US sanctions PH-based firm over $200-M virtual currency scam

LOS ANGELES, California — The United States has imposed sanctions on a Philippine-based company that provides critical computer infrastructure for alleged scams involving virtual currency.

In separate advisories dated May 29, the United States' Department of State, Department of the Treasury, and Federal Bureau of Investigation (FBI) flagged the activities of Funnull Technology Inc.

Also sanctioned was its administrator, Chinese citizen Liu Lizhi, according to the State and Treasury Departments.

"Fraudulent virtual currency investment scams cause serious financial harm to the American people. Today's targets are directly connected to over $200 million in losses reported by U.S. victims, with an average cost of over $150,000 per individual," the US State Department said in its advisory.

It added that the US will continue to hold accountable those who use virtual currencies and online services to commit fraud, as well as cybercriminals who exploit the United States' financial system.

Meanwhile, the Department of the Treasury's Office of Foreign Assets Control (OFAC) said Funnull's alleged acts of providing infrastructure to numerous websites involved in virtual currency investment scams is commonly referred to as "pig butchering."

"Funnull has directly facilitated several of these schemes, resulting in over $200 million in U.S. victim-reported losses," the OFAC advisory read. Majority of virtual currency investment scam websites reported to the FBI, the OFAC said, are linked to Funnul.

Citing a 2023 alert by the Treasury's Financial Crimes Enforcement Network (FinCEN), OFAC said pig butchering scams are largely perpetrated by criminal organizations based in Southeast Asia. These groups exploit victims of labor trafficking to reach out to unsuspecting individuals worldwide.

Scammers use fictitious identities, the OFAD said, under the pretense of potential romantic or business relationships, and elaborate storylines to deceive victims.

They then steal the victims' assets by convincing them to invest in virtual currency through fake websites designed to look like legitimate investment platforms, which falsely show significant returns. Once a victim is unable or unwilling to invest more, the scammer abruptly cuts off communication—taking the entire investment with them.

US Deputy Secretary of the Treasury Michael Faulkender said the action taken against Funnull underscores the government's "focus on disrupting criminal enterprises," which enable cyber scams and deprive Americans of their savings.

"The United States is strongly committed to ensuring the continued growth of a legitimate, safe, and secure digital asset ecosystem, including the use of virtual currencies and similar technologies," he added.

The OFAC online statement provided a link to a cybersecurity advisory by the FBI, which indicates technical details about Funnull's operations.

GMA News Online has requested comment from Funnull through the email address and Telegram contact number listed in its company website. GMA News Online has also emailed the official addresses indicated in Funnull's corporate document with the Philippines' Securities and Exchange Commission.

Responses to these requests for comment have yet to be received as of posting time.

Under US sanctions, all property and interests in property of the designated or blocked persons described above that are located in the United States, or in the possession or control of US persons, are blocked and must be reported to OFAC. Additionally, any entities owned—directly or indirectly—individually or in the aggregate, 50% or more by one or more blocked persons are also blocked.

Unless authorized by a general or specific license issued by OFAC, or otherwise exempt, OFAC regulations generally prohibit all transactions by US persons or within (or transiting) the United States that involve any property or interests in property of blocked persons. — with a report from Ted Cordero/ VDV, GMA Integrated News