US Sanctions Philippine Tech Firm Over $200M Crypto Scam Network

US authorities have sanctioned Funnull Technology Inc., a Philippine-based firm, and its administrator, Liu Lizhi, for allegedly providing critical infrastructure to "pig butchering" cryptocurrency scams. These elaborate schemes have reportedly defrauded US victims of over $200 million. The sanctions aim to dismantle the networks enabling such cybercrimes.

Treasury Department

Funnull Technology Sanctioned for Enabling Crypto Scams

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) has imposed sanctions on Funnull Technology Inc., a company based in the Philippines, and its administrator, Chinese national Liu Lizhi. The firm is accused of supplying technical infrastructure for hundreds of thousands of websites involved in "pig butchering" cryptocurrency scams, which have led to over $200 million in losses for U.S. victims.

• Funnull allegedly purchased IP addresses in bulk from major cloud service providers and resold them to cybercriminals operating fraudulent investment platforms.

• The company is also accused of using domain generation algorithms to mass-produce web addresses and providing design templates to help scammers impersonate legitimate financial services.

• In 2024, Funnull reportedly tampered with a code repository, redirecting traffic from legitimate sites to scam and gambling platforms, some linked to Chinese money laundering operations.

• Liu Lizhi allegedly managed Funnull's operations, including overseeing staff who assigned domains to scammers and maintained the infrastructure supporting fraud, phishing, and illicit gambling.

Funnull offers bulk IP addresses to scammers looking to operate scam websites: Chainalysis

The Modus Operandi of "Pig Butchering" Scams

"Pig butchering" scams are sophisticated social engineering schemes that originated in China. Scammers build trust with victims, often through social media or dating apps, posing as romantic or financial partners. They then persuade victims to invest in fake cryptocurrency platforms, which display falsified returns.

• Victims are lured into making initial small investments that appear to yield profits, encouraging them to invest larger sums.

• Once a victim refuses to invest more, the scammer cuts off communication, and the entire investment vanishes.

• These scams frequently utilize fake investment apps and websites designed to appear credible.

• Generative AI tools are increasingly being employed to enhance the outreach and sophistication of these scams.

Broader Implications and Ongoing Efforts

The sanctions against Funnull Technology Inc. are part of a broader effort by U.S. authorities to disrupt cybercrime networks. The FBI is releasing a cybersecurity advisory to assist private-sector partners in identifying and taking down sites linked to Funnull's infrastructure. Blockchain analysis has also revealed that Funnull's crypto wallets had exposure to Huione Pay, identified as a significant money laundering platform.

• Two crypto wallet addresses linked to Funnull, based on Ethereum and TRON networks, have been added to the Treasury's Specially Designated Nationals list.

• These wallet addresses allegedly received payments for web services used in the scams.

• The "Triad Nexus," a network of over 200,000 domains associated with investment scams and fake trading apps, is reportedly connected to Funnull.

• Authorities warn that the reported losses likely underestimate the true scale of the damage, as many victims do not report these crimes.

Sources

• BREAKING: US Sanctions Philippine Tech Firm for Role in Crypto Scam Network, BitPinas.

• US government sanctions Philippines firm over massive crypto scam infrastructure, Crypto News.

• Tech in Asia - Connecting Asia's startup ecosystem, Tech in Asia.

• US Sanctions Funnull Tech for $200M Crypto Scam, Cryptonews.

• US sanctions Philippines tech firm accused of aiding crypto scams, Cointelegraph.

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