The United States seized another 127.271 BTC in an international operation targeting crypto fraud. The case could redefine state use of digital assets.
The US Department of Justice announced this week the seizure of 127.271 bitcoins, valued at more than $15.000 billion, in a joint operation with the US Treasury and British authorities.
This is one of the largest seizures of digital assets in history, and the epicenter of the case is Chen Zhi, a Chinese businessman based in Cambodia, accused of leading an international network of cryptocurrency scams, money laundering, and labor exploitation.
Create your account and protect your Bitcoin nowPrince Group and the modus operandi of pig slaughter
The authorities' investigation, which lasted several years, managed to link the conglomerate Prince Group —led by Chen— with massive fraud campaigns known as “pig slaughter,” a scheme that combines emotional manipulation with financial scams and forced labor.
According to the Department of Justice, Chen faces charges of conspiracy to commit wire fraud and international money laundering, with a maximum sentence of 40 years in prisonHis name has now been added to the Office of Foreign Assets Control (OFAC) sanctions list, and the business group has been designated a Transnational Criminal Organization.
The operation also reached the Huione Group, a Phnom Penh-based financial conglomerate accused of facilitating the movement of more than $4.000 billion between 2021 and 2025, including funds linked to cryptocurrency fraud and North Korean hacking. The Financial Crimes Enforcement Network (FinCEN) imposed sanctions under Section 311, cutting Huione off from the U.S. banking system.
What will the United States do with the seized bitcoins?
The magnitude of this new seizure has reignited the debate over the fate of digital assets confiscated by the state. The US government has reportedly begun legal proceedings to take ownership of the BTC through criminal forfeiture. If this request is successful, the funds will officially be transferred to the Treasury, which oversees the country's crypto holdings.
Access Bitcoin safely and securely here.Senator Cynthia Lummis, one of the main drivers of institutional Bitcoin adoption in Congress, proposed that the seized BTC be integrated into the Bitcoin Strategic Reserve promoted by President Donald Trump. It should not be forgotten that in March, Trump signed an executive order establishing such a reserve, and in July the Treasury presented an assessment of federal holdings, although without disclosing figures. According to Arkham Intelligence, the United States already holds approximately $22.000 billion in Bitcoin, distributed in wallets controlled by federal agencies. The new seizure would significantly increase that total.
Lummis welcomed the Justice Department's action as an opportunity to transform the proceeds of crime into national value. “Turning the proceeds of crime into assets that bolster the U.S. Bitcoin Strategic Reserve demonstrates how smart policy can generate lasting value.”, he wrote on his X account.
However, other experts warn that the legal process could drag on for years. Scott Johnsson, a lawyer specializing in finance and venture capital, noted that a portion of the BTC could be used to compensate victims, although the government will likely retain the majority.
Cryptocurrencies help dismantle criminal networks despite state inaction
The operation in question marks a coordinated effort between Washington and London to simultaneously sanction individuals, front companies, and digital assets linked to criminal networks. The United Kingdom froze Chen Zhi's real estate and assets. for hundreds of millions of pounds, in what represents the first joint action of its kind against a cryptocurrency fraud network.
However, the situation in Cambodia complicates the judicial process. Chen Zhi remains a fugitive in that country, and the Cambodian government has stated that there are no ongoing internal investigations. Phnom Penh has stated that it will only cooperate if solid evidence is presented, but has so far taken no restrictive measures against the businessman. Chen maintains close ties with the local political elite, has received official honors, and has participated in high-level government events, which reduces the likelihood of extradition.
But despite the obstacles, blockchain technology has proven to be an effective tool for tracking the flow of illicit funds. While cryptocurrencies offer a degree of privacy, the traceability of transactions on public networks like Bitcoin allows authorities to follow the money trail accuratelyTherefore, this case reinforces the argument that digital assets, far from being an opaque haven, can become strategic allies in combating financial crime.
Buy and manage bitcoins safely with Bit2MeA new chapter in state management of crypto assets
The seizure of over 127.000 BTC not only represents a significant blow against a criminal network, but also opens a debate on the role of the State in the management of digital assets. With a potential reserve exceeding 36.000 million, the United States is positioned as one of the largest institutional holders of Bitcoin in the world.
The decision about what to do with the confiscated funds—whether to use them to compensate victims or integrate them into the strategic reserve—will have political, economic, and regulatory implications. Meanwhile, the Chen Zhi case underscores the importance of international cooperation, rigorous enforcement of KYC/AML regulations, and the intelligent use of blockchain technology to strengthen financial transparency.
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