, was sentenced by U.S. District Judge R. Gary Klausner. Su is also ordered to pay over $26 million in restitution, according to the U.S. Attorney’s Office for the Central District of California. Prosecutors revealed that Su was part of an international crime network that manipulated victims in the U.S. into transferring funds to accounts controlled by the schemers.

The illicit funds were laundered through U.S. shell companies, digital asset wallets, and global bank accounts. Co-conspirators targeted individuals through texts, calls, and online dating platforms, promoting counterfeit crypto investments using fake websites resembling legitimate trading platforms.

How the Scam Unfolded

Victims were misled into believing their investments were growing, while in reality, their money was being siphoned. More than $36.9 million was channeled to a bank account at Deltec Bank in the Bahamas and subsequently converted to Tether (USDT).

Prosecutors stated, “From there, co-conspirators in Cambodia transferred the USDT to leaders of scam centers across the region.” The government identified 174 victims in the U.S. alone.

Legal Proceedings and Outcomes

In June, Su pleaded guilty to conspiracy to operate an illegal transmitting business. Eight individuals have pleaded guilty in connection to the scam, including Shengsheng He, who received a sentence of over four years in prison.

First Assistant United States Attorney Bill Essayli commented, “New investment opportunities may sound promising, but they attract criminals who, in this case, laundered tens of millions of dollars.” This case serves as a stark reminder of the risks associated with digital-asset investments.

The Block, an independent media outlet, reports on such cases to deliver timely and impactful news about the crypto industry.

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After pleading guilty to operating an unlicensed money transferring business, Legkodymov’s legal representation officially requested a presidential pardon from Trump. Legkodymov was indicted in January 2023, admitted his guilt in December, and was sentenced to time served in July 2024 after spending approximately 18 months in custody.

Ivan Melnikov, the Vice President of the Russian branch of the International Committee for Human Rights, suggested that Legkodymov was a scapegoat in a political campaign against the crypto market and skilled Russian programmers. He added that the plea for pardon is based on the optimism that the US might adopt a more balanced and equitable approach towards digital finance.

As per the indictment, Legkodymov was involved in an operation that enabled the transmission of illegal funds via his role at Bitzlato. US authorities claim that hundreds of millions of dollars were transferred from Bitzlato to the dark web’s Hydra Marketplace, with the exchange receiving approximately $15 million linked to ransomware attacks.

Reportedly, French authorities are seeking to extradite Legkodymov to face similar charges after his US sentence. It remains uncertain if Trump has received the pardon request or if he intends to act on it. As of the time of reporting, Cointelegraph had not received a response from the White House.

Since assuming presidency in January, Trump has granted at least 58 presidential pardons. Among those pardoned were Ross Ulbricht, the founder of Silk Road, who was serving two life sentences in federal prison, and four ex-executives of the cryptocurrency exchange BitMEX: Arthur Hayes, Benjamin Delo, Gregory Dwyer, and Samuel Reed.

Changpeng “CZ” Zhao, the former CEO of Binance, revealed in May that he had sought a pardon from Trump. Zhao admitted to one felony charge in November 2023 as part of an agreement with US authorities and Binance, leading to a four-month prison term. There are reports that former FTX CEO Sam Bankman-Fried is also seeking a federal pardon from Trump by making appearances on conservative news channels and distancing himself from the Democratic Party. In 2024, Bankman-Fried was sentenced to 25 years in prison and is currently housed at the Federal Correctional Institution in Terminal Island.

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ZachXBT, a blockchain investigator, shared his observations on X last Thursday, noting that the potential for misuse in the crypto world has always been significant. However, the situation has “markedly escalated since politicians introduced memecoins and multiple court cases were dismissed, further encouraging such misconduct.”

He stated that for defrauding their followers, crypto influencers and key thought leaders face “absolutely no consequences.” ZachXBT continued, “In the current favorable environment, it has never been a worse time to engage in black hat, phishing, social engineering, and robbery activities as compared to gray hat activities.”

Slow regulatory advances are also part of the problem. The lack of enforcement on projects that fail to disclose paid advertisements and similar behavior has also fed into the supercycle, says ZachXBT.

He argued that if regulators had focused on managing this sector instead of pursuing open-source developers or blue-chip decentralized protocols, the current situation wouldn’t be so prevalent. The lack of repercussions has allowed these practices to flourish.

According to a report shared with Cointelegraph by cybersecurity firm Hacken, over $2 billion was lost to crypto hacks in the first quarter of 2025. Phishing scams accounted for $96 million of this, while rug pulls were responsible for more than $300 million.

Taylor Monahan, another blockchain detective, joined the conversation, stating that as long as scammers are making significant profits, their behavior is unlikely to change. She believes that the crypto industry is in a “difficult place” as it continues to attract and retain too many hackers and scammers.

She noted, “There are no social, financial, or legal obstacles or friction to this kind of behavior. Plus, it’s simply so easy and there’s so much instant money to be made.”

