On January 28, the U.S. Department of Justice announced that a 45-year-old Chinese national, Jingliang Su, was sentenced to nearly four years in federal prison for his role in laundering close to USD 37 million in proceeds derived from crypto-related fraud. The court also ordered him to pay more than USD 26 million in restitution to victims. The judgment was based on his involvement in a transnational fraud and money laundering scheme that had been confirmed through investigation, with relevant facts disclosed in judicial filings.
Fraud Methods and Sources of Funds
According to prosecutors, the transnational criminal network contacted victims in the United States via text messages, phone calls, and online dating platforms,诱cing them to participate in purported crypto investment opportunities. During the scheme, victims were directed to counterfeit trading websites and instructed to deposit funds. The case confirmed a total of 174 U.S. victims, whose losses were classified as fraud proceeds and subsequently entered the laundering process.
Fund Flows and Laundering Pathways
Public disclosures indicate that, at an early stage, the illicit funds were dispersed and transferred through shell company accounts within the United States and multiple crypto wallets. The funds were then routed through the international banking system to Deltec Bank in the Bahamas. Prosecutors revealed that approximately USD 36.9 million was converted into USDT during this phase and subsequently transferred onward by accomplices based in Cambodia. This process involved layered interactions between on-chain and off-chain financial structures.
Cross-Jurisdictional Law Enforcement Cooperation
The case exhibits clear cross-jurisdictional characteristics, involving the United States, the Bahamas, and regions in Southeast Asia. Funds moved across different financial systems and blockchain networks, increasing the complexity of investigation and evidence collection. Judicial authorities reconstructed the overall fund flows through integrated analysis of bank records, on-chain addresses, and communication patterns.
Risk Characteristics from a Compliance Perspective
From a compliance research standpoint, the case highlights a common pattern in which fraud proceeds, once entering the crypto asset ecosystem, are laundered through a combination of stablecoins and cross-border banking channels. The coexistence of traceable on-chain addresses and relatively opaque off-chain account structures means that effective risk identification depends heavily on multi-dimensional data integration rather than reliance on a single technology or channel.
Implications for On-Chain Risk Identification and Compliance Monitoring
The judgment demonstrates that while fraudulent activity often originates off-chain, its laundering phase frequently relies on blockchain networks. For the industry, systematically correlating judicial disclosures, on-chain transaction characteristics, and cross-border fund movements is an important direction for enhancing risk identification and compliance monitoring capabilities. Such practical experience also provides real-world reference cases for industry research, including work conducted by Trustformer KYT.