U.S. Sentences Mastermind Behind $73M Crypto Scam to 20 Years in Prison

A U.S. federal court sentenced Daren Li, a dual national of China and St. Kitts and Nevis, to 20 years in prison for his role in a $73 million cryptocurrency investment scam. Li, who is currently a fugitive, was also ordered to serve three years of supervised release after pleading guilty to conspiring with others to launder funds from the scam.

The scam, known as a "pig butchering" scheme, involved Li and his co-conspirators cultivating relationships with victims through social media and dating apps before tricking them into investing in spoofed crypto platforms. Victims lost significant sums, with $59.8 million coming from U.S. shell companies used to launder the funds.

U.S. authorities have stated they are working with international partners to locate and return Li to the United States for his full sentence. Assistant Attorney General A. Tysen Duva highlighted the seriousness of the crime, noting the devastating impact on victims.

Why Did This Happen?

Pig butchering schemes have become a major concern for crypto users, with social engineering frauds accounting for the majority of losses in 2026. Li and his group operated from Cambodia, a country that has become a hub for such scams.

According to a report by TRM Labs, Cambodia has seen over $96 billion in crypto funds flow to local companies since 2021, much of it used for fraud and money laundering. The U.S. Justice Department emphasized that Li's case illustrates the risks associated with these fraudulent practices.

How Did Markets React?

The sentencing coincides with a broader uptick in crypto scams in early 2026. In January alone, scammers stole $370 million from victims, the highest monthly total in 11 months. Phishing scams accounted for $311 million of that amount, including a particularly damaging incident where a single victim lost $284 million.

The increase in fraud has led to tighter compliance measures in jurisdictions like India, where the Union Budget 2026 introduced stricter reporting and penalty rules for crypto transactions. From April 2026, entities failing to submit required disclosures will face daily fines of ₹200, while incorrect reporting could lead to a flat ₹50,000 penalty.