US arrests two Chinese nationals in $73 million crypto scam

FILE PHOTO: U.S. Justice Department logo is seen at Justice Department headquarters in Washington

(Reuters) - U.S. authorities charged two Chinese nationals in a cryptocurrency scam that laundered at least $73 million from defrauded victims, the Justice Department said on Friday.

U.S. officials arrested Yicheng Zhang in Los Angeles on Thursday, according to an indictment unsealed in U.S. District Court in California's central district later that day. Daren Li, a dual citizen of China and St. Kitts and Nevis, was arrested at the Atlanta airport in April.

The U.S. accused the two of being involved in a type of cryptocurrency investment scam known as pig butchering, which has become a global billion-dollar industry.

The defendants are alleged to have instructed co-conspirators to open U.S. bank accounts in the name of shell companies.

Victims were induced online into depositing money into these accounts - funds that were then laundered through U.S. financial institutions to bank accounts in the Bahamas.

"While fraud in the crypto markets takes on many forms and hides in many far-off places, its perpetrators aren't beyond the law's reach," U.S. Deputy Attorney General Lisa Monaco said in a statement.

Li and Zhang are both charged with conspiracy to commit money laundering and six counts of international money laundering. If convicted, the defendants face a maximum of 20 years in prison on each count, the Justice Department said.

(Reporting by Brendan O'Boyle; Editing by Nick Macfie)