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Learn how the billion-dollar crypto scam industry is striving
In October 2022, Chinese industrialist Wang Yicheng presented a big bouquet wrapped in red paper with a bow to one of Bangkok's most senior cybercrime detectives, congratulating him on his recent promotion.
Wang, the vice president of a local Chinese trade association, promised the new cybercrime investigator "smooth work and new achievements," according to the group's website, which has photos from the occasion.
According to the trade group's online postings, Wang has developed contacts with members of Thailand's law enforcement and political elite during the last two years. Reuters discovered that a cryptocurrency account named in Wang's name was receiving millions of dollars during that period, which was tied to a sort of bitcoin investment fraud known as pig slaughtering.
According to registration paperwork and transaction records examined by Reuters, bitcoin worth more than $90 million poured into the account between January 2021 and November 2022. At least $9.1 million of that originated from a crypto wallet related to pig-butchering frauds, according to TRM Labs, a blockchain analysis business based in the United States. Two additional prominent crypto-tracking businesses confirmed that the account received payments associated with such schemes.
A 71-year-old California man was the victim of one of the frauds. According to blockchain research firm Coinfirm, he moved money to crypto wallets, which channelled more than $100,000 into Wang's account. According to the man's relatives, he lost around $2.7 million, his life savings, after falling victim to someone posing as a beautiful young woman named Emma.
The previously unreported transactions offer a unique glimpse into the economics of pig-butchering schemes, which entail engaging unwary people online. Scammers build confidence and then encourage victims to participate in fraudulent cryptocurrency schemes, sometimes using bogus websites that appear to be real trading platforms. Targets are sometimes given actual returns to fool them into thinking the plan is legitimate.
Over the last year, such frauds have garnered increased investigation from worldwide law enforcement, but little is known about the people behind them.
Wang, who, according to account registration paperwork, is 41 years old, did not answer specific inquiries for this piece. Neither did the Thai government, Thai police, or the Thai-Asian Economic Exchange Trade Association, which Wang represented in Bangkok.
Some features of the pig slaughtering procedure are yet unknown. Wang's crypto account, according to Lisa Wolk, a blockchain intelligence analyst at TRM, "is a node in a money laundering network and not necessarily the ultimate recipient of funds." Reuters was unable to discover whether anybody else benefitted from the account or opened it using Wang's name.
According to Erin West, a California prosecutor specialising in cybercrime who attended the briefing, agents from the US Federal Bureau of Investigation and the US Secret Service attended in January. A 72-page presentation created for the guests, which Reuters obtained, offers specifics on Southeast Asian cyber frauds and names Wang as one of the claimed victims. The presentation illustrates money pouring into a crypto wallet identified as Wang's, mentions his work at the Thai-Asian organisation, and contains a photo of his identity card as well as additional images of him.
The FBI and Secret Service both declined to comment on the briefing or if Wang was the subject of any inquiry. The briefing was presented by the Global Anti-Scam Organisation, a non-profit organisation in the United States that advocates for fraud victims and investigates crimes.
According to three blockchain research firms, Wang's crypto account was stored at Binance, the world's largest crypto exchange. When asked about the account, Binance spokesperson Jessica Jung declined to comment on specific individuals or the findings of Reuters. The organisation claimed in an August statement on its website that the amount of reports of pig-butchering scams it had received this year was double that of 2022, which it ascribed to an influx of naïve crypto investors and scammers attempting to abuse them.
Crypto fraud has become a multibillion-dollar criminal expertise, trapping victims all over the world. According to the FBI, victims in the United States alone reported losses of $2.6 billion from pig butchering and other crypto fraud last year, more than double the previous year. Because victims are sometimes too humiliated to disclose crimes to authorities, the real extent of the losses is unclear.
The US Department of Justice announced in April that it had confiscated around $112 million in cryptocurrency tied to pig-butchering frauds, without naming any suspects. A warrant that led to the confiscation of more than half of that sum mentioned a Binance account in Thailand.