Last week, the Department of Justice filed the largest ever forfeiture action against $15 billion in bitcoin currently in US custody. A DoJ press release revealed that an indictment was unsealed in federal court that charged Cambodian national Chen Zhi, founder and chairman of Prince Holding Group, with wire fraud conspiracy and money laundering conspiracy.
“Individuals held against their will in the compounds engaged in cryptocurrency investment fraud schemes, known as ‘pig butchering’ scams, that stole billions of dollars from victims in the United States and around the world. The defendant is at large,” the release said.
Attorney General Pamela Bondi and Deputy Attorney General Todd Blanche said: “Today’s action represents one of the most significant strikes ever against the global scourge of human trafficking and cyber-enabled financial fraud.
“By dismantling a criminal empire built on forced labor and deception, we are sending a clear message that the United States will use every tool at its disposal to defend victims, recover stolen assets, and bring to justice those who exploit the vulnerable for profit.” Here’s an overview of the news and what it means for the fintech industry.
What is a pig butchering scam?
As alleged in the indictment and forfeiture complaint, Chen Zhi’s Prince Group was focused on real estate development, financial services, and consumer services, and it grew into one of Asia’s largest transnational criminal organisations. It made enormous profits, operated scams across Cambodia and perpetrated fraudulent cryptocurrency investment schemes.
Prince Group’s schemes, that involved investment fraud and money laundering, were assisted by local networks in the US. These elaborate fraud schemes, also known as pig butchering, are when scammers build trust with victims through social media or dating apps and then convince them to invest in fake cryptocurrency platforms.
The term "pig butchering" comes from fattening up the victim, or the pig, before butchering, or stealing their funds. The scale of these scams has surged globally, and the financial services and fintech industries have shown concern around the anonymity and irreversibility of crypto transactions.
Implications for fintech and crypto platforms
As Javelin Research revealed, while pig butchering scams are the latest scheme, “no one is exempt from victimisation. This complex long con – a mix between a romance scam and an investment scam – relies upon gaining trust to manipulate the victim into “investing” hard-earned money. Pig butchering scams often leave victims emotionally and financially drained and left out to slaughter by criminals.”
This seizure sends a strong message to fintech and cryptocurrency firms. Beyond strengthening compliance, know your customer (KYC) and anti-money laundering (AML) protocols. There is also a growing market for AI-driven tools that can analyse user behaviour and transaction patterns in real-time to detect anomalies that are indicative of fraud.
Some fintech firms can also leverage advanced monitoring to detect changes in user behaviour that may signal they are being influenced by a scammer. Further, for those that are crypto focused, blockchain intelligence tools can be used to identify suspicious transaction patterns such as funds being moved to known high-risk or illicit wallets.
Alongside this, as the threat of pig butchering increases, all organisations must add extra layers of security to prevent unauthorised access to a user’s account and halt fraudulent transactions. Fintech companies can implement transaction threshold limits and enforce additional verification steps for high-risk or unusually large crypto transfers.
The Financial Crimes Enforcement Network (FinCEN) encourages filing Suspicious Activity Reports (SARs) with specific keywords like pig butchering to assist law enforcement. When a suspicious transaction is identified, companies should issue specific, tailored fraud warnings to alert customers to the risk. For instance, a warning could remind the user to verify the identity of the person they are sending money to.
The $15 billion bitcoin seizure is a watershed moment for crypto enforcement and a wake-up call for the fintech industry. As regulators tighten oversight and criminals evolve their tactics, fintechs must lead with innovation, responsibility, and resilience to maintain trust in the digital financial ecosystem.