FBI Arrests Three Men in Alleged $10 Million Crypto Laundering Scheme.

The FBI Arrests Trio men in connection with an alleged crypto money laundering scheme worth over $10 million. The suspects, Zhong Shi Gao, Naifeng Xu, and Fei Jiang, face a maximum of 30 years in federal prison if found guilty. The United States Attorney for the Southern District of New York announced the charges.

The operation was a joint effort between the FBI’s Oklahoma City field office and the bureau’s Asian and African Organized Crime squad. The defendants are accused of engaging in bank and wire fraud, money laundering, and identity theft. U.S. District Judge Colleen McMahon will oversee the trial.

According to the Department of Justice, the scheme involved recruiting individuals from China and Taiwan living in the United States. These individuals would open bank accounts, which would then be handed over to the defendants. The scammers would initiate transactions and later claim they were unauthorized, leading the banks to credit their accounts. The funds would then be withdrawn as cash or used to purchase cryptocurrency, quickly transferred to foreign exchanges.

FBI Assistant Director James Smith warned others against attempting bank fraud, stating that the FBI would hold them accountable in the criminal justice system. U.S. Attorney Damian Williams emphasized that fraudsters using cryptocurrency to hide their identities would be found and brought to justice.

This latest arrest comes after increased regulatory scrutiny on the cryptocurrency industry. Last year, the collapse of FTX and the arrest of its founder, Sam Bankman-Fried, prompted federal regulators to take a stricter stance. In September, a group of U.S. Senators, led by Elizabeth Warren, supported the Digital Asset Anti-Money Laundering Act, which aims to apply traditional banking regulations to crypto companies.

The crackdown on crypto-related crimes has intensified in recent months. Williams, overseeing this case, was also involved in prosecuting members of the notorious OneCoin scam. Additionally, the founders of SafeMoon were recently indicted on charges of conspiracy, fraud, and money laundering.