US Charges Man in $37 Million USDT Money Laundering Scheme

The U.S. Department of Justice has extradited Zheng Zhao, who is accused of being part of an international money laundering network. The 44-year-old faces charges for moving approximately $36.9 million stolen from 174 American victims. He remains in custody following a court appearance in Los Angeles.

The scheme used social media contacts and dating platforms to lure investors with promises of fake returns. After the transfers were made, the money was sent to shell accounts in the United States. The funds were then routed to a specific account at Deltec Bank, located in the Bahamas.

Investigators state that the capital was converted into USDT, Tether's stablecoin, before being sent to digital wallets in Cambodia. This process allowed the criminals to remove the funds from the traditional banking system to distribute them among the leaders of fraud centers. Tether and the bank have not been accused of knowing participation in the crime.

The case highlights the complexity of operations that blend global financial institutions with the digital asset ecosystem. Eight other individuals involved in the scheme have already pleaded guilty in U.S. court. Zhao could face up to 20 years in prison if convicted on charges of conspiracy to commit money laundering.