Feburary 11, 2026

In a striking development that underscores the escalating risks in the digital asset space, the U.S. Department of Justice has secured a significant victory against international cryptocurrency fraud. On February 9, 2026, Daren Li, a 42-year-old dual national of China and St. Kitts and Nevis, was sentenced in absentia to 20 years in prison for his role in a massive conspiracy that defrauded victims of over $73 million through elaborate cryptocurrency investment schemes. This case, prosecuted in the Central District of California, highlights the sophisticated tactics employed by transnational criminal networks and serves as a stark reminder for investors navigating the volatile world of digital assets.

Li pleaded guilty in November 2024 to conspiring to launder funds obtained from these scams, admitting to directing co-conspirators in opening U.S. bank accounts under shell companies to receive and convert victim funds into virtual currency. The operation, originating from scam centers in Cambodia, targeted American victims through unsolicited social media interactions, phone calls, text messages, and even online dating platforms.

Perpetrators built trust by fostering phony professional or romantic relationships via encrypted apps, then steered victims toward spoofed websites mimicking legitimate cryptocurrency trading platforms. In some variations, scammers posed as tech support representatives, convincing individuals to wire funds or transfer cryptocurrency to resolve fabricated computer issues. This methodical approach, often referred to as pig butchering in industry parlance, gradually lured victims into investing larger sums under the promise of high returns, only to vanish once the funds were secured.

The scale of the fraud is staggering, with at least $73.6 million deposited into accounts linked to Li and his associates, including $59.8 million funneled through U.S. shell entities. Li’s sentence, the statutory maximum for money laundering conspiracy, also includes three years of supervised release.

However, Li remains a fugitive after removing his electronic monitoring device and fleeing in December 2025. He is the first among the defendants directly involved in handling victim funds to be sentenced, while eight co-conspirators have already pleaded guilty. This prosecution forms part of broader efforts by the Justice Department’s Criminal Division to dismantle global scam operations, involving collaborations with agencies like the U.S. Secret Service, Homeland Security Investigations, and international partners such as the Dominican National Police.

This case is emblematic of the vulnerabilities inherent in the cryptocurrency ecosystem. The integration of advanced technology with age-old confidence tricks allows criminals to operate across borders with relative impunity, exploiting the pseudonymous nature of blockchain transactions to obscure fund trails. Money laundering through virtual currencies, as executed here, not only conceals the illicit origins of funds but also complicates recovery efforts for victims. Federal authorities have made strides in addressing these challenges. Yet, the persistence of such schemes demands heightened vigilance from both regulators and market participants.

This sentencing echoes themes explored in prior discussions on our site, such as the mechanics of pig butchering schemes, where we detailed how fraudsters cultivate long-term deceptions to extract investments. Similarly, our analysis of cross-border pig butchering connects these tactics to networks linking China and U.S. victims, providing deeper insights into the geopolitical dimensions of these crimes. For those interested in international enforcement actions, our coverage of INTERPOL’s Operation HAECHI IV illustrates collaborative efforts against cyber-enabled scams, including voice phishing and romance frauds that mirror elements of Li’s operation.

Investors can draw critical lessons from this debacle to safeguard their assets. First, verify the legitimacy of any investment platform by checking for regulatory registrations with bodies like the SEC or the Commodity Futures Trading Commission. Be wary of unsolicited contacts promising guaranteed returns, a hallmark of fraudulent schemes. Utilize tools such as blockchain explorers to trace transaction histories and avoid platforms that pressure for immediate fund transfers.

In cases of suspected fraud, promptly report to the Internet Crime Complaint Center at ic3.gov, as early intervention can aid in asset recovery. Our firm’s whistleblower programs resource offers guidance on how individuals can report violations to agencies like the SEC or CFTC, potentially qualifying for rewards while contributing to market integrity.

As cryptocurrencies have gained mainstream adoption, lawmakers must balance innovation with protection against exploitation. Recent actions by the CFTC, such as those discussed in our article on CFTC Ends 2 Crypto Advisories, signal a maturing regulatory framework that adapts to market developments. On our companion site, gdowd.law, we have examined related enforcement trends, including the United Nations report on cryptocurrency’s role in money laundering, which highlights the intersection of digital assets with organized crime.

In conclusion, Daren Li’s sentencing marks a pivotal step in holding perpetrators accountable, but it also illuminates the ongoing battle against sophisticated fraud in the digital economy. By staying informed and exercising caution, investors can mitigate risks in this dynamic field. For personalized legal advice on cryptocurrency matters or fraud recovery, consider scheduling a consultation through our contact page. As the landscape evolves, proactive measures will be key to fostering a secure environment for digital asset participation.

The Department of Justice’s statement can be found here.

The post “Daren Li Sentenced to 20 Years in $73M Crypto Scam” first appeared on DigitalAsset.Law on February 11, 2026.