Chinese Crypto Launderer Faces Sentencing in $73 Million Scam Scheme

Jimmy Aki
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Daren Li, a 41-year-old dual Chinese citizen, has pleaded guilty to his involvement in a large-scale crypto laundering operation tied to a $73 million fraud scheme. Li admitted to a single count of conspiracy to commit money laundering, a charge that carries a potential 20-year prison sentence.

Crypto Laundering Scheme Uncovered

According to the plea agreement submitted in a California federal court on November 11, Li’s operation funneled millions obtained through fraudulent cryptocurrency scams.

These scams reportedly included “pig butchering” from August 2021 to April 2024.

Li’s involvement in this crypto laundering scheme extended to organizing a network of U.S.-based shell companies. He instructed accomplices to open bank accounts for these entities, deliberately obscuring the source and destination of the illicit funds.

The setup allowed Li and his co-conspirators to launder substantial amounts, ultimately converting much of the stolen funds into Tether (USDT) stablecoin. From there, the assets were transferred to crypto wallets controlled by members of the laundering ring.

The U.S. Department of Justice (DoJ) highlighted Li’s laundering network’s complex and extensive nature.

Nicole M. Argentieri, Head of the DOJ’s Criminal Division, remarked on the scope of Li’s crimes, stating that he operated outside of the U.S., utilizing “a web of shell companies and international bank accounts” to move and obscure funds.

According to case records, this arrangement reportedly included $73.6 million transferred directly to accounts within the network and an additional $59.8 million laundered through various U.S.-based shell companies.

Li was arrested in April 2024 at Atlanta Airport, Georgia, while attempting to travel. His alleged accomplice, Yicheng Zhang, was detained in Los Angeles a month later.

As part of the legal proceedings, Li’s sentencing has been scheduled for March 3, 2025, before Judge R. Gary Klausner.

Beyond prison time, Li faces potential penalties that include a $500,000 fine or a fine amounting to twice the total proceeds from the offense. There’s also the possibility that Li may be ordered to make full restitution payments to scam victims.

Crypto Laundering Schemes on the Rise

The Department of Justice, alongside other U.S. and international agencies, has been ramping up efforts to tackle crypto laundering cases like Li’s.

In addition to the major hacks and scams in October, other incidents further increased crypto losses.

Recall that a hacker stole about $20 million from a U.S. government-linked wallet, although roughly 88% of the funds have been recovered, according to Arkham Intelligence.

Meanwhile, Maximiliano Pilipis, the operator of AurumXchange, has been charged by the U.S. Department of Justice for crypto laundering and tax evasion.

The DOJ claims that his exchange processed over $30 million in transactions, including funds linked to the notorious Silk Road marketplace.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.