Stablecoins
Chinese National Extradited to California for $36.9 Million Crypto Scam
Federal prosecutors have extradited Zheng Zhao, 44, from the Netherlands to Los Angeles to face charges related to an international cryptocurrency investment scam. During his initial court appearance on October 23, 2026, Zhao was ordered detained, with arraignment scheduled for November 30, according to the U.S. Attorney’s Office for the Central District of California.
Prosecutors allege that Zhao was part of a scheme where co-conspirators contacted U.S. victims through unsolicited social media interactions, phone calls, text messages, and online dating platforms to gain their trust. They promoted fraudulent digital asset investments, directing victims to fake websites designed to resemble legitimate cryptocurrency trading platforms, where victims were persuaded to deposit funds.
The scammers falsely claimed that victims’ investments were increasing in value while secretly stealing their money. More than $36.9 million in victim funds was transferred from U.S. bank accounts controlled by the co-conspirators to a single account at Deltec Bank in the Bahamas. Zhao and his co-conspirators arranged for Deltec Bank to convert the funds into Tether (USDT), a stablecoin, and transfer the assets to a digital wallet controlled in Cambodia. Cambodian co-conspirators then distributed the USDT to the leaders of scam centers across the region.
Assistant Attorney General A. Tysen Duva emphasized the seriousness of the case, stating, “This extradition should be a lesson to all those who seek to exploit vulnerable Americans from overseas. We will pursue charged defendants anywhere in the world.” Zhao faces up to 20 years in prison if convicted, while eight co-conspirators have already pleaded guilty in the case.
New Developments
Prosecutors allege that the $36.9 million stolen from American victims was laundered through a bank in the Bahamas before being converted into Tether's USDT.
There are 174 identified victims in this case, but no new repayment figures have been announced.
FAQ
Who is Zheng Zhao and what are the charges against him?
Zheng Zhao is a 44-year-old individual who has been extradited from the Netherlands to Los Angeles to face charges related to an international cryptocurrency investment scam involving over $36.9 million in victim funds.
How did the scam operate?
The scam involved co-conspirators contacting U.S. victims through unsolicited social media, phone calls, text messages, and online dating platforms to gain their trust and promote fraudulent digital asset investments on fake websites that resembled legitimate cryptocurrency trading platforms.
What happened to the funds that victims deposited?
Victims' funds were transferred from U.S. bank accounts controlled by the co-conspirators to a single account at Deltec Bank in the Bahamas, where the funds were converted into Tether (USDT) and then transferred to a digital wallet controlled in Cambodia.
What are the potential consequences for Zheng Zhao if convicted?
If convicted, Zheng Zhao faces up to 20 years in prison for his involvement in the cryptocurrency scam.
Have any co-conspirators been prosecuted in this case?
Yes, eight co-conspirators have already pleaded guilty in connection with the case, highlighting the ongoing efforts to address this international scam.