Vs Punished Philippine Tech Company For Supporting $200M Crypto Scam

In a recent move aimed at clamping down on the infrastructure behind so-called “pig butchering” scams, the U.S. Treasury Department has sanctioned a Philippines-based technology company alleged to be involved in cryptocurrency scams that have stolen more than $200 million from U.S. citizens.

Lawmakers accused Funnull Technology Inc. of facilitating various scam schemes by providing cybercriminals with access to infrastructure for hosting fraudulent websites.

The Treasury also reported that Liu Lizhi, a Chinese national and administrator of Funnull Technology, kept documents that recorded the performance and duties of Funnull employees. This included the assignment of domain names that were used in cryptocurrency fraud and phishing schemes.

Michael Faulkender, the deputy secretary of the Treasury Department, said this action underscores the administration's commitment to disrupting criminal enterprises like Funnull that facilitate these cyber scams and rob Americans of their hard-earned savings.

The scams went beyond simply defrauding consumers. Cybercriminals allegedly used Funnull's technology to attack legitimate websites by injecting malicious code, leading unsuspecting users to fraudulent sites.

The company is said to have purchased IP addresses from global cloud providers and then resold them to scammers, who used them for investment fraud, phishing and online gambling websites.

The Treasury Department said Funnull is connected to the majority of the virtual currency scam websites reported to the FBI. U.S. victims of these scam websites have reported losses of more than $200 million, with average losses of more than $150.000 per individual.

Treasury officials said actual losses are likely higher because many scam victims do not report the crime.

Pig butchering scams, named after the process of fattening a pig for slaughter, typically begin on social media or dating apps, where scammers spend time building trust before approaching their victims. Victims are then encouraged to either transfer digital assets to the scammer’s account or connect their cryptocurrency wallets to fake crypto platforms, where the scammers can skim their funds.

The sanctions freeze all U.S. assets of Funnull Technology Inc. and Liu Lizhi. They also prohibit individuals and companies in the U.S. from doing business with entities in which Funnull or Liu have a 50 percent or greater stake.

The Treasury and OFAC did not immediately respond to requests for comment.

The sanctions against Funnull are the latest in a series of actions by the Treasury Department’s Office of Foreign Assets Control targeting the infrastructure behind financial cybercrime.

In October, OFAC sanctioned Russian cybercrime syndicate Evil Corp, which it accused of orchestrating financial thefts and ransomware attacks. In March, it sanctioned Behrouz Parsarad, who operated the dark web platform Nemesis.

According to OFAC, Parsarad received a percentage of every transaction on the platform, which was used to sell millions of dollars worth of narcotics. In April, the Tron Wallets linked to Iran-backed Houthi rebels sanctioned.

Frequently Asked Questions

What is a 'pig butchering' scam?
Pig butchering scams are fraudulent schemes in which scammers first build trust with victims, often through social media or dating apps, and then convince them to transfer money or digital assets to them.

How much damage have victims suffered from the Funnull scam?
Victims are estimated to have lost more than $200 million, with an average dungeon of more than $150.000 per individual.

What are the implications of the sanctions against Funnull Technology?
The sanctions freeze all U.S. assets of Funnull Technology Inc. and Liu Lizhi, and ban U.S. companies and individuals from doing business with related entities.