US seizes 127,271 bitcoins, Chen Zhi faces forced-labor fraud charges

On Tuesday, U.S. prosecutors announced the seizure of 127,271 bitcoins, valued at roughly $14 billion to $15 billion, and unsealed criminal charges against Chen Zhi, the founder and chairman of Cambodia’s Prince Holding Group, accusing him and unnamed associates of running an international cryptocurrency fraud network that used forced labor to carry out scams from compounds in Southeast Asia. The civil forfeiture complaint filed in the Eastern District of New York and the accompanying indictment charge Chen with conspiracy to commit wire fraud and conspiracy to launder money.

Prosecutors say the network ran large-scale "pig butchering" schemes that lured victims into online relationships or bogus investment opportunities and then persuaded them to transfer cryptocurrency. According to court filings, proceeds were converted to bitcoin, routed through exchanges and consolidated in a set of unhosted cold wallets controlled by associates, before being moved again. U.S. officials described the forfeiture as the largest cryptocurrency asset seizure in department history.

The indictment alleges Prince Group operated at least 10 compounds in Cambodia where hundreds of trafficked migrant...