A Chinese national accused of helping launder nearly $37 million stolen from American cryptocurrency scam victims has been extradited to the United States, where he faces a federal money-laundering charge.
Zheng Zhao, 44, appeared in a Los Angeles federal court on October 23 after being extradited from the Netherlands. Dutch authorities had detained him in connection with an international fraud network allegedly operating through scam centers in Cambodia. A judge ordered Zhao held pending further proceedings.
According to CryptoSlate, the US Department of Justice alleges that Zhao helped move funds taken from 174 identified American victims through shell companies, overseas bank accounts and cryptocurrency wallets. He was charged with conspiracy to commit money laundering in August 2025. If convicted, he could face up to 20 years in federal prison.
How the alleged money trail worked
The alleged fraud began when victims were contacted through social-media platforms, dating services, phone calls and text messages. The operators promoted fake cryptocurrency investment opportunities using websites designed to look like genuine trading platforms. Those sites displayed invented gains, which prosecutors say encouraged victims to send more money.
Investigators traced more than $36.9 million from US bank accounts controlled by members of the alleged network to one account at Deltec Bank in the Bahamas. The account was held by Axis Digital Limited, a company identified by the Justice Department in a June 2025 announcement.
Prosecutors allege that Zhao and others arranged for the funds to be converted into Tether’s USDT stablecoin through the Bahamas bank. The resulting digital assets were then sent to a cryptocurrency wallet controlled by people in Cambodia and later distributed to leaders of scam centers in the region.
A stablecoin is a digital token designed to maintain a relatively stable value against a reference asset, typically the US dollar. In this case, prosecutors say the conversion gave the alleged network a way to move the proceeds internationally through cryptocurrency wallets after the funds had passed through conventional banking channels.
The allegations concern the actions of the criminal network. Prosecutors have not accused Tether or Deltec Bank of knowingly taking part in the fraud.
Wider prosecution has produced eight guilty pleas
Zhao’s case is part of a broader US prosecution that has already resulted in guilty pleas from eight other participants in the alleged laundering operation.
The Justice Department said Jose Somarriba and ShengSheng He established Axis Digital and opened the Deltec Bank account. Jingliang Su later joined the company as a director and allegedly took part in converting funds from victims into cryptocurrency.
The investigation also identified a US-based group that prosecutors say helped receive and move the money. Joseph Wong allegedly managed Los Angeles-based money launderers who created shell companies and bank accounts. Yicheng Zhang allegedly operated two accounts used in the scheme.
Some defendants have already been sentenced. He received a 51-month prison term, while Su was sentenced to 46 months after pleading guilty to conspiracy to operate an unlicensed money-transmitting business.
A federal court ordered Su in January to pay about $26.9 million in restitution to victims. Restitution establishes a legal financial obligation, but authorities have not disclosed how much money has actually been recovered or distributed. That leaves the ultimate financial recovery for victims uncertain.
Zhao’s next hearing and the current market picture
The Justice Department is pursuing the case through its Cyber-Enabled Scam Initiative, which coordinates investigations into international fraud, digital-asset laundering and the financial systems supporting overseas scam centers.
Zhao is scheduled to return to federal court in Los Angeles for arraignment on November 30. He remains presumed innocent, and prosecutors have not yet established his personal responsibility for the transactions attributed to the wider network.
Moneyiar market data at 22:39 on October 25, 2026, showed Ethereum at $2,342.0570017305, up 0.02% over 24 hours but down 1.77% over seven days. At 22:38, Tether USDt was priced at $0.9987425383, with no 24-hour change and a 0.01% seven-day decline.
The same Moneyiar data showed Nexus at $0.0000006151, up 1.61% in 24 hours and down 13.97% over seven days. Comedian was at $0.0575169485, down 4.44% over 24 hours but up 7.23% over seven days.
