The US Treasury Department took action against Funnull Technology Inc., a Philippines-based tech firm accused of enabling online crypto investment scams that defrauded American victims of over $200 million. The firm, along with its Chinese national administrator Liu Lizhi, were designated by the Office of Foreign Assets Control (OFAC) for their roles in facilitating these scams.
Deputy Treasury Secretary Michael Faulkender highlighted the focus on disrupting criminal enterprises like Funnull that enable cyber scams and harm Americans’ financial security. Funnull was reportedly linked to the majority of virtual currency scam websites reported to the FBI, with victims losing an average of $150,000 each.
The firm operated by providing infrastructure services to scammers, including IP address leasing, domain generation, and web hosting. They also offered tools like domain generation algorithms and pre-built website templates to make fraudulent operations appear legitimate.
Liu Lizhi was responsible for overseeing operations and maintaining detailed documentation of Funnull’s personnel. The firm’s technology allowed scammers to create sophisticated websites that deceive victims into investing in fake platforms.
These scams, known as “pig butchering,” involve using fake identities and emotional manipulation to defraud victims of their savings. The scammers disappear once the victim stops investing, leaving them with significant losses.
The Treasury’s designation was issued under Executive Order 13694 to target foreign cyber activities that threaten US national security. All of Funnull’s property within US jurisdiction is now blocked, and Americans are prohibited from engaging in transactions with them.
The FBI also issued a cybersecurity advisory to raise awareness of Funnull’s operations and encourage the public to report suspected scam activity. The sanctions aim to penalize offenders and demonstrate the US commitment to a secure digital asset ecosystem.
While the sanctions are a significant step, the goal is not just punishment but to incentivize behavioral change. Entities violating these sanctions may face civil or criminal penalties, and compliance could lead to removal from the Specially Designated Nationals list.
Overall, the action signifies the US government’s determination to combat cyber-enabled financial fraud and hold digital crime enablers accountable. The crackdown on scams like pig butchering demonstrates a commitment to protecting Americans from fraudulent schemes in the digital space.