US extradites alleged launderer in $36.9M crypto scam that routed funds into USDT via a Bahamas bank

25 Oct 2026

25 Oct 2026, 19:46 UTC+01:00

Regulation TradeReviewed News Desk

Extradited from the Netherlands to Los Angeles

US authorities have extradited Chinese national Zheng Zhao, 44, over his alleged role in laundering about $36.9 million taken from victims of crypto investment scams, CryptoSlate reports, citing the US Department of Justice. Zhao appeared in federal court in Los Angeles on October 23 after being transferred from the Netherlands, where he had been detained. A judge ordered him held pending further proceedings.

Zhao was charged with conspiracy to commit money laundering in August 2025 and faces up to 20 years in federal prison if convicted. His arraignment is scheduled for November 30 in Los Angeles. He remains presumed innocent.

How the money allegedly moved

According to prosecutors, the network targeted 174 identified American victims through social media, dating platforms, phone calls and text messages. Victims were steered to fake crypto investment websites built to look like real trading platforms, which displayed fabricated gains to encourage larger deposits.

Investigators traced more than $36.9 million from US bank accounts controlled by the conspirators to a single account at Deltec Bank in the Bahamas. Zhao and others allegedly arranged for that money to be converted into Tether’s USDT stablecoin and sent to a wallet controlled by people in Cambodia, from where it was distributed to leaders of scam centers in the region.

Prosecutors have not accused Tether or Deltec Bank of knowingly taking part in the fraud, the report notes.

Eight guilty pleas so far

The case builds on a prosecution that has already produced guilty pleas from eight other participants. In June 2025 the DOJ named Axis Digital Limited as the company behind the Bahamas bank account. Two defendants tied to that company have been sentenced to 51 and 46 months in prison, and a court ordered one of them to pay about $26.9 million in restitution in January. Authorities have not said how much money has actually been recovered for victims, and no new repayment figure was announced with the extradition.

What it means for traders

This is not a market-moving event, but it is a clear reminder of how pig-butchering style scams work: a fake platform, fake profits on screen, and pressure to deposit more. A few practical checks help:

• Only use exchanges you can verify independently, ideally licensed ones. Our exchange comparison lists platforms we have actually tested, with BingX and OKX at the top.
• Be suspicious of anyone you met online who pushes a specific trading site or app.
• If you cannot withdraw a small amount quickly, treat every displayed gain as fiction.

You can read how we evaluate platforms on our how we test page.

Not financial advice.

Related reviews

• Bingx review
• Okx review

Sources

• CryptoSlate: How $37 million stolen from Americans moved through a Bahamas bank into Tether’s USDT

News is for information only and is not financial advice. More crypto news