While some scammers are facing legal consequences, many continue to operate freely. The US Department of Justice recently announced the seizure of more than $225 million linked to crypto investment scams by the Secret Service. Moreover, a New Zealand man was arrested in May for his alleged involvement in a global crypto fraud operation that reportedly stole 450 million New Zealand dollars ($265 million).

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As per the latest report by the state-owned media house France 24 on Wednesday, several individuals suspected of participating in this heinous act have been apprehended, as shared by an insider close to the case. The number of arrests in crypto-related kidnappings has seen a significant rise in 2025, with a considerable proportion of these incidents happening in France.

This alarming trend has prompted cryptocurrency business owners to elevate their security protocols. Furthermore, it led to a crucial meeting spearheaded by the French Interior Minister Bruno Retailleau to discuss potential countermeasures.

The specifics regarding the number of arrests made on Tuesday remain uncertain as of France24’s source. Suspected individuals can be detained for up to 96 hours without any formal charges.

The victim, a father of an undisclosed cryptocurrency entrepreneur, was held hostage for several days at an undisclosed location. The kidnappers demanded a ransom of up to 7 million euros ($8 million). A police intervention on May 3 facilitated the man’s release, resulting in the arrest of five individuals.

In a related development, a man believed to be instrumental in the recent series of crypto-related kidnappings in France was detained in Morocco on June 4. Moreover, on May 26, French authorities apprehended over 12 individuals associated with high-profile crypto kidnapping cases in Paris.

There have been at least 29 physical crypto attacks this year alone, as per a list compiled by Jameson Lopp, co-founder of self-custodial firm Casa. The numbers are on track to outdo the 35 attacks in 2024 and 24 in 2023. However, the real count could be much higher due to underreporting arising from the fear of revictimization and a wide spectrum of assailants, from organized crime rings to friends and family, as per a study by the University of Cambridge.

At the 2025 Consensus crypto conference, Chainalysis CEO Jonathan Levin shared his thoughts on the rising crypto crimes, attributing it to the mistaken belief among criminals that cryptocurrency transactions are untraceable. Kraken’s Chief Security Officer Nick Percoco pointed out the glaring lack of security consciousness among crypto users as another contributing factor.

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John Woeltz, 37, and William Duplessie, 33, pleaded not guilty on Wednesday to charges related to a three-week kidnapping in Manhattan’s wealthy SoHo district. Prosecutors claim the men tortured their victim with electric shocks and physically threatened him to extract his bitcoin password. Both men have been held since their arrest last month and face potential life sentences if found guilty.

According to the Manhattan District Attorney’s office, the accused duo seized the man’s electronic devices and password on May 6, then demanded his cryptocurrency password. The victim’s refusal led to a series of brutal assaults spanning three weeks in an upscale townhouse until he found an opportunity to escape.

Court documents reveal that Woeltz and Duplessie bound the victim’s wrists, struck his head with a firearm, and threatened his family’s lives. Justice Gregory Carro has ordered the defendants to remain behind bars without bail until their next hearing, slated for July 15.

Local media outlets have labeled Woeltz as a cryptocurrency investor. The alleged victim, an Italian man, also reportedly had connections to a New York-based crypto hedge fund, according to the New York Times, which cited an internal police report described by a law enforcement official.

The case adds to a growing list of crypto-related kidnappings, with three such incidents reported in France this year alone. The booming prices of bitcoin and other digital currencies in recent years have spawned a class of wealthy investors who may become attractive targets for criminals, security experts warn.

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The broker reportedly accepted a social invitation for drinks at the kidnapper’s apartment in the nearby town of Estepona. Upon arrival, he was ambushed and threatened with torture and death unless he transferred $30,917 (30,000 euros) from his clients’ accounts.

With quick thinking, the broker feigned a call to a customer, instead reaching out to a friend in London. This led to a series of calls, eventually alerting the local police. The authorities were successful in tracing the location of the apartment.

As reported by Metro UK, the broker seized the opportunity to escape when the kidnappers were distracted by the police. He jumped from the balcony, breaking his ankles in the process.

Spanish authorities stated on Feb 8, that upon their arrival, they observed the victim attempting to climb down the balcony, eventually falling. He was immediately rushed for medical treatment. A subsequent search of the apartment led to the discovery of two firearms, 10,000 euros ($10,305), a money counter, three knives, and 25 grams of pink cocaine.

The three British kidnappers were arrested and charged with a plethora of crimes, including kidnapping, grievous bodily harm, being part of a criminal organization, illegal possession of weapons, and drug trafficking. They were remanded to prison post their court appearance.

There has been a surge in in-person cryptocurrency robberies in recent years. Casa co-founder and cypherpunk, Jameson Lopp, maintains a list on GitHub tracking dozens of offline crypto robberies worldwide, dating back to 2014. So far this year, there have been nine incidents of in-person crypto-related robbery, according to Lopp’s list.

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