The US government plans to seize 127,271 Bitcoin worth about $14.2 billion, which investigators say was generated through a cross-border “pig slaughter” scam carried out by Chinese national Chen Zhi.
If completed, Bitcoin should be added to the US strategic Bitcoin Reserve, according to the terms of Trump’s Executive Order issued earlier this year. However, a lack of formalized policies during the government shutdown and a ticking clock to ratify the plan could disrupt the plan.
The Executive Order explicitly states:
“The Strategic Bitcoin Reserve will be capitalized with Treasury-owned bitcoin that has been forfeited as part of a criminal or civil asset forfeiture.”
The legal filing, filed on October 14, outlines a far-reaching criminal enterprise that mixed crypto investment fraud, human trafficking and political corruption.
Crypto fraud
According to the lawsuit, Zhi operated Prince Group, a central player in Cambodia’s underground digital economy.
The entity operated a network of racket complexes that doubled as detention centers for trafficked workers. Thousands of migrants, lured by fake job offers, were reportedly forced to run fraudulent crypto investment schemes under the threat of violence.
Under Chen’s leadership, at least ten major buildings were erected, including facilities related to the Jinbei Hotel and Casino, Golden Fortune Science and Technology Park, and Mango Park.
Court records show that Chen personally kept ledgers detailing each site’s activities, referring to the Chinese phrase “sha zhu” or “pig slaughter,” which is a term for long-term scams in which victims are emotionally manipulated before being defrauded.
The U.S. government alleges that Chen and senior executives used bribes and political influence to avoid prosecution, even receiving advance warning of planned law enforcement raids.
By exploiting these connections, the group maintained control over billions in illicit crypto flows and entrenched its position within Cambodia’s broader shadow economy.
Sanctions from Huione
In addition to seizing the illicit funds, US authorities, in coordination with the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO), also imposed sanctions on Zhen and its related entities.
According to the press statement, OFAC has imposed sanctions on 146 individuals and entities linked to the Prince Group Transnational Criminal Organization (TCO), a Cambodia-based syndicate led by Chen Zhi that allegedly committed hundreds of online investment frauds targeting Americans and citizens of allied countries.
FinCEN also invoked Section 311 of the USA PATRIOT Act to formally isolate Cambodia’s Huione Group from the US financial system, calling it a primary conduit for laundering proceeds from crypto fraud and related cybercrime.
U.S. officials said Huione’s networks played a major role in hiding billions in stolen money from investors around the world.