A 44-year-old Chinese national has been brought to the United States from the Netherlands to answer federal charges tied to a cryptocurrency investment scheme that drained nearly $37 million from 174 American victims.
Zhen Zhao was arraigned in California after his extradition, prosecutors said, following a federal indictment handed down in August 2025 charging him with conspiracy to commit money laundering. If convicted, he faces up to 20 years in federal prison.
Zhao is accused of running what investigators call a "pig butchering" operation, a type of confidence scam that has become one of the fastest-growing financial crimes in the world. The name reflects how the fraud works: operators spend weeks or months cultivating trust with their targets before stealing everything from them at once.
How the scheme worked
According to court documents, Zhao and his co-conspirators reached victims through unsolicited text messages, social media platforms, phone calls, and online dating services. The initial contact was typically low-stakes, a misdirected text, a friendly exchange that seemed accidental, or a casual introduction through a dating app. Over time, the operators steered conversations toward investment opportunities, eventually directing victims to what appeared to be functioning cryptocurrency trading platforms.
The platforms were fabricated. Built to resemble real exchanges, they showed account balances growing steadily over time, giving victims every reason to keep putting money in. When victims eventually tried to withdraw their funds, they were blocked, hit with invented fees, or simply cut off. Their money was already gone.
The ring funneled more than $36.9 million from U.S. bank accounts into an account at Deltec Bank in the Bahamas, registered under the name Axis Digital Limited. From there, the bank was directed to convert the deposited money into Tether, a dollar-pegged stablecoin widely used in fraud for its stability and ease of transfer. That Tether was then moved to a digital asset wallet controlled in Cambodia, where it was passed up to the leaders of scam centers operating in the region.
Cambodia has become a significant hub for this type of operation. Criminal syndicates there have turned large-scale cryptocurrency fraud into core business, often staffing compound facilities with trafficked workers from across Asia who are forced to run these schemes under threat of violence. The money chain in the Zhao case reflects that geography directly.
Eight accomplices, two already sentenced
Zhao was not running the operation alone. Eight co-conspirators have already pleaded guilty in connection with the same scheme. Two have been sentenced so far, one to 51 months and another to 46 months in federal prison. The remaining cases are moving through the courts.
The extradition itself was the result of months of legal coordination between U.S. prosecutors, the State Department, and Dutch authorities. The Netherlands, which maintains a functioning extradition treaty with the United States, processed Zhao's transfer back to face trial in California.
A problem that keeps growing
This case sits inside a much larger crisis. The FBI's 2025 Internet Crime Report recorded more than $8.6 billion in losses from investment scams over the course of a single year, up from $6.5 billion the year before. Those figures came from roughly 73,000 complaints, and investigators routinely note that reported numbers reflect only a portion of real losses, since many victims never file a report out of embarrassment or because they do not know where to turn.
Pig butchering has become the dominant form of cryptocurrency fraud in the United States. The FBI ran a proactive victim notification program that reached more than 4,300 pig butchering victims in a single year, warning people before they lost everything. Despite those efforts, the dollar figures keep climbing.
The Department of Justice has treated these cases as a priority. In December 2023, federal prosecutors in California charged four people with laundering more than $80 million connected to similar cryptocurrency investment scams, using shell companies and hundreds of individual banking transactions to move stolen money internationally. Prosecutors at the time described the mechanics as nearly identical to what Zhao and his network allegedly ran.
What victims should do
Anyone who believes they were targeted by a pig butchering scam can file a report with the FBI's Internet Crime Complaint Center at IC3.gov. Investigators ask that victims preserve all records of communications, platform names, cryptocurrency wallet addresses, transaction IDs, and any banking information they shared during the fraud.
For Zhao, the arraignment in California is the start of what will likely be a long legal process. With eight alleged co-conspirators already pleading guilty, prosecutors appear to have a functioning case built around his network. Whether he opts for trial or takes a similar path remains to
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Chinese National Extradited to Face Charges in $36.9 Million Cryptocurrency Fraud