The U.S. Treasury has sanctioned Funnull Technology Inc. and its administrator, Liu Lizhi, for enabling over $200 million in "pig butchering" crypto scams.
Funnull aided these scams by reselling bulk IP addresses to host scam sites.
Liu Lizhi, a Chinese national and Funnull's administrator, is regarded as the mastermind of this scam ring.
Two crypto wallets linked to Funnull have been sanctioned, and the firm is reportedly connected to the larger "Triad Nexus" scam network.
This action is part of a bigger U.S. government crackdown on cybercrime.
The U.S. government is cracking down hard on cybercrime, this time with its sights set on a Philippine-based technology company.
On 30 May, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against Funnull Technology Inc. and its administrator, Liu Lizhi.
Funnill and Lizhi were allegedly masterminds in enabling bad actors to carry out crypto-based scams known as pig butchering.
According to OFAC, these scams have already cost Americans over $200 million, and the real number could be even higher.
This kind of scam is named after the practice of fattening a pig before slaughter. They are elaborate schemes where fraudsters build emotional relationships with their targets before financially ruining them.
Victims are often approached on dating apps or social media by scammers pretending to be friends or romantic interests.
Once a relationship is formed, the scammer introduces the victim to the idea of investing in crypto via a seemingly legitimate platform.
These platforms, however, are completely controlled by the scammers.
Once the victim connects their wallets, their wallets get drained, and have hundreds of thousands of dollars stolen sometimes in a single scam.
According to OFAC, Funnull Technology was one of the major sources of support to scammers and helped these cybercriminals source for the tools they used to deceive and defraud victims.
Funnull reportedly purchased bulk IP addresses from reputable cloud providers and resold them to fraudsters.
These IPs were used to host fake investment platforms, phishing sites, and online gambling portals that mimicked the look and feel of real services.
More disturbingly, Funnull is accused of manipulating open-source code repositories used by web developers.
According to the Treasury Department, this tampered code would redirect users from legitimate platforms to scam sites, all without the developer or user realizing it. This made it nearly impossible for everyday users to tell the difference between a safe website and a scam one.
The OFAC also alleges that Liu Lizhi, a Chinese National was the mastermind of the scam enterprise.
As the administrator of Funnull, Liu was in charge of managing internal company operations.
Investigators say he kept detailed logs of employee tasks, including domain name setups and actively managed the scam infrastructure.
As a result of OFAC’s actions, both Liu and Funnull have been placed on the Specially Designated Nationals and Blocked Persons (SDN) list.
This means that all assets they hold within U.S. jurisdiction are now frozen, and U.S. individuals/businesses are prohibited from doing business with them
Along with the company and its administrator, OFAC also sanctioned two crypto wallets tied to Funnull.
These wallets, according to Chainalysis, were used to receive payments from other cybercriminals for the scam tools that Funnull provided.
Service tiers offered by Funnull | Source: Chainalysis
The investigation also connected Funnull to a bigger scam network, known as the Triad Nexus.
This group was responsible for over 200,000 unique scam hostnames, most of which impersonated real crypto trading services.
The FBI had already received reports on many of these fake platforms prior to OFAC’s intervention.
Chainalysis described Funnull’s operations as a “high-value target” due to the sheer scale of its operations.
This isn’t OFAC’s first move against cybercriminals, and it likely won’t be the last.
Earlier this year, the U.S. Treasury sanctioned Evil Corp, a Russia-based cybercrime syndicate responsible for ransomware and financial theft.
It also went after Behrouz Parsarad, the operator of the dark-web marketplace for drugs called Nemesis.
Finally, the OFAC also sanctioned several Tron-based crypto wallets linked to Iran-backed Houthi rebels using blockchain to bypass sanctions.
Michael Faulkender, Deputy Secretary of the Treasury, pointed out the importance of targeting enablers, not just the scammers.
Overall, the Treasury Department confirmed that U.S. victims of scams tied to Funnull-linked websites had reported losses of more than $200 million, with an average individual loss of $150,000.
Still, officials warn that the actual damage could be far worse.
Many victims never come forward, either because they don’t realize they’ve been scammed or because they’re too embarrassed to report the crime.
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