WORLDTECHChinese national extradited to US over alleged $36.9 million crypto scam laundering
US authorities have brought Chinese national Zheng Zhao to the United States to answer allegations that he helped launder $36.9 million taken from cryptocurrency scam victims. Prosecutors allege the proceeds passed through a Bahamas bank and were turned into USDT, a dollar-pegged token issued by Tether.
Court appearance and charge
Zhao, 44, was brought before a federal court in Los Angeles on Oct. 23 after being sent to the United States from the Netherlands, where authorities had detained him in connection with an international fraud operation that prosecutors say ran from scam centers in Cambodia. The US Department of Justice said a judge ordered him held pending further proceedings.
He was charged in August 2025 with conspiracy to commit money laundering, an offence that carries up to 20 years in federal prison on conviction. Prosecutors allege he assisted a network in moving millions of dollars taken from 174 identified American victims through US shell companies, international bank accounts and cryptocurrency wallets.
How the funds allegedly moved
According to the allegations, the operators first reached victims through social media, dating platforms, phone calls and text messages. They promoted fraudulent crypto investments on websites styled after legitimate trading platforms, displaying invented gains to encourage further deposits.
Investigators followed more than $36.9 million from US bank accounts controlled by the participants to a single account at Deltec Bank in the Bahamas. Prosecutors allege that Zhao and others arranged for that bank to convert the money into USDT before the tokens were sent to a wallet controlled by individuals in Cambodia.
Distribution to scam center leaders
The digital assets were then allegedly passed on to leaders of scam centers across the region, giving the network a route for moving proceeds outside the conventional banking system. Prosecutors present the case as an example of how the operators combined access to traditional financial institutions with crypto transfers to move money across borders.
Case status and victim recovery
Eight guilty pleas have so far been secured in the prosecution. No new repayment figure for victims has been announced, and their financial recovery remains uncertain.
Open questions
- Will the case lead to repayment of the funds taken from the 174 identified victims?
- How will the charges against Zhao be resolved at trial or through a plea?