The U.S. Department of Treasury has sanctioned Dunnull Technology Inc., a Philippines-based digital infrastructure provider, for enabling a major online fraud network that carried out crypto investment scams known as “Pig Butchering”. News came out on May 29, 2025; the sanctions highlight growing efforts from the U.S. to fight cyber financial crimes linked to global digital infrastructure.
What Are Pig-Butchering Scams?
“Pig-butchering” involves building fake relationships with victims, often through social media or dating apps. These scams are done by emotionally and psychologically getting attached to an individual before then tricking them into investing in fraudulent crypto platforms. These schemes generated billions in losses, with U.S. individuals reportedly losing $429 million in 2024 alone. Check out U.S. Treasury Targets Burmese Militia Linked to ‘Pig Butchering’ Crypto Schemes for more examples of this scam being done. A significant amount of these losses have been traced back to the infrastructure operated or supported by Funnull technology.
How Funnull Allegedly Enabled the Scams
According to the U.S. Treasury and cybersecurity experts at Bitdefender, Funnull allegedly supported the scam network by
- Purchasing huge blocks of IP addresses to host malicious infrastructure
- Providing backend technical support to help scammers deploy fake crypto investment websites
- Using domain generation algorithms to register tens of thousands of fraudulent domains
- Embedding deceptive code into web development tools to redirect users to scam and gambling platforms
- Selling server access and management tools to criminal operators
The U.S. has been able to identify more than 332,000 scam-related domains linked to infrastructure hosted or run by Funnull. Experts say that these operations could allow these criminals to avoid detection, rotate fraud sites quickly, and continue to trick victims across many different platforms.
Who Was Named and What the Sanctions Mean
The U.S. sanctions specifically went after Liu Lizhi, a 40-year-old Chinese national reportedly based in Shanghai. Liu is accused of overseeing domain infrastructure and managing the staff that ran the technology. Detailed records of fraudulent activity were allegedly maintained under his supervision. As a result, both Liu and Funnull’s assets in the U.S. have been frozen, and American citizens can no longer conduct transactions with them. The sanctions in use were enacted under executive orders 13694 and 14144, which are tools that let the U.S. government block individuals and organizations involved in cybercrimes threatening national security or financial stability. This action, which took place as a result of months of investigations, uncovered a major amount of records linked to domains acting like trusted crypto platforms such as Coinbase, showing how big and technical this fraud turned out to be.
Global & Industry Implications
This latest enforcement action comes amid a broader international crackdown on crypto-related cybercrime. The U.S. Treasury stated that these sanctions are part of a “sustained campaign” to target digital infrastructure that has been taken over by scam networks.
The spotlight now focuses on the Philippines’ growing tech industry, which has rapidly adopted blockchain but now faces global scrutiny. Security experts are starting to worry that these developments could damage trust in Southeast Asia’s growing digital economy.
This aligns with ongoing discussions in the UK, where the FCA is actively seeking public and industry views on crypto regulation, making the global call for oversight in the blockchain space more needed.
What Happens Now?
This case highlights how infrastructure providers can enable large-scale fraud, stressing the need for vigilance behind the scenes, not just on crypto platforms. Developers and users must start to strengthen verification practices, mainly around tools like IP and code repositories. This ties into our coverage of the SEC’s latest guidance, which calls for stricter compliance and cybersecurity standards. As regulations start to ramp up, the Funnull case may become a model for future enforcement in the decentralized space.
Source
This article is based on:
US sanctions Philippines digital infrastructure provider linked to virtual currency scams
US Treasury Sanctions Filipino Firm for Supporting Massive Crypto Scam Network
Further Reading
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- US crypto groups urge SEC for clarity on staking
- U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer (openai)
- Crypto Coalition Tells SEC Staking Is ‘Essential Good,’ Not a Security
Nicholas Newman is a 19-year-old based in Westchester, NY. He began his college journey at Iona University in New Rochelle and is now a student at Fordham University’s Gabelli School of Business in the Bronx NY, majoring in Accounting and Finance. Nicholas has been actively involved in the crypto space since 2020, both on the investment side and in development, and continues to explore opportunities at the intersection of finance, technology, and digital assets.
