US Sanctions Filipino Tech Company for Aiding $200M in Crypto Scams

In a crackdown targeting the infrastructure behind so-called “pig butchering”, the U.S. Treasury has sanctioned a Philippine-based tech company and its administrator for aiding the cryptocurrency scams that defrauded Americans of more than $200 million.

Lawmakers on Thursday accused Funnull Technology Inc. of facilitating several of these schemes by providing cybercriminals with infrastructure to host fraudulent websites.

The Treasury Department also said Liu Lizhi, a Chinese national and administrator of Funnull Technology, kept records that tracked the performance and tasks of Funnull employees, including the assignment of domain names used in cryptocurrency fraud and phishing schemes.

“Today’s action underscores our focus on disrupting the criminal enterprises, like Funnull, that enable these cyber scams and deprive Americans of their hard-earned savings,” Deputy Secretary of the Treasury Michael Faulkender said in a statement.

The scams did not stop at defrauding consumers. Cybercriminals allegedly also used Funnull’s technology to target legitimate websites by injecting malicious code that redirected unsuspecting users to fraudulent websites.

The company reportedly bought IP addresses from global cloud providers and resold them to scammers who would then start investment fraud, phishing, and online gambling websites.

“Funnull is linked to the majority of virtual currency investment scam websites reported to the FBI,” the Treasury Department said. “U.S.-based victims of these scam websites have reported over $200 million in losses, with average losses of over $150,000 per individual.”

Treasury officials said the amount of losses is likely higher, but noted that many victims of scams do not report the crime.

Pig-butchering scams—named for the practice of fattening a pig before slaughter—typically begin on social media or dating apps, where scammers build trust with a target over time before striking. The scammers then coax the victim into either sending digital assets to a scammer’s account or connecting their cryptocurrency wallets to fake crypto platforms where the scammers drain their funds.

The sanctions freeze all U.S.-based assets belonging to Funnull Technology Inc. and Liu Lizhi. They also prohibit individuals and businesses based in the U.S. from doing any business with entities that Funnull or Lizhzi own 50 percent or more stake.

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

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

In October, OFAC sanctioned the Russia-based cybercrime syndicate Evil Corp, accusing the organization of orchestrating financial thefts and ransomware attacks. In March, OFAC sanctioned Behrouz Parsarad, who operated the dark web platform Nemesis.

According to OFAC, Parsarad took a cut of each transaction on the platform, which was used to facilitate the sale of millions of dollars' worth of narcotics. In April, the Treasury Department sanctioned Tron Wallets linked to Iran-backed Houthi rebels.

Edited by James Rubin