The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has taken decisive action against Funnull Technology, a company based in the Philippines, by imposing sanctions for its alleged involvement in cryptocurrency scams known as pig butchering. This decision, announced on Thursday, underscores the ongoing global battle against cybercrime and its increasingly sophisticated methods. Alongside Funnull, two cryptocurrency wallets purportedly connected to the Huione Group are also under scrutiny, marking a significant effort to clamp down on fraudulent financial activities.
The Sanctioned Players
Funnull Technology, known for providing technological support to websites involved in pig butchering scams, has been accused of facilitating schemes that have resulted in over $200 million in losses for victims. The company allegedly acquired IP addresses from mainstream cloud service providers, a move that appears to have been aimed at enabling cybercriminal activities. OFAC’s sanctions extend to Liu Lizhi, a Funnull administrator, highlighting the seriousness of the accusations.
In a blog post, blockchain security firm Elliptic identified a majority of the cryptocurrency investment scam websites reported to the FBI as being linked to Funnull. According to Elliptic, the sanctioned wallets—tied to Ethereum and Tron networks—have received funds directly from Huione Pay, a subsidiary of the Huione Group. With over $4 million traced to these wallets, the connection between Funnull and Huione appears undeniable.
Huione: A Money Laundering Concern
Earlier this month, the Financial Crimes Enforcement Network (FinCEN) labeled Huione as a “primary money laundering concern,” further intensifying the scrutiny on its operations. The recent sanctions are part of a broader strategy to dismantle the infrastructure supporting such illicit activities. Elliptic’s analysis provides a glimpse into the intricate web of transactions that these scams rely on, with Huione Pay playing a central role in the movement of funds.
“This development is a wake-up call for the crypto industry,” noted Sarah Johnson, a cryptocurrency analyst at Blockchain Solutions. “It highlights the need for robust security measures and regulatory frameworks to protect investors from sophisticated scams.” This sentiment echoes the concerns raised in our coverage of the SEC’s latest guidance on staking, which calls for clearer regulatory frameworks.
Digging Deeper into Pig Butchering Scams
Pig butchering scams, a new breed of online fraud, lure victims into fake investment schemes with promises of high returns. These scams typically involve prolonged interactions where fraudsters gain the trust of victims before convincing them to invest in non-existent ventures. The term “pig butchering” is derived from the methodical way scammers fatten up their victims’ trust before “slaughtering” them financially.
The crackdown on Funnull and its affiliates is a stark reminder of the evolving nature of cybercrime. As criminals devise new strategies to exploit technological advancements, the authorities are stepping up their efforts to stay one step ahead. The involvement of mainstream cloud service providers in Funnull’s operations raises questions about the role of these platforms in inadvertently supporting criminal activities.
Implications for the Crypto Market
The cryptocurrency market, already known for its volatility, may experience ripples from this enforcement action. While the sanctions are targeted, they serve as a cautionary tale for investors and regulators alike. “This could lead to tighter regulations and oversight in the crypto space,” suggested Michael Tan, a financial analyst with CryptoGuardians. “Investors should be vigilant and conduct thorough due diligence before engaging in any crypto-related activities.” This is particularly relevant given the recent findings that 1 in 4 crypto tokens launched since 2021 have failed, highlighting the inherent risks in the market.
As the dust settles, the focus shifts to the potential ripple effects on the broader crypto ecosystem. Will these sanctions deter future scams, or will they push fraudsters to find even more elusive methods? The answers will likely shape the trajectory of regulatory approaches in the coming months.
In the meantime, the crypto community watches with bated breath, aware that the landscape is shifting beneath their feet. The crackdown on Funnull and its affiliates is a crucial step in the ongoing battle against cybercrime, but it’s clear that this is just one battle in a much larger war.
Source
This article is based on: U.S. Sanctions Funnull for Role in Pig Butchering Scam, Huione-Linked Crypto Wallets
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
