U.S. Sanctions Philippines Firm Funnull Over $200 Million Crypto Scam

The U.S. Treasury Department has imposed sanctions on a Philippines-based technology firm, Funnull, and its alleged administrator, accusing them of providing services to thousands of crypto scam websites. The firm is linked to most crypto scam websites reported to the FBI, with victims’ losses surpassing $200 million. Funnull purchases IP addresses in bulk from cloud service providers and sells them to scammers, allowing them to host and operate clones of legitimate investment platforms to deceive victims and steal their crypto.

In one instance in 2024, Funnull purchased a repository of code used by web developers and altered the code to redirect visitors of legitimate websites to scam websites and online gambling sites. The Treasury’s Office of Foreign Assets Control (OFAC) stated that these services not only make it easier for cybercriminals to impersonate trusted brands when creating scam websites but also allow them to quickly change to different domain names and IP addresses when legitimate providers attempt to take the websites down.

The accused administrator of Funnull, Liu Lizhi, a Chinese national who managed the firm’s employees, was also added to OFAC’s Specially Designated Nationals and Blocked Persons (SDN) list as part of the sanctions. Being on the SDN list means any assets the individual has in the U.S. are frozen, and it’s illegal for people in the U.S. to conduct any financial transactions or have business dealings with them; violators can face civil and criminal penalties.

OFAC also sanctioned two wallet addresses associated with Funnull, which blockchain analytics firm Chainalysis said in a report were likely “used to receive payment from cyber criminals.” The addresses show indirect exposure to various types of scams and domain management infrastructure vendors. Chainalysis claimed Funnell is a central player in a network known as the Triad Nexus, which includes over 200,000 unique hostnames associated with investment scams and fake trading apps.

As a result of the sanctions, everyone in the U.S. is now forbidden from interacting with all property and business interests where Lizhi and Funnull have a more than 50% stake, with violators possibly facing civil or criminal penalties. The sanctions against Funnull are part of a broader effort by the U.S. government to crack down on financial crimes and protect its citizens from fraudulent activities. Funnull's role in these scams underscores the need for increased vigilance and regulation in the cryptocurrency sector, where the anonymity and decentralized nature of digital currencies can make it easier for criminals to operate.

The U.S. Treasury's action sends a clear message that it will not tolerate the use of technology to facilitate illegal activities, and that those involved in such schemes will face severe consequences. The sanctions against Funnull are a significant step in the right direction, and serve as a warning to other firms that may be involved in similar activities. The sanctions come as part of a broader effort by the U.S. government to crack down on financial crimes and protect its citizens from fraudulent activities.